Economy & Budget

The arguments for entitlements are usually moral arguments, never economic arguments. No one thinks that it’s good for our economy, even the most reality-phobic Keynesian. It is never “this will work and we’ll all prosper,” but always presented to us in moral guise: “Don’t throw Grammaw off the cliff!”

Perhaps it is time for Congress to zero out the budget of the Bureau of Labor Statistics, an agency of the Department of Labor whose data is so important to financial markets that figuring out how to protect it against its early release has become a major debate in the halls of the Frances Perkins Building.

Why? Their work has become increasingly irrelevant.

Congress has a responsibility to ensure that taxpayers’ money is spent prudently. It also has a fiduciary responsibility to future generations to preserve the country’s assets and to pass on a financially sound government and society. It would be fiscally irresponsible for Congress to authorize spending money today for current consumption that it must borrow. It should never borrow money unless it is creating infrastructure and investment that will benefit future generations. Each generation of Americans must pay for its current government consumption. It should not create consumption liabilities that future generations must repay.

I believe that everyone in public office, and any serious opinion writer, has some obligation to move beyond the talking points and offer some concrete proposal for the good of the country. Here is my proposal for the grand bargain that will address revenue, entitlements and defense spending based on my experience working for and with Democratic leaders and being involved in similar deals. I do not expect this note to generate many comments because I am not doing the ritual partisan talking points that both sides dispense, but I would urge any who do comment to write what YOU would offer that YOU don't like, as I am doing here by suggesting a few things that I do not like.

The Kinks song "Lola" tells the story of "a mixed up muddled up shook up world," and that is how any Capitol Hill observer must feel with Washington, D.C., Republicans openly talking about agreeing to as much as $1.2 trillion in new taxes over the course of the next 10 years.

The negotiations over whether or not to plunge the U.S. economy into quicksand is getting disturbing. Both sides told me this week the other party would take us off the cliff. Translation: both parties are willing to let the other one do it because blame is bigger than a breakthrough that would cause political pain. The offer from the Obama administration outlined to Republicans in Congress yesterday was a mistake — forget the substance — because it said not only are they willing to waste more time, but that infuriating House conservatives and creeping closer to the cliff is just fine with the president.

We're five weeks out from the "fiscal cliff deadline," and it’s becoming apparent one of America’s two political parties has to give.

One has to level with the people about the choices that lie ahead, face up to the results of the election, cease considering itself bound by promises to outsiders and commit itself, finally, to finding a durable solution.

And that party is the Democratic Party. 

Let me respond to some of my Republican friends who write about the "fiscal cliff." I know more about the private thinking of highest-level Democrats in this town than any of them, and I guarantee they all want a bipartisan solution to avoid the fiscal cliff of automatic spending cuts and tax increases. They all understand that the solution must involve a compromise between both parties. The issue is where in the middle the two parties meet. The bottom line is that Democrats won the election of 2012 and won three of the last four national elections (2006, 2008, 2012). Voters have chosen: they want a solution closer to the Democratic and liberal position than the Republican and conservative position.

It is not clear whether America will continue to slide down the fiscal cliff. No one falls off the cliff —  it's just a matter of continuing to slide into uncharted financial wasteland. 

I want to extend my congratulations to President Obama and the Democratic Party for being able to successfully shift the focus from fiscal responsibility to taxing the wealthy and entrepreneurial class. 

If we look at this situation purely on the surface, raising taxes on the job creators and the financially successful seems to be a viable solution, especially for the people who do not fit into those categories. Because of human nature, we are wired to think that it is right to “take his” and “not mine.”