WASHINGTON — Congress doesn’t “have the stomach” to achieve a large-scale compromise on the fiscal cliff and the nation’s debt problem in the near-term, no matter who wins the election, a leading bipartisan expert says.
While plans to resolve the deficit have taken center stage during the presidential campaign, prospects for a “grand bargain” that would actually enact legislation are probably pipe dreams, according to Steve Bell, senior director of the Bipartisan Policy Center’s Economic Policy Project.
Unless the U.S. actually goes over the fiscal cliff, Congress agreeing on a large-scale compromise isn’t likely, in Bell’s view. “It’s too much, they just don’t have the stomach for cutting and changing these programs in such a way that we do really do change the debt trajectory in this country,” he said.
When the dust settles from this year’s presidential election, Congress will be left with the enormous task of addressing the U.S. deficit before automatic tax hikes and spending cuts kick in on Jan. 2. But with an inability between Republicans and Democrats to compromise, the lame duck session may become a bit of a nail-biter.
Bell says that many in Washington and on Wall Street remain optimistic that a resolution will come at the last minute, like it did during the debt crises debacle of 2011. “They assume that we’ll make some sort of messy deal and get by fiscal cliff, I’m not as confident as those people are.”
Whether or not they believe that the cliff will be avoided, most experts agree that the lame duck session simply does not leave enough time to enact legislation that will actually provide the savings the country needs, about $4 trillion over the next 10 years.
Instead, what many are expecting is some form of a stopgap. This approach will avert the fiscal cliff by compromising on a so-called “down payment” that will allow the country to marginally reduce the deficit in 2013 and put in place hard deadlines that will require the 113th Congress to act definitively to reduce the deficit in the long-term.
“We’ll probably see the can kicked down the road again,” said Bill Frenzel a former congressman who served as the ranking minority on the House Budget Committee. Frenzel added that tax reform alone, a significant factor in creating revenue, will probably take around nine months. ““There’s not enough time in the lame duck, then you have to push it over into 2013,” he said.
Reduction of the deficit is complicated by the lack of compromise between Republicans and Democrats and perhaps more surprisingly by the lack of cohesion between the House and Senate factions within parties, Bell said.
In a recent report, the Bipartisan Policy Center suggests that the 112th Congress create a $100 billion down payment on the deficit, accept an accelerated process for a proposed debt package, set hard deadlines for the 113th Congress to create a debt reduction package and impose a “legislative backstop”, which will go into effect if Congress fails to act in 2013.
The proposed framework is meant to compel the 113th Congress to act, but even if it is accepted, it does not guarantee that meaningful reform will get passed. “You need something that is really, obviously painful to force these guys to act,” said Bell.