A Mediator’s Guide to a Sequestration Alternative

A Mediator’s Guide to a Sequestration Alternative

iStockphoto/The Fiscal Times

OP ED:  Sequestration is a bad idea. It hurts business. It hurts people. It hurts government. It is also totally unnecessary.

Republicans and Democrats can agree about all of this, but there are clear differences between them that are keeping the two parties deadlocked as the clock ticks toward the March 1 deadline. It is embarrassing right now that a country as exceptional as ours can’t resolve our problems democratically and well.

Sometimes a mediator will put a proposal on the table, hoping the two warring parties will use it as a jumping-off point to resolution. The key to successful mediation is recognizing that often the most intractable problems hide common points of agreement. And in the case of sequestration, a mediator would immediately look for ways to satisfy not just the 53 percent of the electorate who voted for President Obama (and want to rebuild America), but also the 47 percent who supported GOP challenger Mitt Romney (for whom debt reduction is a top priority).

As someone who has spent years trying to forge agreements between opposing sides, I believe there is a clear way to resolve the sequestration mess and reconcile the competing interests of the electorate.

Both sides should be able to agree that whatever new income results from whatever new sources – closing tax loopholes, raising rates, reforming the tax code – it would be allocated as follows: 47 percent of it would come off the top to pay down the national debt, while 53 percent of it would go toward rebuilding America.

To keep both sides honest and to put an end to the seemingly endless debate in Washington, both sides would agree to uphold this agreement until the national debt decreases to, say, 70 percent of GDP – a win-win all around.

The two sides would further promise that we will be wise and learn from the histories of others. During the “rethinking the corporation” days, business taught us that you cannot starve yourself into profitability. You can only make money when you provide value at a reasonable price. Europe is also teaching us daily that severe steps toward austerity disrupt both the body politic and the economy for no positive end. So let's all promise to cut our expenses down to size wisely and smartly so that we provide value now and a strong future later.

As a first step, let’s make this effort quasi-apolitical. The Base Realignment and Closure Commission (BRAC) suggests a way to do just that. The BRAC is an independent nine-member panel appointed by the president that evaluates the necessity of military bases with the aim of disposing of the unnecessary. Its recommendations go to Congress, which has a 45-day opportunity to disapprove the entire list of recommendations. The procedure works. Let’s use it.

Let’s also create a Program Effectiveness and Alignment Commission (PEAC), modeled after the BRAC. Let's ask it to study one area after another and come back with recommendations that would realign government programs for maximum efficiency, effectiveness, and impact.

The president has suggested some changes he thinks would work for us all. Many members of Congress have as well. Let’s ask the PEAC to help us make sure that taxpayer-sponsored programs give us a return on their investment. Let’s give Congress 45 days to disapprove the PEAC’s recommendations as a whole, and let’s give the president the power to act on them.

All of this would, over time, make government tighter and, most important to us all, better.

As for the income side of the ledger, there are so many non-partisan ways to increase government income and decrease personal and corporate income inequality, but only if we build on the collaborative successes of the president and Congress to date. So let us promise we will build on the agreements they have forged.

Last year, the president and Congress agreed on a $400,000 tax parameter. Okay. Let’s cure some of Social Security’s ails by cutting the payroll tax to, say, 4 percent and raising the cap amount of income taxed to $400,000, while keeping benefits at their current level. Everyone should find some reason to buy in. After all, Republicans say they stand for lowering tax rates and the Democrats say they want everyone to pay their fair share. This allows both.

Want to get rid of corporate tax loopholes? Find a way for everyone to buy in. Yes, let’s get rid of the private jet deductions and the oil company deductions that Democrats bemoan. But while we’re at that, let’s also get rid of the green energy deductions that Republicans disparage.

Instead, let’s create grants to speed along corporate initiatives the future calls for. And let’s phase out special-interest corporate tax deductions over five years so that no markets or companies are upended. Let’s have an 80-percent deductible this year, a 60-percent deductible next year, and so on, until the market and companies make profits on their own – a bipartisan goal if there ever was one.

Being effective at governing should not be that hard. The United States lacks the credibility to help other countries make peace if our own political parties are at war for all to see. If everyone could keep only that in mind, we might find a way to have a great 2013.

Ava J. Abramowitz teaches negotiation at George Washington University Law School and is the author of The Architect's Essentials of Negotiation.