How easy is it to solve the fiscal cliff? Senator Bob Corker (R-TN) says it’s very simple indeed — and this Congress has already had “two practice runs” in addressing all of the issues that will have to get resolved before New Years Day to avoid disaster. Frustrated by proposals for short-term extensions, Corker wrote his own proposal that cuts over $4 trillion in projected deficits over the next ten years, includes more than a trillion dollars in new revenues, and wants that to serve as an example of how easy it is to resolve the standoff:
As Congress returns to Washington this week with a renewed focus on the fiscal cliff, Sen. Bob Corker, R-Tenn., said on “CBS This Morning” that Congress has no reason not to act.
“No Congress in history is more prepared to make these decisions,” he said, referring to the legislative body’s major negotiations over the past two years to raise the debt ceiling and reduce spending. “We’ve litigated this; we’ve gone through every single score of every single decision that would have to be made.”
The member of the Senate Banking Committee also wrote an op-ed in The Washington Post today, where he said, “The fiscal cliff is a deadline of the 112th Congress’ making” and that “kicking the can down the road… is misguided and irresponsible and shows a total lack of courage. ”
“What it takes is political courage,” Corker said on “CBS This Morning.”
Corker drafted a bill to cut $4.5 trillion from the deficit. It includes $1 trillion in revenue and reforms to entitlements programs Medicare, Medicaid and Social Security.
“I don’t know a Republican who has written a bill that has a trillion dollars in revenue… but it’s coupled with real entitlement reform,” Corker said. He said his bill shows that “this is a very easy thing to do technically.”
When asked whether he feels bound to adhere to the “no new taxes” pledge demanded by Americans for Tax Reform’s Grover Norquist, Corker reminds CBS that he’s never made himself subject to it in the first place. Other Republicans repudiated it this weekend, however. Lindsey Graham was an unsurprising member of that group, but it also included Senator Saxby Chambliss and Rep. Peter King:
Three big-name Republicans broke with Grover Norquist over the holiday weekend, saying they won’t be bound by their Norquist-sponsored pledges to oppose any and all tax increases.
The moves by Sens. Lindsey Graham (S.C.) and Saxby Chambliss (Ga.) and Rep. Peter King (N.Y.) represent the opening steps of a delicate dance for the GOP — and one that could come to define the just-begun talks over the looming “fiscal cliff.”
The question from here is whether this represents a simple trial balloon or the beginning of a movement in which a large segment of the GOP embraces a tax increase as an unhappy reality.
If that were to occur, it would both mark a significant shift in party orthodoxy and also threaten to make the tea party primaries of 2010 and 2012 seem tame.
I’m not so sure it will have that kind of effect. In the wake of the election, some conservatives are offering the political equivalent of throwing their hands up in the air. Giving Obama what he wants on tax rates might be the only way to demonstrate the folly of jacking up taxes in a recession/stagnation environment. The larger disaster of a fiscal cliff might be avoided, but the responsibility for continuing stagnation and rapid growth of debt — which is impossible to avoid in this approach — will fall squarely on Obama’s shoulders. Meanwhile, the GOP should be able to get substantial entitlement reform as a trade-off, which Dick Durbin offered yesterday.
The problem in the deficit is spending, not a lack of revenue. The share of federal government spending from the US economy leapt from ~20% to 25% in the last four years, and until we deal with that, we can’t solve the overall problem. That solution requires entitlement reform, and that might have to be a bigger goal than freezing tax rates at the present level.