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Where is the grand bargain?



Published: Fri, January 4, 2013 @ 12:00 a.m.

Our divided, gridlocked political system seems incapable of resolving the government’s long-term deficit problem.

“This shouldn’t be the model for how we do things around here,” Senate Republican leader Mitch McConnell grumped as the Senate prepared to pass the compromise bill preventing millions of Americans from falling off the over-hyped “fiscal cliff.”

His criticism seemed a bit odd, since McConnell largely negotiated the measure with Vice President Joe Biden. But he was far from the only reluctant supporter who blasted both the method and the substance of the latest congressional deadline decisions.

“The measure before us and the process that brought us here has been the source of a great deal of understandable consternation,” Republican Rep. David Dreier of California said in launching the House debate. “Virtually no one believes that what we have before us tonight is a long-term solution to this problem.”

No ‘grand bargain’

All true enough. To be sure, the agreement provides substantial protection for middle class families, farmers and the unemployed. But unfortunately, it fell short of the “grand bargain,” the long-term, balanced fix for the government’s fiscal problems that President Barack Obama sought in talks with House Speaker John Boehner.

As a result, this is just the first in what will be a series of pitched battles between Obama and congressional Republicans, each likely to persist to the brink of economic disaster, or beyond, and each likely to ultimately produce another negotiated compromise.

The focal points are already established for each:

The requirement by late February or early March for raising the legal limit on the federal debt, the subject of a bitter battle in the summer of 2011, along with the new deadline for the spending cuts that had been scheduled to take effect Jan. 1.

The expiration on March 27 of federal spending authority for the 2013 fiscal year, which runs until next Sept. 30.

The need to provide funds for the next fiscal year, which starts on Oct. 1.

House GOP leaders also plan to produce a major tax reform measure this year, opening yet another forum for conflict between Republicans seeking to limit additional revenues and Democrats hoping to extract some.

Republicans have already made clear they expect in future battles to have the political leverage Obama enjoyed this time, thanks to his election victory and public support of his determination to bar extension of expiring tax cuts for wealthier Americans. GOP lawmakers say they’ll shut down the government if necessary unless Obama agrees to significant federal spending reductions, including structural curbs on Medicare and Social Security.

But he made clear again after this week’s action that he’ll press for more revenue increases, noting this bill provided less than he sought and said he’ll refuse to negotiate on the debt ceiling. But he may find that an uphill fight in the face of solid GOP opposition to further tax increases and the widespread Republican view it will be its turn to call the shots.

In the end, enactment of the latest measure is more important than how it was done. It provides some of the certainty in tax policy that business leaders have demanded for several years and, as such, provided an initial spur to the stock market and, hopefully, to business investment.

Long-term deficit

Still, it does nothing to resolve the government’s long-term deficit problem, something that always proves difficult because spending cuts such as the now-delayed $1.2 trillion sequester not only can hurt individual segments of the population, but could provide a drag on growth at a time the economy is still struggling to emerge from the recent recession.

Ideally, these issues could all be tackled and resolved at once. But the Obama-Boehner talks suggest this is simply too much for the closely divided, gridlocked political system to handle, especially since Boehner needs Democratic votes to pass any such legislation.

Inevitably, the course of these future battles, and any subsequent agreements, may be derided as many have done in recent days. But this messy process still holds the only real promise of resolving some long-festering issues, provided both sides ultimately show the willingness to compromise that produced this agreement.

Carl P. Leubsdorf is the former Washington bureau chief of the Dallas Morning News. Distributed by McClatchy-Tribune Information Services.

Copyright 2013 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


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