Wednesday, November 14, 2012

Now the Real Work Starts


This article originally appeared in The Truman Doctrine on 12 November 2012.

Everyone breathes a sigh of relief once Election Day is over in hopes
life can finally move on. Though the President has won re-election and
the Democrats retain control of the Senate, don’t expect this to
loosen up the gridlock in Washington. In fact, the political calculus
remains generally the same with the President facing a divided, often
obstructionist Congress. This is the reason we should all breathe a
sigh of relief that Barack Obama was re-elected. In the coming budget
fights, we’ll need a President willing to compromise and work across
the aisle.

Despite the claims of Mitt Romney and Republicans, the U.S. economy
continues to tick slowly upwards with 29 consecutive months of job
growth and the trend looks set to continue. But the next big political
fight will come over massive automatic federal spending
cuts—‘sequestration’—that will occur if Congress and the President do
not agree to a budget deal. The cuts will essentially lock up over $1
trillion and prevent it from being spent, half coming from defense
spending, the other from domestic programs.

Sequestration provided the incentive for the failed budget
‘supercommittee’ to reach agreement. When former Vice-Presidential
contender Paul Ryan accused President Obama of wanting to cut
defense spending, sequestration was what he was referring to—a bit
dishonest considering it was part of a bipartisan deal between
Democrats and Republicans, including Ryan himself as Chairman of the
House Budget Committee.

Efforts to stave off sequestration by passing an agreement acceptable
to both parties have essentially been put on hold pending the results
of the election. Both parties needed to see who would end up in the
White House and Senate before deciding how hard they could push and
what mandate would be impliedly returned from the American people.
They have their answer. The President and Democrats have successfully
made the argument that reducing the federal deficit can only be done
through a reasonable combination of raising revenue and cutting
spending. The revenue would, and should, come from those who can
afford it, namely those making incomes over $250,000 a year. This
would be paired with cuts to spending at a ratio approaching $2.50 in
cuts for every $1 in revenue raised. In returning the President to
office and Democrats to the Senate, the American people have spoken.

To this point, Republicans have argued there should be no increases in
taxes and that the only way to increase revenue is to cut taxes to
promote private-sector growth, in turn returning more revenue. This,
paired with large cuts to domestic programs important to the middle
class, was their solution to the deficit problem. Then again, it’s
always their solution to every problem, whether in good times or bad.
The election result shows Americans have rejected it. Anyone who looks
at their own household finances knows there is only so far you can cut
your spending. Hoping your boss will make a large enough profit to
give you a pay raise won’t feed your family. When you’re short on money, the
better option is to cut what you can and find some way to bring more
money in to pay the bills. The same idea applies to the government
deficit and asking those who can most afford it to pay their fair
share is the right way to do it instead of increasing the burden on
the struggling unemployed and middle class.

But don’t look to Republicans to offer leadership on a compromise even
now. Many are locked into ‘no taxes’ pledges made popular by
conservative commentator Grover Norquist. The belief that taxes should
be cut and never raised is a Republican article of faith. The GOP have
hamstrung themselves from being able to talk about increasing revenue
in any sort of reasonable manner, even when it is essential to
reducing the federal deficit (another Republican whipping boy) and
staving off the effects of sequestration. America’s fragile recovery
requires that a deal be reached. Many have signed away their ability to
compromise even when staring sequestration in the face.

In contrast, President Obama has shown himself to be ready to reach
compromises and reach across the aisle to do so. With congressional
Republicans locked into ridiculous tax pledges, it’s going to take a
President willing to make a deal to get the job done and save the
federal budget from falling off the fiscal cliff that sequestration
represents. Now that the election is over, the real work of governing
can start. It’s a good thing we have a President who can get it done.