NEGOTIATIONS ON the “fiscal cliff” are not going well. Republicans have accepted the theoretical need for new revenue but presented an offer that Democrats can’t afford to accept. President Obama’s team countered with a similarly unacceptable proposal to Republicans. Perhaps this is the necessary maneuvering before the real event. But there are fewer than a dozen legislative days left in the 112th Congress. As a practical matter, a deal to avert the fiscal cliff will need to be in place before Christmas. That leaves remarkably little time for the posturing to stop and the real work of finding acceptable middle ground to begin.
Rather than point fingers and assess relative degrees of intransigence, we’d like to take this moment to note the possibility that agreement can still be accomplished. Republicans are willing to support new revenue; House Speaker John Boehner (R-Ohio), in his negotiations last year with the White House, offered $800 billion. Mr. Obama is asking for $1.6 trillion with a down payment of about $1 trillion. It strikes us that there are reasonable, achievable meeting points between those two amounts. Likewise, as much as the matter of top tax rates appears to be a sticking point, the reality is that this issue, too, ought to be bridgeable. Mr. Obama has made clear that the Bush tax cuts for the wealthy must be allowed to expire, but he has refrained from asserting that the top rates in effect during the Clinton administration must be restored. Neither 39.6 percent, the top rate under President Clinton, nor 35 percent, the top rate ushered in under President George W. Bush, are engraved in stone on the commandments of their respective parties. There is a mathematical solution that involves a blend of higher rates and curtailed deductions.
It is legitimate for the president to hold out for as high a revenue target as possible. But that will also require him to proffer more in the way of entitlement reforms than many in his party will be happy to accept. This is an odd way in which the president’s interests align with those of Republicans. The best deal — best for the country and for its long-term fiscal future — is one that maximizes revenue increases and entitlement savings.
Mr. Obama, as his team points out, has already proffered about $340 billion in health-care savings as part of his budget submission, including such useful proposals as a premium surcharge for new Medicare beneficiaries who purchase first-dollar Medigap coverage, increasing premiums for higher-income seniors and instituting cost-sharing for home-health-care services.
During his negotiations with Mr. Boehner, the president also agreed to increase the eligibility age for Medicare beneficiaries from 65 to 67 and to change the way Social Security cost-of-living adjustments, as well as other programs, are calculated. If these offers are no longer on the table, Mr. Obama should explain why and come up with cost-saving alternatives.
At this point, neither side sees the other as bargaining in good faith — and both may be correct. But both parties and their leaders would do well to remember the stakes involved and the clear message from voters less than a month ago: that elected officials should quit the partisan bickering and work together to help solve the nation’s solvable problems.