Charles Krauthammer advocates real compromise when it comes to avoiding the fiscal cliff, saying Republicans should concede to tax increases only as accompanied by cuts to discretionary and entitlement spending along with tax code reform. In his weekly Washington Post column, Krauthammer writes that Speaker Boehner and his House Republican majority shouldn’t deal as if they come to the table without a card to play. They’ll take a hit, but President Obama will suffer lasting damage to his legacy if the American economy gets hit with across-the-board tax hikes in January.
There’s been a scuffle within the GOP family about the best way to proceed here. The reality is that we have a massive and growing national debt that must be addressed. The fiscal cliff does just that – but so suddenly and substantially that it seems untenable. The better way is with a deal that steadily reduces debt but also promotes prosperity and growth.
Real cuts to discretionary spending is probably the easiest place to start politically, and the need for them should be self-evident. Some of the fiscal cliff cuts are actually a decent place to start, but a new deal could contain a smaller package of cuts and one that no longer requires the military to take on the largest proportional share of spending reductions.
Entitlement reform will be incredibly difficult to agree (especially in such a short period of time) but really it must be included – even if it is a modest, incremental change, such as the gradual raising of the age of social security eligibility, say, by one or two years over the next decade. Something that will at least begin to change the liability curve over time and prevent these programs from not only consuming an ever-greater share of the budget annually but eventually drowning us in red ink entirely. We have got to start somewhere.
In exchange for these cuts, Republicans should go along with the removal of certain exemptions from the tax code. Everything should be looked at. All things being equal, you avoid popular programs like the home mortgage interest deduction to the degree possible. You also bring to the table cuts to corporate welfare; most obviously cases like Solyndra, where economically dubious pet projects are being promoted, but handouts for other business interests as well. Scaling back exemptions and subsidies not only relieves deficits but also flattens the tax code, which should be a perennial goal for the Republican Party.
All of that is easier said than done of course, but it could be a good road map for the next month as lawmakers try to avoid walking us off this cliff we have created for ourselves.
Howard Rich of Americans for Limited Government takes to the pages of Investors Business Daily to discuss the impact of the Patient Protection and Affordable Care Act, now that the election results means it is here to stay. Along with the mandate on individuals to carry health insurance or be fined, Obamacare also requires employers to provide coverage to employees working thirty hours or more per week.
“Not only will this mandate prevent job growth among small businesses, it will also result in fewer hours and less income for workers at larger companies. These are people struggling to make ends meet on limited income — people who cannot afford to lose these hours.”
Rich notes that Darden Restaurants, which employs 185,000 nationwide in popular chains like Olive Garden, announced last month it was reducing many employees’ schedules to twenty-eight hours a week. Kroger, a grocer with 350,000 employees, is making a similar move and will restrict part-time personnel to twenty-eight hours.
“In other words ObamaCare’s “employer mandate” will wind up hurting the very people Obama claims to be fighting for — reducing their take-home pay at a time when loose monetary policy is already whittling away at the value of every dollar they earn.”
The other possibility here – one that will be harder to detect and report – is that some employers will simply follow the law by providing insurance, but offsetting the cost through lower or stagnant wages. Or prices will simply rise, etc.
There simply is no such thing as a free lunch.
Governor Mitt Romney‘s concession speech, in text and video at the New York Times.
President Barack Obama‘s victory speech, also via the NYT.
Michael Barone, author of the Almanac of American Politics and senior editor at The Washington Examiner, is forecasting a Romney win this Tuesday. I’ve waffled and haven’t wanted to make many predictions because the race has been so close at times and momentum has shifted at various junctures. Romney definitely seems to have had it the last several weeks – since the first debate, really – but may have plateaued at some point. The electoral college math is difficult for Romney-Ryan, no matter how you look at it.
Barone – who knows politics and elections like few others – actually says Romney wins the electoral college by a good margin, 315-223. He chalks up Indiana and North Carolina to the challenger (a safe bet for some time now) plus Florida, Ohio, Virginia, Colorado, Iowa and New Hampshire. The biggest surprise? He also includes Wisconsin and Pennsylvania in the list. The only swing states (which really have been Obama-leaning states for some time now in my view) he gives to the prez are Nevada, New Mexico, Michigan and Minnesota.
By this tabulation, Mitt Romney could still lose Pennsylvania (20), Wisconsin (10), Colorado (9) and New Hampshire (4) and still win the election. Encouraging. But as many others have noted, he’s got to win Ohio to take this thing.