Christina Romer pleads for Boehner and McConnell to, for once in their lives, actually pull their weight and work for America:
Christina D. Romer: ON Jan. 1, more than $500 billion of tax increases and spending cuts are scheduled to happen automatically…. Let me offer some thoughts about… how the president and Congress could make progress. Cold-turkey deficit reduction would cause a significant recession… gross domestic product… to fall at a rate of 2.9 percent in the first half of 2013… this estimate is, if anything, too optimistic…. Going over the cliff would also be a poor way to deal with our long-run deficit problem….
DON’T KICK THE CAN DOWN THE ROAD Just as going permanently over the cliff isn’t the answer, neither is wimping out. Pre-emptively extending all of the Bush tax cuts for another year and postponing the spending cuts would be a mistake. The cliff is a unique opportunity to forge a genuinely bipartisan solution to our budget problems….
[G]oing over for a few weeks or even a few months wouldn’t be catastrophic. The Treasury has some discretion… going over the cliff temporarily is unlikely to unnerve bond markets.
SOME TAXES NEED TO RISE A brief fall off the cliff would free lawmakers from the straitjacket of having signed Grover Norquist’s pledge…. Once taxes have returned to their Clinton-era levels, a partial reinstatement of the Bush tax cuts would count as a tax cut. And a brief plunge would also show that the president is serious about raising additional revenue…. With a long-run budget as out of balance as ours, the only way to solve the problem while spreading the pain widely is to work along every possible margin. Democrats should be flexible, however, about the form of tax increases. If Republicans want to cut exemptions and loopholes more and raise marginal rates less, that should be on the table….
EMBRACE ENTITLEMENT REFORM…. It will be impossible to get our long-run deficit under control without slowing entitlement spending. Rather than fighting all changes to these programs, Democrats should work to preserve their core functions and protect the most vulnerable…. [N]eeding attention is Social Security Disability Insurance. It provides essential support for people unable to work, and will be even more important if we raise the Medicare eligibility age. But the current system is expensive and inefficient….
Because immediate severe austerity would be terrible for the economy and for unemployment, the president needs to gain support for including job-creation measures… focus on temporary infrastructure spending, which would create jobs today and leave us with something of lasting value…. Our infrastructure needs are so large that we shouldn’t be fighting over which to address first….
A child care book I read as a new mother encouraged parents not to dread nighttime feedings, but to embrace them as another chance to nurture their babies. We should view the fiscal cliff the same way — not as a disaster to be avoided, but an opportunity to be embraced. It’s a chance for Congress and our re-elected president to nurture the economy and to protect the future of all Americans.
