Where Are Fiscal Cliff Negotiations Headed?

If so-called fiscal cliff negotiations have been frustrating for those we’ve elected to leadership positions, it’s been much more so for those of us watching from the outside.  After we elect them, they take the wheel, and it’s unclear whether they’re about to drive us over a cliff.

After last week’s futile negotiations, lawmakers’ predictions and outlooks span from optimistic to flat out pessimistic.  Speaker of the House John Boehner (R-OH) has expressed his frustrations saying, “we’re nowhere.”  As Speaker, he has the difficult task of trying to negotiate with President Obama who has diametrically opposed views regarding how to properly avoid the fiscal cliff.  Speaker Boehner said, “The President’s idea of negotiation is, roll over and do what I ask.”

Similarly, Rep. Lindsey Graham’s (R-SC) predicts, “we’re going over the cliff.”  Graham stated that he’d go back on his pledge to his constituents not to raise taxes, as long as entitlement reform was truly pursued, but as he sees it, the President’s entitlement cuts are “a joke.” 

Sen. Richard Blumenthal (D-CT), for some mysterious reason, thinks a deal will be reached to avoid the fiscal cliff. Well it’s not that mysterious, actually.  He’s encouraged by the sheer numbers of Republicans who are folding under the pressure of liberal groups and big-government pundits to raise tax revenues, whether that means increasing tax rates or removing deductions and closing loopholes to raise taxes through the back door.  Principles…  Who needs ‘em?

What this is boiling down to is the left obstinately demanding tax hikes and the right succumbing to the pressure.  It is nonsensical to try to avoid the fiscal cliff — the central problem of which is massive tax hikes — by raising taxes.

Yet, as Heritage explains:

President Obama’s answer to the fiscal cliff is a proposed $1.6 trillion in tax hikes plus new stimulus spending—and expanded power for himself to raise the debt ceiling without congressional approval. He suggests only magnifying the policies that brought us to the fiscal cliff in the first place.”

The discussion of taxes has played out on the left’s home field: emotion.  Conservatives argue from a principled, rational perspective that we do not want to raise taxes because it’s bad for the economy and it smothers job creation.

The left, on the other hand, argues from the perspective of emotion.  With whiny rhetoric, which quite frankly would sound more appropriate coming from a five-year-old, they demand that the “rich” pay their “fair-share!”

Yet, those on the right seem to be conceding defeat.  And it’s not only tax hikes that will come with the fiscal cliff.  Heritage outlines three other effects of going over the fiscal cliff and what Congress should do to avert the problems that will result.

In addition to tax hikes, defense cuts known as “sequestration” are also coming that will “directly affect military readiness.”  Heritage recommends that these cuts should be prevented, preferably by cutting other spending.  And remember, the House passed a plan earlier this year to do just that.

The “Doc Fix” is set to expire, and if Congress does not act, doctors will see a 27 percent pay decrease, which will without a doubt render them less accessible to Medicare patients.  Heritage recommends that Congress implement real Medicare reforms that will permanently solve this issue in the future.

Finally, federal funding for unemployment insurance (UI) is set to expire at the end of the year.  These benefits, paid for by employers, often serve as a safety net during a recession; however, the length of time they are made available should be shortened, since “extending UI also increases unemployment and can curt those it is meant to help.  Extending benefits for too long encourages the unemployed to postpone job searches or hold out for something that may not be attainable.”

It was a rueful error to leave these important decisions for the eleventh hour.  It’s not surprising though.   If lawmakers could implement the conservative reforms suggested by Heritage, they could redeem themselves.  Hopefully, our lawmakers will not, in the words of Speaker Boehner, “roll over” do whatever President Obama demands.

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