Voters Understand Fiscal Cliff

Reprinted from the Bipartisan Policy Institute

In failing to address the foolishness of present policy, candidates make a comprehensive response less likely.

Center Forward recently released the results of a poll taken by Purple Insights, asking 1,000 likely voters how much they knew about the “fiscal cliff,” the massive increases in taxes and cuts in spending scheduled to occur within the first two days of January 2013.

In short, as Purple Insights Research Division Director Doug Usher explained to a National Press Club audience, Americans know more about the looming fiscal cliff than perhaps political candidates realize. And, as subsequent remarks by panelist Josh Kraushaar, executive editor of National Journal “Hotline,” revealed, American voters know this despite a general lack of any discussion of the topic by candidates for federal office.

Kraushaar, who has covered politics for the last decade, noted that in most of the congressional and senatorial races that he was following, there was barely any mention of the fiscal cliff. The discussions that he attended largely revolved around the economy and jobs, as well as some local issues, but virtually no candidate outlined what the fiscal cliff was, and as important, what a solution to falling off the cliff might entail.

As we have written before, the presidential debates have certainly shed little if any light on concrete solutions to avoid the fiscal cliff. Last night’s debate once again veered away from any specific ideas to keep the American economy from taking a body blow in January that most serious analysts believe will lead to another recession. Warnings from Fed Chairman Ben Bernanke, International Monetary Fund Director Christine Lagarde, the World Bank, officials at the European Central Bank, and other policymakers seem to have had the half-life of about one news cycle.

If 50 percent of likely American voters have heard of the cliff, and a quarter have substantial knowledge about it, why have politicians avoided the subject like the plague?

Former Representative Bud Cramer is the head of Center Forward, and moderated the panel discussion that followed the release of the poll results. He and other former members of Congress in the audience noted the widespread reluctance on the part of current candidates and agreed on the reason: fear.

To really address not only the fiscal cliff, but the obvious coming crisis in America’s federal fiscal policy, compels hard looks at hard subjects—Medicare, Medicaid, other health programs, pension plans run by the federal government, and over $1 trillion of special tax breaks that now exist in the tax code. These subjects are widely believed to be toxic to any candidate who mentions them.

Worse, those centrist candidates who would be willing to discuss rational, comprehensive compromises to the challenge often lose in primaries to candidates who espouse the most polarized views. “No tax increases, ever.” Or, “no changes to Medicare, ever.” The facts that the present Medicare system is a promise that cannot be kept, and that the biggest beneficiaries of tax loopholes are upper income individuals, never emerge in debates.

So, while major comprehensive plans, such as those proposed by the Bipartisan Policy Center or the Simpson-Bowles commission, have received enormous public comment, and have been explained in congressional hearings for more than 18 months, most candidates for federal office never mention the subject.

Editor’s Note: Steve Bell is now a Visiting Scholar at the BiPartisan Policy Center and a consultant to financial firms. He was Staff Director of the Senate Budget Committee when the Reagan Revolution budget was enacted, was appointed by President Reagan to the Federal Retirement Thrift Investment Board and was a Managing Director of Salomon Brothers for 10 years.