Jewish World Review
April 4, 2011
To save the country, we need 'grand bargains'
We need grand bargains to tame the burgeoning federal debt, which threatens the next generation's ability to invest and grow -- big bargains to reduce spending (especially entitlements) and reform taxes.
We need bargains on energy policy to reduce our costly dependency on Middle East imports; on immigration to ensure that we can attract and keep skilled labor; on education to prepare our own kids for 21st-century competition; and on strategies to invest in infrastructure.
We probably will need a grand bargain to rewrite President Barack Obama's healthcare law, which the Supreme Court may strike down, but which, if upheld, will impose enormous costs on the country.
We'll get the bargains only if Republicans and Democrats work together, because neither party is ever likely to so dominate the government that it can push through its entire agenda.
Democrats had that power after the 2008 election -- including 60 votes in the Senate and control of the House and White House -- and promptly lost it through overreaching liberalism. Voters don't want overreaching conservatism, either.
This is a "one last time" call for bargains because, after 48 years in journalism and nearly 20 years writing this column, I am semi-retiring and leaving it to others to bang the gong for centrist problem-solving.
I'll chime in from time to time, but now it's up to the likes of David Brooks of the New York Times, David Ignatius of the Washington Post, Fareed Zakaria of CNN and Bill Galston of the Brookings Institution and The New Republic to carry the cause.
And there are many in U.S. politics who understand the need for bipartisan action to solve America's problems -- as witness the "gang of six" senators working to defuse the federal debt bomb before it brings down the U.S. economy.
If archconservative Sen. Tom Coburn, R-Okla., and ultraliberal Sen. Dick Durbin, D-Ill., can agree to support the recommendations of Obama's debt commission, there's hope for the nation.
If House Republican leaders can team up with moderate Democrats to keep the government running -- and refuse to yield to tea-party ideologues and the demagogic presidential wannabes and talk-radio blowhards who urge them on -- there's hope.
If Republicans and Democrats can agree, as they did in the lame-duck session of the last Congress, to extend President George W. Bush's tax cuts for two years and also extend unemployment benefits and reduce payroll taxes, there's hope.
To be sure, that agreement involved dispensing largesse and increasing deficits. Defusing the debt bomb is going to require enormous political courage -- which is why Republicans and Democrats have to do it together.
Polls show that while the voters want deficits cut, they think it can be done simply by slashing foreign aid and raising taxes on the rich, not reducing Social Security, Medicare and middle-class tax breaks.
And so-called leaders -- Senate Majority Leader Harry Reid, D-Nev., and Democratic Conference Vice Chairman Charles Schumer, D-N.Y., come to mind -- seem bent on making the task harder by claiming that Social Security benefits needn't be touched.
Where Obama fits in this picture is anything but clear. He appointed the Simpson-Bowles commission, but he has yet to expend one erg of energy to help get it implemented.
In fact, he has stipulated that retirement benefits shouldn't be "slashed" -- even though the commission actually proposed gradually extending the retirement age to 69 in 2075.
The commission also proposed lifting the level of income subject to payroll taxes above its current $106,000 level.
It's a version of an idea floated by one of my favorite idea-activists, Rick Swartz, applying the principles of tax reform to Social Security by "broadening the base and lowering the rates," i.e., taxing all income but cutting tax rates to encourage hiring. Entitlement and tax reform are both going to encounter fierce resistance from entrenched interests, starting with AARP and extending to Grover Norquist's Americans for Tax Reform, which is currently attacking Coburn, of all people, for proposing to reduce tax breaks on business.
If General Electric can make enormous profits and pay no taxes whatsoever -- as The New York Times demonstrated last weekend -- there is obviously a crying need for tax reform.
There also needs to be at least a reduction in de-facto subsidies to industries like housing and health care -- also ethanol and oil -- that distort investment decisions.
Special interests will fight to defend them. But tax reform has happened before -- in 1986. The interests fought it, but it had President Ronald Reagan behind it, plus Senate Republicans plus House Democrats.
It didn't take a crisis to enact tax reform in 1986, but usually it does take one to compel difficult action. The imminent expiration of the federal debt ceiling could be a driving force for action on the debt.
Of the other bipartisan grand bargains that ought to be on the agenda, the one most possible this year would be on education reform, but at least there ought to be constructive debate on energy, immigration, health reform and infrastructure investment.
Republicans and Democrats have this incentive to do the right thing: The public does not trust either party. But more important, polls show that most people think that America's best days are behind it. Without the bargains, they will be.
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