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Looming 'fiscal cliff' set to force Republicans, Democrats into compromise

Sunday, 2 December 2012 - 3:55pm IST | Place: Washington | Agency: The Sunday Telegraph

The 'fiscal cliff' that looms at year-end, exactly when the Bush tax cuts are set to expire and some $1.2trillion in cuts are set to take effect.

The Lame Duck Meets the Fiscal Cliff. It sounds like the start of a bad joke or a Bugs Bunny cartoon. But it's the impending reality right now in Washington DC. With the elections over, what's known as a "lame duck" Congress reconvenes.

In the past, this was a time for cleaning out offices and tying up legislative loose ends before it dissolves to make way for its newly elected successor in January. But in an era of hyper-partisanship and permanent campaigns it has become prime deal-making time.

The reason is frankly pathetic: it's about the only time politicians feel free to vote completely according to their conscience, especially if they've been kicked out of office.

This year there is added urgency — the "fiscal cliff" that looms at year-end. That's when the Bush tax cuts are set to expire and some $1.2trillion in cuts are set to take effect. Some economists estimate that the immediate impact of both could propel the country back into recession.

With the economy showing real signs of improvement, Americans are nervously watching negotiations play out and praying that Congress doesn't find a way to screw this recovery up. It's a little like watching a baby play with a hammer.

Such high stakes have a way of focusing the mind. Both sides are at least talking about the importance of a balanced bipartisan deficit deal. But beneath that broad bumper sticker of consensus, things start to fall apart.

President Barack Obama's hand has been strengthened by his convincing win. The conservative approach of ideological obstructionism that dominated the past two years was soundly rejected - but that doesn't mean it has been entirely discredited in the minds of party activists.

For well over a decade, Republican senators and congressmen felt obliged to sign up to the anti-tax pledge brilliantly promoted by the lobbyist Grover Norquist, lest they fall foul of the Right.

Now that pledge is being rejected by a growing number of responsible Republicans, who recognise that any serious deficit reduction deal will require new tax revenue. In addition, some respected party mandarins argue that the president's commitment to extend the tax cuts so that 98 per cent of Americans still benefit from them looks like a better deal than letting them expire for everyone.

Only in our divided, dysfunctional Congress could 98 per cent agreement seem like a cavernous gap. Making matters worse are the "cliff-deniers" at either end of the spectrum, who are arguing that the country should go over the cliff in a sign of defiance to the other party.

This is what happens when hyper-partisans start getting drunk on their own Kool-Aid - they think they can defy gravity and play chicken with the cliff. But the election is over. This isn't an ideological debating society: it is time to solve urgent problems while keeping our economy from going off the edge again.

Both sides will have to compromise. Republicans have to yield on taxes, Democrats are going to have to back cuts and entitlement reforms, such as raising the Medicare eligibility age from 67 to 69, as the White House is currently offering to do.

Neither party's base will be happy, but perfect isn't on this Christmas menu.

Danger remains. Democrats are feeling flush and Republicans desperate. Arrogant activists on both sides deride compromise. If this lame duck is allowed to go over the fiscal cliff, it will be a failure of leadership and a fundamental misreading of the election results. In the meantime, the nation waits with one simple message for Congress: make a damn deal.

John Avlon is senior columnist for Newsweek and The Daily Beast

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