Attacks on the paltry fiscal cliff deal have overwhelmingly assigned blame to a weak-willed Congress that has ignored the apparently easy solutions to our nation's debt problem. This misconception, unfortunately, offers little in explaining why Congress conveniently ignored such seemingly obvious solutions. Be wary of young experts who deride the deal's tax-heavy nature or rant that it should have focused on entitlements such complains are overly idealistic and fail to understand the difficultly of Capitol Hill policymaking.
Tax increases outweigh the spending cuts in the fiscal cliff deal, more commonly known as the American Taxpayer Relief Act of 2012. However, harangues against the specifics of the deal reveal naive conceptions of the realities of Washington. Attacking the deal for simply being too small is overly simplistic and serves little educational purpose. Tax hikes far outweighed spending cuts because President Barack Obama had all the leverage in the negotiations. Obama secured $600 billion in revenue increases, as he famously put it, "for free." The fiscal cliff itself afforded him a unique bargaining position. As such, it makes perfect sense that the deal was slanted toward tax increases. In fact, many liberals whined that Obama caved too much by allowing his baseline of what constituted a top earner to rise in the final days of negotiations.
The relatively small size of the deal cannot be explained by Congress's laziness or its collective inability to understand the solutions that the situation demanded. Armchair prognosticators frequently complain that Congressional or presidential initiatives fail because they often avoid the so-called "difficult" solution. This analysis ignores the strength of institutional constraints against deal making. The 112th Congress is a particularly depressing example it is the most polarized legislative body in our nation's history. Political scientists Keith Poole and Howard Rosenthal devised the "DW-NOMINATE" system, which tracks roll call votes and then plots Congress members on two axes, one for social issues and one for economic issues. The distance between each party's average score represents the degree of Congressional polarization. These means have been steadily growing apart for some time now not symmetrically, as the Republicans have moved relatively further to the right and the 112th Congress represents our most partisan legislative body yet.
What does this mean in practical terms? There is no longer a political middle in Congress. Historically, some Republicans have been more liberal on this scale than the most conservative Democrat and vice versa but no longer. This stark polarization means that bipartisan deal making may increasingly become a relic of the past as party polarization continues to grow. For example, the 2010 national elections saw the Democratic caucus lose many Blue Dog Democrats, long a fixture of bipartisan deals. This polarization magnifies already perverse electoral incentives the House Republicans say they were elected to rein in spending and keep taxes low, while Obama says the opposite. The result is the weak fiscal cliff deal that everyone should have seen coming.
Finally, the deal failed to address entitlement spending because no politician wants to touch this massive problem. Remember November's election, in which both sides made protecting Medicare a pet issue. The AARP is a political juggernaut on the same scale as the American Israel Public Affairs Committee or the National Rifle Association. Social Security is a relatively small driver of our national debt, but reforming it will be a Sisyphean task for much the same reason. Cutting Medicaid is a no-no for the Obama administration, especially after the Obamacare provision was shot down in the Supreme Court. As a result, you have our current spending debate: asinine comments about increasing government efficiency Big Bird, anyone? and targeting pork when the real culprit is a politically untouchable program.
College students should, indeed, look toward the future. We do not want to repeat the mistakes of our boomer parents, who mortgaged away our future to pay for their present. But any practical attempt to protect the future must be well aware of the difficult realities of our current political climate. We should work to understand why the fiscal cliff deal became a failure, rather than naively attacking it for being one.
