The oft-cited internal mantra of Bill Clinton’s 1992 presidential campaign was, “It’s the economy, stupid.” Today, it might be, “It’s the stupid lack of clarity.”
The muddled signals coming from Washington are making it harder for employers to plan for the future. They don’t know what will happen with health care. They don’t know what the tax laws or regulations will look like after next November. They don’t know how Congress will reduce the deficit, or when, or how it will affect them.
Washington is now a government by continuing resolution, lurching from deadline to deadline, debt ceiling to debt ceiling. In case you didn’t notice, the federal government came within a day or so of shutting down a couple of weekends ago.
Notice I use the word “clarity” and not “certainty,” a term coming out of Washington lately. “Certainty” is not a luxury available to any of us who live in a free market economy, and thank goodness. Uncertainty is part of what drives us to take risks, innovate and live freely. Now that we’re entering an election year, we can be certain of at least this: Washington soon will stop working until early 2013. Unfortunately, the major problems that exist today will still exist then, and it’s unclear if elected officials will do anything about them or when they will even really try. One of the latest intractable issues is extending a cut in the payroll taxes that fund Social Security. There’s general agreement in Washington that the cut should last throughout 2012; the question is how to pay for it without passing the buck to our children and grandchildren as usual.
On Dec. 17, the Senate voted to extend the cut, at that point set to expire Jan. 1, by two months and then left town for Christmas. That was a compromise in hopes of buying time until after the holidays. The House at first refused to approve the bill but finally signed off when it became obvious the Senate wasn’t returning to town.
Independent reporting for Pine Bluff & Jefferson County since 1879.
The House was right to have concerns. Two months doesn’t tell any of us, including employers, anything. Higher or lower, we need to know what our taxes are going to be throughout 2012. Moreover, the $37.5 billion it will cost to fund two months’ worth of payroll tax cuts basically will be paid by 10 years’ worth of higher fees passed down to borrowers who buy or refinance homes in deals involving Fannie Mae or Freddie Mac and from those who obtain loans through the Federal Housing Administration. And it’s not just in the areas of taxes and debt that Washington has the country wondering what’s coming next. Congress is four years late reauthorizing the legislation creating No Child Left Behind, leaving educators without a clear understanding of what the government will expect of them. Lawmakers are more than two years late reauthorizing the country’s long-term surface transportation bill, usually a five- or six-year appropriation. Instead, highways and bridges are being funded by short-term extensions, making it harder for highway departments to plan major projects that take years to complete. The nation’s aviation system has been funded by extensions since 2007, causing the same problems.
It doesn’t have to be this way. We’ve had divided government before, most notably during most of Clinton’s presidency. There were times when he and Republicans worked reasonably well together — one of many reasons the economy was much stronger then than it is now.
Now the political system seems incapable of solving problems, and voters are getting into a habit of bouncing between Democrats and Republicans every two years, which isn’t helping.
A little clarity would be nice. Currently, all we have is the certainty of all partisan politics, all the time. And, unfortunately, it’s clear what that brings.
• • •
Steve Brawner is an independent journalist in Arkansas.