Editorial: Just intermission in Congress' fiscal drama
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In averting a long drop off the "fiscal cliff," Congress did just enough this week to avoid stifling the nation's economic recovery. But it did almost nothing to put the federal government's finances on a sustainable course.
This management by crisis -- with the economy or the nation's credit rating held hostage until the White House and Republicans cut some backroom deal -- hasn't worked. It has to stop. President Barack Obama should see that it does by sending detailed bills to Congress to reform the income tax code and restrain spending on Medicare and Medicaid. He should do it soon.
That's the best way to jump-start the serious conversation the nation must have about what needs to be done and why. The government can't go on taxing at historic lows while spending at historic highs. The inevitable result is a flood of red ink.
The hard truth is that unless we're willing to raise taxes to ruinous levels or gut entitlement programs and the military, which together account for $6 of every $10 the federal government spends, taxpayers are going to have to both pay a little more and get a little less.
What the fiscal-cliff deal delivered is not nothing. It ended years of controversy over the fate of the Bush tax cuts and permanently fixed the alternative minimum tax, sparing middle-income filers the specter of higher taxes every year. It ended uncertainty about taxes on estates, capital gains and dividends, and extended tax credits for child care and tuition. And it ensured that unemployment checks won't stop for 3 million jobless Americans.
Doing those things, and also postponing $120 billion in indiscriminate spending cuts slated for Jan. 1, spared the economy a jolt that economists said would have set off a recession. But the deal won't end Washington's fiscal follies. The stage is set for more.
By Feb. 28, Congress has to raise the debt ceiling so it can pay the nation's bills. Republicans have promised a repeat of 2011, when they refused to act unless Democrats agreed to spending cuts. It was an irresponsible threat to the good faith and credit of the United States and shouldn't be repeated.
Then on March 27, the continuing resolution that provides spending authority to keep the government operating will expire. And in April the spending cuts postponed this week are due to take effect.
Congress should stop lurching from crisis to crisis and enact entitlement reform, as well as tax reform that cuts rates, but raises revenue by closing loopholes and limiting deductions.
Those are the things that matter.