Economy & Budget

I have a simple plea to John Boehner – be the Speaker.

The Speaker of the House can dictate what spending gets done and what doesn’t, if he uses his constitutional powers.

The president can merely sign or reject anything passed by the Congress.

The Senate can merely accept or amend anything passed by the House.

It is Boehner’s House that holds all the cards in the spending/tax debate. So, come back from Christmas and start playing them.

Speaker Boehner’s “Plan B” is clearly a tactic, not a serious proposal, and it is going nowhere.
 
It reminds me of the Bruce Springsteen song “Radio Nowhere” — “I was trying to find my way home/ But all I heard was a drone/ Bouncing off a satellite … This is Radio Nowhere/ Is there anybody alive out there?”
 
Really, we are so very close to an agreement, why put out a “Plan Nowhere” that is not a serious proposal? In fact, it would make the problems worse if it were to be adopted, which it won’t.
 
Why would he do this?

Are the Republicans allowing President Obama to define the issues in the fiscal-cliff debate? President Obama desperately would like to keep the focus on taxes when the most severe problem is spending. It must be emphasized that you can tax the top 2 percent at 100 percent and you would still have a gigantic fiscal problem.

In my latest column, “Les GOP Misérables,” I wrote that the GOP obsession with pursuing losing issues (e.g., cutting Medicare and Social Security) has led to recent defeats and will lead to more. The right might love it when Republicans say Obama "does not need the left,” but on Social Security and Medicare the Democrats and the left win big. Republicans and the right lose big. This is the ace in the hole for House Minority Leader Nancy Pelosi (D-Calif.) during the fiscal-cliff negotiations:

The chessboard is now being arranged in a way in which House Republicans will vote to cut Medicare and Social Security while their Democratic challengers in the next election will not.

According to Wikipedia:

“Opportunity cost is the cost of any activity measured in terms of the value of the next best alternative forgone … It is the sacrifice related to the second best choice available to someone, or group, who has picked among several mutually exclusive choices. The opportunity cost is also the ‘cost’ (as a lost benefit) of the forgone products after making a choice. Opportunity cost is a key concept in economics, and has been described as expressing ‘the basic relationship between scarcity and choice.’ ”

As my friend Steve Bell, of the Bipartisan Policy Center, reminded me yesterday, the opportunity costs of not doing a “big” deal that includes fundamental entitlement and tax reform in the context of the fiscal cliff are enormous.

The First World War was begun because of incompetent statesmanship by leaders who did not want a war but blundered into one. The fiscal-cliff fiasco can only happen if leaders in Washington continue the same mistakes that have plagued the capital for far too long and blunder into an economic crash they do not want.

Given the limited time and momentous issues surrounding the fiscal-cliff discussions, I propose that first, Congress enact a 30- to 45-day cooling-off "punt"; second, that Senate leaders be brought into the center of the fiscal-cliff talks; and third, that a major round of fiscal-cliff talks be conducted in public and broadcast live on C-SPAN.

The very notion that we can borrow our way out of the recession seems to be the latest diversion these days, but it is bound to have unintended consequences.

For starters, it sends the wrong message to consumers and businesses in our economy that are already leveraged to the hilt in debt. It sends the message, whether intended or not, that spending profligately beyond our means will ultimately save us from the results of having lived beyond all measure of financial prudence as individuals and as a nation.

Mike Simpson is thinking big.
 
Barack Obama is thinking small.
 
Simpson, an Idaho Republican, recently spearheaded a bipartisan letter in the House urging negotiators to go big when dealing with the financial cliff. Mike is no Johnny-come-lately in his thoughts. He urged the same thing of the so-called supercommittee last year, and his efforts landed him a primary opponent.

The Hill’s A.B. Stoddard takes your questions on the looming "fiscal cliff" and the chances President Obama and Congress can reach a deficit-reduction deal by year's end.

The International Monetary Fund has jumped into the so-called “fiscal cliff” crisis in the United States with Managing Director Christine LaGarde weighing in on the situation this past weekend, saying, “The best way to go forward is to have a balanced approach that takes into account both increasing the revenue, which means raising tax or creating new sources of revenue, and cutting spending as well.”

Speaker Boehner should immediately take Ms. LaGarde up on her challenge by eliminating the $100 billion line of credit that the U.S. Treasury has given LaGarde’s IMF.