How well will President Obama and the new GOP-controlled Congress get along?
The smart bet, of course, is to have low expectations. After all, past dismal performance is likely indicative of future disheartening results. A Pew Research survey finds that 60 percent of each party's hardcore base thinks "compromise" means getting more of what it wants. Hardly a recipe for bipartisan action. Don't expect an Obama pivot to the center. Don't plan on a Republican détente with the president. Rather, expect an unsatisfying mishmash of executive orders, legislative vetoes, and congressional investigations with little substantive progress on the big challenges facing America.
That's too bad. With the economy stuck in low gear, middle-class incomes stagnant, and a deluge of entitlement-program debt approaching, America needs action.
But just because another two years of unproductive trench warfare is the most likely result doesn't mean all hope should be abandoned. It's really not too hard to imagine all sorts of deals Democrats and Republicans could reach if they have a mind to.
1. Creating jobs. The share of Americans with any kind of job is barely above Great Recession lows. So why not work together to create good-paying jobs through both the public investment Democrats want and the business tax reform Republicans want? According to a recent proposal by the Third Way think tank, Democrats would get to boost spending on public investments — including infrastructure and worker-training programs — by $400 billion over ten years, creating jobs on all these projects. And Republicans would get to cut the uncompetitive U.S. corporate tax rate — the highest among advanced economies — to 31 percent from 35 percent, allowing businesses to hire more freely.
Of course, spending and tax cutting is easy work until you have to pay for it. Democrats would have to find savings in mandatory spending programs such as Medicare payments and agricultural subsidies, while Republicans would have limit itemized deductions to $50,000 for couples making over $250,000.
2. Improving working-class incomes. Obama wants to raise the federal minimum wage from $7.25 an hour to $10.10. Republicans don't want to raise it all, viewing it as a job killer. So why not split the difference and raise it to $8.50 an hour (roughly matching its 1968 level adjusted for inflation, according to economist Scott Winship)? You could even index it for inflation from that level going forward. And expand the Earned Income Tax Credit for low-income workers.
At the same time, Democrats would have to accept pro-work reform of the Social Security disability program. Participation has been on the upswing for decades thanks to congressional tweaks that relaxed screening criteria, enabling more workers to qualify. Letting SSDI recipients of prime working age keep some of their benefits if they find a job may help nudge them back into the labor force. And greater effort to help the long-term jobless through relocation subsidies or work-share programs could reduce the incentive to seek the SSDI option.
3. An energy deal. Obama could finally approve the Keystone XL pipeline to bring Canadian crude oil to refineries on the American Gulf Coast. It would solidify America's energy partnership with Canada and create thousands of high-wage manufacturing and construction jobs. And the carbon emissions from that oil are trivial in the big picture. In return, the GOP could approve more funding for basic clean energy research, everything from solar to wind to nuclear fission and fusion.
These are just a few possible areas of agreement among many, including Social Security, family tax relief, prison reform, and even some fixes to ObamaCare.
So c'mon, Washington: Stop sucking and surprise us!
