Can foes come together?
America’s looming fiscal crisis might force congressional enemies to finally compromise

WASHINGTON — A ferocious storm is gathering on the horizon. The president and lawmakers can see it coming and fear its destructive force.

They are not powerless against it. They know how to protect the country.

But will they?Can congressional Democrats and Republicans work together, and with President Barack Obama, to avert the economic chaos from a fiscal thunderbolt due to strike on Jan. 1?

Most members of Ohio’s delegation said in interviews they have no choice.

“Not doing anything just makes the problem worse,” said Rep. Pat Tiberi, a Westerville-area Republican.

Yet, ask those Ohio members this question — “Are both spending cuts and tax increases necessary to solve America’s financial crisis?” — and vagueness reigns, with answers generally aping partisan talking points.

While most stressed the importance of working across the aisle, bipartisan solutions for America’s crushing financial problems will have to overcome salving the parties’ opposite ideological bases. For instance, persuading Rep. Jim Jordan, a tea party favorite and conservative Republican from Urbana, to work with Obama will be a tall order.

“The voters didn’t elect 87 new freshmen and send me back to Congress to raise taxes and compromise with Barack Obama,” Jordan said. “In fact, if you look at what 2010 was about, I would argue they sent us here to stop Barack Obama.”

Such sentiments are the grist for gridlock at a time when the country cannot afford it, said Rep. Steve Stivers, an Upper Arlington Republican.

“We need to come together as Republicans and Democrats,” he said. “I certainly don’t want to say we don’t need Jim Jordan — I’d love to have Jim Jordan vote for something — but we need to get enough votes from Republicans and Democrats to come together with a meaningful approach that we can present to the American people with a straight face and say, ‘This isn’t a Republican idea, this isn’t a Democratic idea, it’s an American idea, and this is how we’re going to solve this crisis.’ ”

Last summer’s debt-limit showdown left a terrible mess to resolve by Jan. 1, when a rash of tax breaks will expire and deep spending cuts will kick in. The resulting $500 billion in reduced spending and increased revenue in 2013 would help trim the nation’s deficit but could push a still-fragile economy back into recession, economists warn.

Serious negotiations to address the problem probably won’t occur until after the election, leaving a two-month lame-duck Congress little time to resolve monumental issues, including whether to extend investment, income and payroll-tax cuts affecting all Americans. There’s also the first phase of $1.2 trillion in automatic spending cuts due to go into effect, about half in defense spending, that must be considered.

Also looming is the thorny post-election issue of raising the debt ceiling. And there is the desire by many in Congress to attempt anew a “go big” solution in the lame-duck session, trying to agree on long-term fixes to the federal tax code while making hard choices needed to sustain Social Security, Medicare and Medicaid.

Sen. Rob Portman, the Ohio Republican who served on the budget “supercommittee” that failed to “go big” last fall, said he has met privately with some Senate Democrats to discuss compromises before the lame-duck session.

“We’re trying to prepare for what’s going to be a fiscal disaster otherwise,” Portman said.

Perhaps when their backs are against the wall in the lame-duck session, Republicans will give a little on tax increases and Democrats will give a little on reforming Social Security, Medicare and Medicaid to whittle down the national debt while shoring up the entitlement programs for the long term.However, interviews with Ohio’s two senators and eight of its House members revealed partisan differences a mile wide.

Almost all agreed that no option should be left off the table, but the question about whether both tax increases and spending cuts are needed exposed a reluctance to divert much from party lines.Republicans uniformly advocated deep spending cuts while favoring renewal of the so-called Bush tax cuts at year’s end, while Democrats generally favored extending them for everyone except wealthy Americans making $250,000 or more.

“You start out by letting them expire for the high-end earners, and you keep them intact for the middle class until we get out of the recovery period,” said Rep. Tim Ryan, a Youngstown Democrat.

“The people who have done very well in the last 10 years are the people making from $300,000 to $500,000 to $1 million a year, it has not been the broad middle class,” said Sen. Sherrod Brown, a Democrat. “I would not support a tax increase on the middle class now.” Republicans such as Rep. Mike Turner of Dayton opposed repealing the Bush tax cuts and said any increases in tax revenue should go directly toward reducing the $15.7 trillion national debt, not for more spending.

Turner said his meetings with constituents reveal no appetite for more spending: “By and large, there’s some support in every room I’m in for tax increases for paying down the national debt.”

There was general agreement in the Ohio delegation that the federal tax code needs a major overhaul which, if done right, could raise billions in new revenue by, among other things, closing loopholes exploited by some major corporations to avoid paying taxes.

“The point is, to have a fair tax code so that everybody pays taxes,” Portman said.

Equally as difficult as deciding how to raise more revenue are decisions about how to reduce the rate of spending for the massive entitlement programs — Social Security, Medicare and Medicaid. Republicans were more open than Democrats to cutting costs by changes such as subjecting eligibility to income testing, meaning wealthier Americans would receive reduced benefits, and raising retirement ages.

Jordan said increasing the Social Security retirement age “is going to have to happen,” but Democrats such as Rep. Marcy Kaptur of Toledo said that workers involved in hard physical labor “just can’t make it” to a retirement age of 70, for instance, “because their bodies are shot.”

Before the November election, politicians from both parties are avoiding the details of how they would cut spending and raise revenues, but House Speaker John Boehner of West Chester said negotiations must occur before the election to avoid a year-end debacle.

“I don’t underestimate the difficulty of coming to an agreement,” he told reporters on Thursday. “But let’s be honest: We know the end of the year is coming. And we know what’s going to happen. And if we don’t use this opportunity to increase the debt limit and make real changes in how we spend the American people’s money, we’re missing a golden opportunity.”

The fiscal cliff

Congress’ twin predilections to delay tackling difficult issues until after the next election and to wait until the last minute to address a crisis will come to a head at the end of this year when a host of budget issues converge. The crunch totals about $500 billion, or roughly 3.8 percent of the U.S. gross domestic product.

EXPIRING AT YEAR’S END:

• 2 percent payroll-tax cut (Social Security) — $125 billion a year

• So-called “Bush tax cuts” of 2001, 2003 and 2006 — $108 billion

• A patch to lessen the impact of the alternative minimum tax, affecting about 30 million taxpayers — $90 billion ($125 million if Bush tax cuts end)

• Net of about 80 other tax cuts — $79 billion

• Medicare physician reimbursement rates dropping about 27 percent — $29 billion

OTHER ISSUES:

• In late 2012 or early 2013, the federal government is expected to hit the $16.4 trillion debt limit, with worst-case possibilities of a government shutdown or default of U.S. fiscal obligations.

• The first $66 billion of $1.2 trillion in mandatory spending cuts to discretionary accounts (many in defense) over 10 years must be identified and approved.

• About $44 billion in extended unemployment benefits will be reduced once temporary benefits end on Jan. 2.
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