The following editorial appeared recently in the San Jose Mercury News on Jan. 3:
If anyone doubted that disaster loomed at the base of the fiscal cliff, the markets erased it Wednesday morning with a surge — irrationally exuberant for sure, since big problems still teeter, but we won't complain.
The deal approved at the eleventh hour resolved, barely, a crisis Congress created when it failed to reach a compromise on raising the debt ceiling more than a year ago. The solution at the time was to set in place drastic spending cuts and other doomsday strategies that would kick in if no further action was taken.
This week's compromise just covered the basics. It returned income taxes to Clinton-era levels for the top 2 percent of Americans while preserving the Bush tax cuts for the rest, and it averted some of the most damaging spending cuts that even the Congressional Budget Office said would plunge the nation back into recession.
It was heartening to see President Barack Obama not give too much ground on taxes, since raising them on the wealthy was a campaign theme.
His original threshold of $250,000 income made more sense than the $450,000 in the deal, but that's how compromise works. House Republicans wanted no taxes to go up.
In negotiations on health care reform and other first-term showdowns, Obama has given up much and gotten next to nothing in return. Re-election seems to have bolstered his resolve.
It was also heartening to see that a majority in the House could accept any compromise at all on tax and spending. But even this deal was vigorously opposed by some GOP leaders, who already are looking to the next debt ceiling vote as an opportunity to reclaim ground.
Forcing the nation into default on its debts would be a disaster, since, unlike the fiscal cliff, it can't be fixed retroactively. Just threatening to do it last time caused a setback for the recovering economy.2 comments on this story
One of the most important accomplishments of this deal was averting a 27 percent cut in Medicare compensation that in effect would have eliminated the program for many seniors as large numbers of doctors bailed on the system. It's astonishing that this was even on the table. Support for Medicare and Social Security crosses party lines, and while changes are needed to keep the programs stable, whacking physician fees is no answer.
A rational sequel to the cliff ordeal would be a serious initiative for tax reform, which is needed both to stabilize government and to stimulate economic growth, as well as further plans to curb the deficit.
And while it would be crazy to expect this all to be worked out in a few months, it's not too much to ask that the work begin now, and that it involve more than posturing.
The tougher debt ceiling fight comes up in February — and Americans don't want this cliff nonsense to happen again.