U.S. congressional Democrats and Republicans remain far apart on a solution to the country’s impending ‘Fiscal Cliff’ experts said at a policy summit hosted by Washington, D.C.-based magazine National Journal on Oct. 16. Panelists at the summit included members of Congress, former federal officials, industry insiders, and business leaders.
“We need to make some decisions by end-of-year,” said House of Representatives Budget Committee vice ranking member Allyson Schwartz (D-Pa.). “Republicans need to agree to some new revenue [along with spending cuts] for any proposal to be revenue neutral… we can’t start a debate if faced with rigid ideology.”
“It’s a false premise that Republicans say we don’t need new revenue,” said Republican chief deputy whip Rep. Peter Roskam (R-Ill.). “We just believe it needs to come through growth, not an increase in taxes.”
When asked about what things Democrats and Republicans agreed on, Schwartz cited the need to cut taxes for the middle class, alterations in the Medicare formula, and the need to eliminate unnecessary government expenditures.
Schwartz and Roskam both agreed that the November elections will be a deciding factor in how the U.S. solves the Fiscal Cliff.
The next panel contained a selection of tax experts discussing what measures are needed to spur the economy. The panel agreed that a hybrid approach of broadening the tax base, cutting some loopholes, and raising some revenues would be needed. The panel also agreed that any reform has to apply to corporate and individual rates, and the two cannot be uncoupled for each other as much of the current political rhetoric supports.
The final panel consisted of Douglas Holtz-Eakin, former director of the Congressional Budget Office, and Stephen Bailey, former Capitol Hill staffer for the Senate Budget Committee. The two discussed the challenges to solving the issues presented by the Fiscal Cliff, and the scenarios they thought could emerge following the November election. Both were skeptical of Congress’ ability and desire to solve the issue.
“In 1986, the last time the tax code was rewritten, committees were used to making big deals, now something like that would overwhelm them,” Bailey said.
“[Congress] is likely to kick the can down the road,” said Ekin. “But they have to get a deal in 2013 between January and August before Congress starts the 2014 campaign season… we are out of time.”