Obama And Lawmakers' Confidence About Avoiding Cliff Isn't Universal
As President Obama and congressional leaders started negotiations Friday to find a way to avoid the nation's going over the fiscal cliff, it was fairly plain that even some of those who are wisest in the ways of Washington couldn't agree on whether policymakers would actually be able to prevent the federal government from becoming a cliff diver.
That confusion over what might happen come the end of the year was readily apparent during a lengthy series of panel discussions held at the Newseum in Washington and hosted by the Peter G. Peterson Foundation.
Alan Simpson and Erskine Bowles, of the commission known by their names and whose federal deficit and debt-reduction plan of late 2010 went nowhere, illustrated the split. Bowles called it a "magic moment" with several factors coming together to force the political leaders to compromise.
"A couple of years ago, you were the guy who said we were going to go over the cliff and I said 'no,' " said Simpson, the former U.S. senator from Wyoming, to Bowles. "Now I think they will go over the cliff. Erskine holds out for a 30 percent chance [of going over]."
"I think we can't be stupid enough to do it," said Bowles, who was a Clinton White House chief of staff and later president of the University of North Carolina. "We can resolve this problem now by making some very tough but doable compromises."
A later panel included, among others, Alice Rivlin, a Democrat who was director of the Clinton-era Office of Management and Budget, and Douglas Holtz-Eakin, a Republican who was the head of the Congressional Budget Office. It should be said that both Rivlin and Holtz-Eakin were among those who thought an agreement likely.
For the record, all of the elected leaders at Friday's White House meeting projected optimism after their get-together.
"I believe that we can do this and avert this fiscal cliff," Speaker John Boehner, R-Ohio, said, a comment that reflected the spirit of statements issued by Obama and the other lawmakers.
While the experts at the Newseum forum didn't agree on whether the fiscal cliff could be avoided, they generally agreed that there was not enough time before the end of the year to resolve all the complex tax and spending issues that needed to be dealt with.
The consensus was that while a blueprint could be reached before the deadline, the hard work of ironing out the details of reforming the tax code and entitlements would need to be conducted over ensuing months if not longer.
"It's going to take some time to get the consensus that we all want on spending and on the taxes, but it's not going to be January 2013," said former Federal Reserve Board Chairman Paul Volcker. "It's going to be 2014, 2015 before that gets put in place.
"And it should," Volcker added. "It's not easy to change this tax thing, where you say, 'Let's get rid of some deductions and loopholes and so forth.' All those loopholes and deductions are there because people want them there. We ought to get rid of a lot of them. But that's a big debate."
The realization that it will take time to work out the details — far more than the negotiators have before the large automatic federal spending cuts and tax increases begin going into effect at the start of next year if no agreement is reached — had some policymakers seeking to buy more time.
Ohio Republican Sen. Rob Portman, in an interview with Bloomberg TV, suggested, for instance, that the White House and Congress extend the Bush-era tax cuts — scheduled to lapse at the end of the year — for an additional six months to give negotiators more time to hammer out details.
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