The punch-line: He only signed one document. How’d that happen? Well, the tax cuts championed by Bush and congressional Republicans came with a catch. In order to mask the negative impact on the nation’s deficit, these tax cuts that primarily benefited the wealthiest Americans were designed to expire in 10 years. Now you see them, 10 years later they disappear and the old rates are restored.
Nifty trick, eh? Take credit for the tax cuts but obscure how the reduction in revenue to the federal treasury will make it more difficult to balance the government’s books.
Well, most politicians — being human and all— will put off pain for as long as possible.
Two years ago, as the tax cuts were about to expire, Republicans and Democrats, including President Barack Obama, struck a deal to extend the tax cuts for an additional two years.
By the end of 2012, the thinking went, the nation will have had a presidential election and perhaps a clearer path would be apparent. Fresh off dominating victories in the 2010 midterm elections and with a weak economy, Republicans were fairly confident Obama would be a one-term president. Democrats were hoping that if the election went the other way, they’d have a president with a second term in the bank once it came time to confront the tax cut issue.
By August 2011, a deal over extending the nation’s debt ceiling set up even greater stakes for the end of this year. Now unless something is done before the end of 2012, a series of automatic budget cuts will accompany the conclusion of those 2001 Bush tax cuts, something ominously called the “fiscal cliff.” Many economists predict falling off that cliff will send the economy back down into the depths.
It appears the time for delaying tough choices is at an end. We’d be more certain were it not for the seemingly limitless ability of politicians to slither past thorny problems without offering real solutions.
However, let’s assume there’ll be no Houdini great escapes over the next five or so weeks.
Republicans carry the heaviest burden in negotiations to avoid falling off the cliff. The vast majority of congressional Republicans have signed a pledge vowing to not raise taxes. In effect, these politicians have delegated a key responsibility of a lawmaker — tax policy — to Grover Norquist, the leader of Americans for Tax Reform who rides herd over the signers of the pledge.
To strike a deal and thereby inch away from the fiscal cliff, Republicans will have to loosen their opposition to tax increases, just as Democrats must be willing to bargain over cuts to spending.
Politics is the art of compromise. The artists in Washington will have their work cut out for them in the weeks left in 2012.