UPDATE: BPC’s Framework for a Grand Bargain to Avoid the ‘Fiscal Cliff’ (October 18, 2012)
With public discussion of a possible “framework” for a congressional compromise to avoid the “fiscal cliff” now widespread, it may be helpful to look at a specific proposal that the Bipartisan Policy Center’s (BPC) Economic Policy Project has shared with members of Congress during the past six months.
In testimony before the Senate Finance Committee, BPC Senior Fellow Senator Pete Domenici and his Debt Reduction Task Force co-chair Alice Rivlin outlined a general plan that would enable the lame duck Congress to not only avoid the fiscal cliff, but to provide an “accelerated regular order” that could permit the 113th Congress to actually develop a fiscal “grand bargain.” Domenici expanded on the idea in his recent testimony at a forum on the debt sponsored jointly by the Center for Strategic and International Studies, the Concord Coalition and BPC. BPC staff, working closely with Senate and House staff, has proposed the following procedure:
The 112th lame duck Congress would pass a bill, that would become law with the President’s signature; That law would have four major elements:
- Put off the so-called fiscal cliff for six months (delaying expiration of the tax cuts, expansion of the Alternative Minimum Tax, imposition of a 27-percent decrease to Medicare provider payments and the cuts from sequestration, etc.), and include real cuts in spending and increases in taxes as a “down payment.”
- Require the various committees of the Congress to change legislation within their jurisdictions in order to produce a fiscal agreement that would reduce projected federal debt by a specified amount.
- Allow the 113th Congress to avoid filibuster on the Senate floor for deficit reduction legislation that meets the specifications set out by the lame duck law.
- Most critically, install a backstop that would automatically become law if the 113th Congress failed to act and pass legislation in accordance with steps #2 and 3.
Passage of such legislation would require 60 votes on the Senate floor during the lame duck. It would push off the austerity posed by the fiscal cliff, but still give assurance to members of Congress that a reduction in projected federal debt will actually become law even in the absence of congressional action next year.
While one recent commentary said that such an accelerated regular order in and of itself was insufficient to solve our problem, the author failed to note that without an expedited process, the Senate filibuster rule would make passage of any major fiscal plan much more difficult. Indeed, the difference between an expedited process as outlined above and “regular order” on the Senate floor can be compared to “The sun is going to come up tomorrow like it always does, but it is going to come up in the West instead of the East.” It makes all the difference in the world.
The BPC proposal is one of several that have been floated since the beginning of this year. The House passed a version drafted by Ways and Means Committee Chairman Dave Camp and many other groups and individuals have talked generally about maneuvers to avoid the fiscal cliff. The “Gang of Six” and others, such as Sens. Lamar Alexander and Michael Bennet, have been exploring versions. Senate Budget Committee Chairman Sen. Kent Conrad discussed the need for legislation that would avoid the fiscal cliff, but also put real pressure on Congress to pass a major plan next year.
Congressional negotiations continue on how to handle the fiscal cliff and a procedure that would allow for a major fiscal plan next year. One of the biggest questions remains: What would the grand bargain look like? As Senate Majority Leader Harry Reid said late last year, when he sees actual legislative language, instead of broad general principles, then he will act.
Congress can develop a process, such as BPC has suggested. If Leader Reid were given legislative language, and the lame duck included that language in the bill outlined above, then policymakers would truly have given the nation a wonderful Christmas present.