With President Obama and House Republicans claiming dueling mandates from the election, it is hard to see how the two sides will reach a deal averting the looming “fiscal cliff” (“Uneasy fix to ‘fiscal cliff’ in works,” Web, Sunday). Constraining tax rates and spending is insufficient; our leaders need to think outside the box to strike a deal and save the economy.
The GOP wants to stop $55 billion in defense cuts, while the Democrats want to stop $55 billion in domestic cuts, but we need to cut spending, period. Thus, the cuts to both programs should be sliced in half, leading to a more manageable $28 billion in reductions.
Next, Mr. Obama should accept an extension of all George W. Bush-era tax rates, including those for the wealthiest Americans, giving both sides a full year to pass meaningful tax reform. After getting their way on this issue, Republicans should agree to a framework on immigration reform in which illegal immigrants who have been here 10 years or more qualify for legal-resident status and their children can get citizenship in exchange for military service while we simultaneously secure the border. Passing this comprehensive bill would get the GOP a big win on taxes while Mr. Obama could claim victory on immigration reform.
It also would be a small down payment on the deficit through realistic spending cuts, and it could save the U.S. economy in the process. This would give Congress and the president all of 2013 to achieve meaningful entitlement reform and the tax code.