Robert Bennett: Ideological rigidity can be overcome

Published: Monday, Jan. 7 2013 12:00 a.m. MST

Congressmen walk down the steps of the House of Representatives at the Capitol as rank and file members adjourned for several days, in Washington,Wednesday, Dec. 5, 2012.

J. Scott Applewhite, ASSOCIATED PRESS

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We have survived the fiscal cliff, at least for now, through a deal made at the last possible moment. In answer to the question, "Who won?" as a result of what happened, I would suggest, for starters, a man who is no longer a Washigton player — George W. Bush.

When he took office, President Bush was able to cut tax rates across the board because Republicans controlled an arcane legislative process called "reconciliation." It cannot be fillibustered but automatically expires after 10 years. Republican campaigners subsequently pledged to "make the Bush tax cuts permanent," but they never had enough votes to do it. After President Obama was elected, it looked as if that dream would not be fulfilled.

But now, most of it has been. President Obama and a large majority of Democrats in both houses agreed to keep tax rates where they are in every bracket except the top one. For more than 90 percent of all income tax filers, the "Bush tax cuts" are permanently in place. Instead of being at the mercy of the calendar, it will take an act of Congress to change them. That's a Bush win.

The same is true with respect to the estate tax. Republicans have long insisted that the "death tax," as they call it, is not only unfair but detrimental to economic growth because death is not an economic event. If it comes at the wrong time, it can force the sale of a farm or business when the market for such a sale does not exist. This often results in the liquidation of the business altogether, destroying jobs. Republican leaders used reconciliation to change estate taxes as well.

Even though those taxes yield relatively little in the way of federal revenue — truly large estates are hedged and organized in trusts in ways that bypass them — Democrats objected on grounds of "fairness." President Obama said the issue was not revenue but wealth redistribution and vowed not to let the Bush rates survive past Dec. 31, 2012.

Once again, the details of the fiscal cliff deal are more Bush than Obama. Republicans got far more from the president and a Democratic Senate than they could have done with a free-standing bill. Estates under $5 million for an individual and $10 million for a couple are tax-exempt. The top rate on amounts above those totals will be 40 percent, not 55 percent as it was pre-Bush. Even though he is back in Texas, the former president had a pretty good day.

In Washington, two other names have emerged as winners — Republican Senate Leader Mitch McConnell and Vice President Joe Biden. They stayed on the sidelines while negotiations between President Obama and Speaker Boehner went nowhere, but with less than 35 hours before the cliff deadline was to occur, McConnell called Biden to ask, "Does anybody down there know how to make a deal?" These two old pros got together and worked things out in a matter of hours, which they then sold to their respective caucuses. In the Senate, where they are both well known and highly regarded, there were only eight votes against them.

The deal is far from perfect. A fiscal crisis has only been postponed, because our long-term problems still have not been addresssed, let alone solved, and a new cliff is facing us in the spring. However, the history of this one suggests that ideological rigidity can be overcome by those who are willing and experienced enough to know how to make a deal. It is past time for those skills to re-emerge as the norm in Washington.

Robert Bennett, former U.S. senator from Utah, is a part-time teacher, researcher and lecturer at the University of Utah's Hinckley Institute of Politics.

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