The GOP and the Fiscal Cliff

Here is a crazy and bold prediction: à la the 1994 government shutdown, no matter what happens with regard to the "fiscal cliff", the GOP will get the blame. Just as the right was fingered as the culprit for the housing bust even while they were sounding the alarm about the need for more regulation of Fannie Mae and Freddie Mac, so too they will be blamed for any detrimental effects of the fiscal cliff. Republican options for dealing with this issue include:

• stay true to their values and pledges of smaller government and lower taxes;
• put forth reasonable solutions such as the Ryan Plan;
• agree to return to the full panoply of the Clinton era taxes;
• put forward the Simpson/Bowles plan as a compromise;
• just vote "present" and let the Dems march forward unresisted;
• leave DC and hole up at the Best Western Clock Tower Resort in Rockford, Illinois;

But, it doesn't matter what the GOP does short of registering as Democrats and feeding grapes to Nancy Pelosi, they will be castigated by the Dominant Liberal Establishment Mass Media (DLEMM) and those on the left as obstructionist and intransigent.

And this will happen even though the left boldly proclaims their intransigence on a daily basis:

• Before the election, Harry Reid said, "Mitt Romney's fantasy that Senate Democrats will work with him to pass his 'severely conservative' agenda is laughable."
• Harkin and Rockefeller asked Obama to "reject changes to Medicare, Medicaid and Social Security that would cut benefits"
• The Congressional Progressive Caucus said that entitlements are off the table
• Durbin, the Senate Majority Whip, said in a speech that under no circumstance would there be any entitlement reform.  
• Krugman says, "Mr. Obama should hang tough, declaring himself willing, if necessary, to hold his ground even at the cost of letting his opponents inflict damage on a still shaky economy. And this is definitely no time to negotiate a 'grand bargain' on the budget that snatches defeat from the jaws of victory. So stand your ground, Mr. President, and don't give in to threats. No deal is better than a bad deal."
• A pundit opines, "The president can win, without doing anything. He does not have to give an inch. Not an inch!"

Are these the voices of bipartisanship and compromise?  

The left sets up a situation where "negotiation" means something like 'You can choose any color you like as long as it is blue," and then accuses the right of stonewalling if they desire any color other than the shade of blue that the Dems are promoting. They are all for compromise so long as it is the GOP that does the compromising.

However, If the GOP compromises here - and by compromise I mean choosing the preselected, preauthorized positions of the left that are not open to compromise - they will just be yielding more ground to the all-encompassing entitlement state and will be part of the problem.  They will fix nothing and only slightly mitigate the slowing economy, higher taxes on everyone and increased debt. But worst of all, if there is even a trace of GOP DNA on the deal - GOP good intentions notwithstanding - the DLEMM and the left will pin all negative outcomes on the right and the GOP will bear the political consequences of failed policies no matter who authored them (e.g., housing bubble).

Since most agree that we are approaching the cliff at a high rate of speed, the GOP should let the left own the 'solution'. Many on the right argue against this because of the inevitable destruction resulting from leftist policies. But since our Thelma and Louise moment is nigh, will nudging the wheel so that we enter the atmosphere at an angle somewhat less than 90 degrees change the outcome? Will insisting that the windows remain rolled up before we sail off the cliff make the car any more drivable once we reacquaint ourselves with terra firma?

How could the GOP let the Dems own the solution? First, the GOP should set forth details about what they would do if they had control of all three branches. Second, they should propose Obama's own budget and tax plan with a nice acronym like AIRBORN, or FORWARD and vote "present". Lastly, the GOP should then let the Dems propose anything they like and vote "present".

The first move would establish a benchmark.

The second would, as much as possible, remove the ability of the DLEMM and the left (but I repeat myself) to blame and demagogue the right's attempts to inject sanity. And there is little likelihood of passage since Obama's plans have gone down in flames before. 

The last move would allow the Dems to wholly own the solution by letting them propose solutions without resistance. By removing the resistance, the Democrats would be forced to realistically deal with their own proposals. It is very likely that without a great Satan to battle against, the Dems would self-moderate rather than relying on the GOP to provide the moderation for them (as well as a scapegoat) and come to rest on something like Simpson/Bowles. A self moderated outcome may share many aspects with the Republican benchmark and the GOP could enjoy an 'I told you so' moment. But even if the Dems don't moderate their extreme positions, by voting "present" on anything the Dems propose the right gets absolution - not from the DLEMM or the left, but from their base and their conscience.

GOP moderation and compromise only serves to prolong the inevitable. Just as Democrats often stand in opposition to and protest against economic reality, we may be at the point where Republicans are standing in defiance of Schumpeter's reality, and they should, if reluctantly, step aside and allow creative destruction to do its work.