Members of Congress are either putting on a good show, lulling voters into a false sense of security, or they have come to the realization that they must start solving the difficult issues facing the country. If it's the later, there is an excellent chance we will see a bipartisan bill addressing the deficit this year. Could this be followed by real changes to the tax code?
I believe there is consensus that the GOP needs to change their image. Whether this is more a sequence of media events or actual adjustments to positions on the issues is something members of the party are currently discussing. For the sake of argument, let’s assume a shift away from the extreme is underway and what we are witnessing will produce a return to bipartisanship and results.
The final major act of the 112th Congress was to pass a deal averting the fiscal cliff. This was followed by the new Congress acting quickly to prevent default, extending the debt ceiling for three months. Republicans gave in on these I believe not so much because they felt defeated, but because they wanted time to plan. They needed to decide where to focus their energy. The fights the GOP chooses to wage now will determine election results in 2014 and 2016.
The first decision was to call out the Senate on the need for a budget resolution. Democratic leaders in the Senate quickly responded, agreeing to the demand. This is what allowed the debt-ceiling plan to succeed. Next up was filibuster reform. No one knew how this issue would be resolved except that Senate majority leader Harry Reid (D-Nev.) had made this a priority and threatened to use the nuclear option to get it done. Minority leader Mitch McConnell (R-Ky.), apparently moving away from his strong partisan stance of the past four years, reached an agreement with Reid. The result was strong bipartisan support for rules changes to the filibuster. Was this a fluke or a sign of things to come?
With three months of breathing room, the deficit appears to have taken a back seat to immigration reform and gun control. The GOP took a beating from Hispanic voters because of their position on immigration. What has emerged as a result is a bipartisan effort in both the Senate and the House for comprehensive reform with both parties willing to discuss a path to citizenship. While details have to be worked out, a willingness to finally resolve this issue is apparent. The debate on gun control has not gone beyond positioning and rhetoric. There does appear to be some common ground on background checks and addressing mental health issues. Whether bipartisan cooperation can be achieved may rest with the willingness of those lawmakers with high NRA grades to participate.
Fast forward to March. The effects of filibuster reform should be known by this time. Both chambers should be working on their individual budget resolutions. If signs of initial bipartisanship were more than political show, we should be reading reports of meaningful discussions on spending cuts, increases in revenue, and revision to the tax code. Since neither party wants to go into the 2014 campaign cycle which starts towards the end of this year as the party of blame, I believe those discussions will be taking place and a compromise joint budget resolution will be passed by April 15th. The budget resolution is the plan. The challenge then becomes implementing the plan. Congress will have to maintain a spirit of cooperation to enact the legislation necessary to do that.
Many, including me, have said business needs confidence to restart investing and hiring. Congress addressing major issues in a bipartisan manner will help that confidence return. If it does, the parties will have to decide if risking loosing that confidence is worth returning to hyper-partisan ideology when debating legislation to implement the budget resolution. How voters respond to polls will determine that outcome.
I think Congress is tired of low approval ratings. Members of Congress have to be enjoying the positive press that comes from bipartisan actions. It boosts their egos. Because of that, I predict Congress will pass a bipartisan deficit reduction plan this year. This will be followed by serious discussion and some major changes to the tax code before the 2014 mid-term elections. After all, this is all about the next election. Any benefits to the country as a whole are just an inconvenient side effect.