The Canadian Press - ONLINE EDITION

Taming U.S. debt demands elderly, rich take hit

  • Print

A grand bargain on debt has been elusive for understandable reasons.

First, it will require actions that voters, and therefore politicians of both parties, dislike intensely: raising taxes and cutting popular programs. There’s a reason neither President Barack Obama nor Republican presidential nominee Mitt Romney levelled with voters during the campaign.

Second, it is tricky to fashion a policy that safeguards a weak economy in the short term while guaranteeing a reduction in debt over the long term.

Nevertheless, there are grounds for optimism. Obama and House Speaker John Boehner, R-Ohio, both have committed themselves since election day to a bipartisan search for a deal. Key players, such as Sen. Dick Durbin, D-Ill., and Sen. Bob Corker, R-Tenn., have signalled a willingness to move beyond party orthodoxy.

And there is a broad understanding of what a deal will require. It must be "balanced," as Obama reiterated Friday, with both spending cuts and revenue increases. All the serious people who have looked at the problem, including the Obama-appointed Simpson-Bowles commission and the equally expert Rivlin-Domenici panel, agree that the math won’t work any other way. Given rising inequality, much of the revenue must come from the wealthy.

And given the swelling share of the pie being grabbed by programs for the elderly, at the expense of education, scientific research and infrastructure — at the expense of the future, in other words - medicare and social security must be reformed. This doesn’t mean cuts in these essential programs; it means that their expected rate of growth has to be slowed.

Obama has considerable leverage in the negotiations to come. He campaigned on a promise to raise income tax rates for the wealthiest two per cent. And tax rates for everyone are scheduled to rise Jan. 1, if no deal is reached. That would set back economic recovery, but it also would put the new Congress in a position to argue about how much to cut rates, rather than how much to raise them — a political advantage for Obama and maybe a face-saver for some Republicans.

But it would be far better to reach a deal before then that would allow a more rational, less sudden reform. That’s why Obama was wise, in his first White House statement, not to insist on higher tax rates. There are other ways to raise revenue. Capping deductions offers a different way to target the rich; taxing carbon would have huge collateral benefits. Along with rates, these should be part of any negotiation; both offer potential room for Republicans and Democrats to find common ground.

— The Washington Post

Editorials are the consensus view of the Winnipeg Free Press’ editorial board, comprising Catherine Mitchell, David O’Brien and Paul Samyn.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

O'Shea says the team is going to stick to the plan after first loss

View more like this

Photo Store Gallery

  • A goose cools off Thursday in water at Omands Creek Park-See Bryksa 30 day goose challenge- Day 25– June 21, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • June 24, 2012 - 120624  -  Amusement riders on the last day of The Ex Sunday June 24, 2012.    John Woods / Winnipeg Free Press

View More Gallery Photos

Poll

Will you miss Grandma Elm?

View Results

View Related Story

Ads by Google