The world will not end on New Year’s Day. Apocalyptic predictions about fiscal cliff doomsday are coming from the same lawmakers who created the fiscal cliff to coerce themselves to do something, anything, to get government spending and deficits under control. Fortunately, Congress passed the Budget Control Act and we can rely on the usual bipartisan cooperation to figure out how to get rid of it (see: Halting the Sequester Will Be a Historic Betrayal). In the meantime, rest easy. We already have five bipartisan fixes to fiscal Armageddon that Congress has agreed to, Democrats and Republicans alike.
1: Do nothing. Government spending cuts are for cowards.
How many times have we been down this road? After the floor speeches about our children’s future, after the deal is cut, and when the numbers have been manipulated and the math confused, whatever historic progress is finally announced fails to even scratch our mountain of debt. Instead of going to all the trouble to hammer out a deal, the best fiscal policy is to be brave, do nothing, and see what happens. Lawmakers know better than us how to handle this sort of thing. They have been toughing it out for years and we are all still here, aren’t we?
2: Fiscal policy decisions must be deferred until the next election is over.
Cans are made for kicking and the decision making road is long. Lawmakers tacitly agree that discussing spending cuts and deficit reduction is good primarily for the PR value of the appearance of progress. What better straw man to attract a little attention than the bipartisan fiscal cliff?
The best fiscal policy decisions come from deferring decision making. The Budget Control Act bought lawmakers over a year and got them through a presidential election. Perhaps Budget Control Act II and a revived sucker committee with a new framework for decisive action can carry us through until 2016, or at least to the next midterms.
3: Do not touch entitlements for seniors. They are still solvent enough.
Social Security and Medicare are still afloat. If they’re not broke yet, leave them alone. The fallout from tinkering with these senior citizen entitlements is too unpleasant to contemplate, so it is best to wait until both are out of money. When that happens, instead of worrying about how to cut entitlement spending Congress can fight over how to spend more to rescue these time-honored safety nets and score a few political points in the process.
4: Give the middle class their tax cut, but not without a struggle.
Remember the Christmas 2011 debacle over extending the Bush tax rates for the middle class (see: Congress Pounds a Holly Stake Through Middle Class Hearts)? House Republicans embarrassed themselves by backing away from an extension they had already endorsed, then deciding to go along after all when the fallout became too hot to handle. As long as lawmakers tie the extension to denying the president his tax hike on the damnable 2%, we can forget 2012 altogether and turn the clock back to December 2011. This time that bipartisan tax rate extension is going to go down a whole lot easier.
5. All government spending is essential.
Fiscal policy is complex, so it is not surprising that most Americans don’t understand that all government spending is necessary. This is about perspective, not balance sheets, revenue streams, or budget projections. A favorite Republican defense project is no less important than a Democrat’s inner city grant (see: Will Obama’s Tax Hikes Pay for Reid’s Arts Grants?). If there is confusion over how we can run up jaw dropping deficits while being fiscally responsible, remember that the problem does not come from too much spending or misguided fiscal policy. We just haven’t waited long enough for the benefits of the bigger picture to kick in. Perhaps the health care bill’s Medicaid spending will help bring those deficits down.
One more: At all costs, lawmakers’ salaries must be spared.
Someone has to make the big decisions to keep the country running. It strains the imagination to think what might happen if we didn’t have Congress to watch America’s back. To all of you hard workers on Capitol Hill, thanks. We are glad we can depend on you.