After billions of dollars in campaign ads and rallies across the nation, the voters of the United States chose to reinstall the same president and congressional leadership that had presided over two fractious and difficult years. For Barack Obama, who had to face an electorate bruised by a slow-recovering economy, re-election is a personal triumph, a show of faith in his leadership under conditions that would have defeated many incumbent presidents.
But this was a status quo election in result only. With both presidential candidates and many victorious congressional candidates expressing a desire for bipartisan solutions, the message from the ballot box was clear: Obama and Congress need to work together, immediately, to avoid the upcoming “fiscal cliff” involving the expiration of the Bush tax cuts and automatic spending cuts to defense and other important programs.
The contours of a political compromise on the country’s long-term budget problems have always been visible, especially to Obama. But it took an election to make such a deal politically possible. Voters, it is now clear, want an agreement that embodies neither the full extent of Democratic priorities, which include higher income taxes on the rich, nor the Republican litmus-test position of no new revenues at all. The obvious result should be some combination of both, a real deal in which both sides make concessions.
More than a year ago, Obama and House Speaker John Boehner were making significant progress toward just such a “grand bargain” that would have combined, among other things, adjustments in Social Security and Medicare benefits, moderate cuts to the Defense Department and social programs, and increased revenues by closing certain loopholes and deductions in the tax code. Ideally, the tax simplification would have resulted in lower rates overall, but more revenue coming in from the closing of loopholes, while preserving the deductions relied on by the middle class, including home-mortgage interest (at least for reasonable-sized mortgages) and charitable giving. Such a deal would have reduced the long-term deficit, secured Social Security and Medicare until after the baby boomers’ retirement, and provided a predictable landscape for business.
Alas, it wasn’t to be. And the main stumbling block was neither Obama nor Boehner nor Senate leaders of either party; it was opposition within the House GOP caucus, from Tea Party conservatives who had been elected in 2010. Some of them will be returning to Congress. But after having watched the presidential candidates — and the nation — debate how to handle the fiscal cliff, these conservative diehards must now understand that the public is not on their side. Even if they persist in opposing any deal, Boehner should ignore them and bring a bill to the floor that could pass with support from moderates of both parties.
Republican presidential nominee Mitt Romney adhered to conservative orthodoxy during the primaries, vowing to curb the long-term deficit through spending cuts alone. He even proposed an additional tax cut on top of Bush’s. But that promise was roundly criticized by independent fiscal watchdogs. After defending it in the first debate, largely by minimizing its effect, Romney more or less dropped it from his stump speech. Throughout October, as Romney surged in the polls, he stressed his willingness to cut a deal with the Democrats; by Monday night in Manchester, N.H., he was inveighing against Obama’s failure to reach a deal with Republicans, and promising to negotiate with Democrats in good faith. Bipartisanship, not supply-side economics, was his closing promise.
Many of the people who voted for Romney did so in hopes of getting the very deal that Obama and Boehner failed to reach. And most of the people who voted for Obama embraced his promise of a “balanced approach” to fiscal problems, combining budget cuts with revenue increases — an approach entirely consistent with a renewed “grand bargain.”
The president should draw strength from his victory. But he knows his work, and that of Congress, must begin immediately. His second-term agenda can’t wait until the beginning of his second term.