Why Not Head Over the Cliff and Dive into the Abyss?

Why Not Head Over the Cliff and Dive into the Abyss?

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Should America put the country in 4th gear and simply drive over the fiscal cliff?  The Washington Post’s Suzy Khimm says that’s one way to solvegovernment gridlock. With talk of GOP senators planning to block sequester solutions during the lame duck session, there may be reason to call lawmakers’ bluff.

Former Reagan policy advisor Bruce Bartlett, in a blog for The New York Times, says Congress should allow the fiscal cliff to occur as scheduled then enact a fix retroactively, an idea supported by Peter Orszag, former director of the Office of Management and Budget, and William Gale, economist at the Brookings Institution.

The idea is based on the likelihood that the divided Congress won’t be able to reach an effective deal during the lame duck session. So, rather than pass a make-shift deficit reduction package going over the fiscal cliff and letting the spending cuts and tax increases happen so Congress can vote to restore some, but not all, the next session could lead to a long-term deal.

“Once taxes have risen on everyone, legislation restoring the status quo ante for all except the wealthy would be scored as a tax cut. While doing this before Dec. 31 would be a violation of the pledge, doing so after Jan. 1 would not,” Bartlett points out. “My advice to President Obama: have your staff prepare an alternative to the fiscal cliff that can be sent to Congress as soon as it reconvenes this year, prepare for Republicans to reject it and then hope to negotiate something that can be enacted as soon as possible in the next Congress.”

However, not everyone sees it that way. Khimm reports that “fiscal cliff hawks” are still insistent that going over the cliff will produce devastating consequences and are urging lawmakers to strike a deal as quickly as possible. Among those that are set on coming up with a long-term deal over the lame duck session is Majority Leader Harry Reid, who has said he will not be satisfied with a short-term plan and “doesn’t believe we are going over the fiscal cliff,” as he told Bloomberg.  

 Reports circulated yesterday that a bipartisan group of senators, concerned about meeting the Dec 31 deadline, are assembling a three-part proposal to deal with the fiscal cliff before the major automatic cuts take place at the beginning of next year.

Brianna Ehley is the former Washington Correspondent for The Fiscal Times. She is currently a reporter on Politico's health care team in Washington, D.C.