This editorial will appear in Thursday’s print edition.
In Congress, America needs a rational, functional Republican Party. As the fiscal cliff dispute is demonstrating, it doesn’t have one.
For years now, the bickering over the nation’s dangerous deficits has revolved around whether to keep Bush-era tax cuts in place for everyone – the official Republican position – or let them expire only for the wealthiest Americans, as most Democrats favor.
Marginal tax rates for the rich are only part of the nation’s overall deficit problem, but you’d never know it from the noise emanating from the capital. House Republicans and President Obama can’t agree on that question, so they haven’t been able to move on to other necessary action – including averting the “fiscal cliff” that threatens the economy if a slew of tax breaks all expire at once.
Many economists believe America’s increasingly healthy economy would be thrown into recession without at least a short-term budget deal. One number illustrates the threat: According to the respected Tax Policy Center, middle-class households with incomes running from $50,000 to $75,000 would see their taxes jump $2,399 next year, a severe loss of spending power.
Under sequestration – the mutual-assured-destruction pact Republicans and Democrats signed last year – the economy will also be slammed by a barrage of harsh spending cuts. The theory behind sequestration was that the cuts would be so intolerable to everyone, Congress would be forced to do something.
The Republican House majority has now done something. It has collapsed.
A deal appeared in the offing earlier this month. Obama had offered to let the tax cuts expire for Americans with incomes exceeding $400,000 a year (the earlier Democratic talking point had called for $250,000). Majority Leader Boehner countered with an offer to allow the increase to fall on people with incomes exceeding $1 million.
Both positions were drenched with partisan maneuvering and cynical calculation. But they were offers, and thus might have led to counter-offers.
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