Tuesday, December 4, 2012

Solve The "Fiscal Cliff" drama Before Christmas

The “Fiscal Cliff” Drama.

This post offers a few thoughts to the leaders of Congress, and to President Obama and his team. They come from a card-carrying member of the “American People.”

As we have mentioned in our previous posts, the foundation principles that underlie the organizational excellence theory of everything apply to national governments and local government units every bit as much as they do to for profit corporations, non profits, educational institutions, etc. An organization is an organization when it comes to the question of how best to pursue excellence. Specifically, Value is maximized when the guiding mindset is outward-focused, long term and dedicated to optimizing value for each and all stakeholder groups. This last element, “optimizing” apparently can be a bit difficult to understand.

So, what in the world is going on with Congressional leaders and President Obama on this “fiscal cliff” matter? Even if one gives all the participants the benefit of the doubt in their public statements about what must be done in the near and long term to best serve the public interest, it still looks like they think the American people are an unthinking, nearly brain-dead lot! However, this writer truly believes that even Congressional leaders and the President and his staff can understand what the American people understand, across the board. The “optimizing” element of the guiding mindset, in fact, must be understood. The Congressional behavior during these last 12 years has not been guided by this mindset-based actionable wisdom.

Let’s be blunt and clear.President Obama has been re-elected. Therefore he has a mandate, period. Of course he can read too much into the mandate. He can abuse it. At the same time Congress should engage in discussions with the President, predisposed to find a mutually acceptable near and long term fiscal plan for the nation, through its government, a predisposition that recognizes the mandate really extends to Congress as well. Specifically:

1.      Quit purposely being cute with the words revenue and tax.  The Bush era tax cut on taxable income above $250 thousand should expire on 1/1/’13.  That tax rate should return to the Clinton era tax rate. All other Bush era tax rates should be extended – no increase. And, the tax code should be cleaned up to eliminate the loopholes and other taxable income-reducing language for which there is no compelling public interest.


2.      Entitlements should be on the table and addressed, not with a meat axe nor with disingenuous revisions whose purpose is to embarrass the “other side.” Rather, revisions to the huge entitlement programs that affect the near and especially long term should be made. The main criteria should be that a. the revisions be phased in, b. the revisions should not affect those who are already beneficiaries, but rather should be applicable to new beneficiaries as of a date certain. The concept here is, “keep the bargains,” and c. the annual budget deficits and accumulating long term debt must be reduced as a result of these changes.



3.      Both defense and non-defense programs should be addressed and reductions made using criteria that include a. no harm but rather improvement to our national defense (and our ability and obligation to lead around the globe where military presence is truly called for), b. reduction or elimination of programs whose public interest time has passed or has been reduced and c. the requirement that members of Congress act as trustees more than delegates in this decision process.

The Congressional leaders should rise to the courage and wisdom level voters expect from them. The President and his administration should as well. Trickery and cat and mouse games, often guided by un-elected and somewhat self-appointed opinion leaders in the form of talk show hosts and carefully selected guests must end.

The American people expect a long term, broadly embraced and actionable agreement before Christmas. It should pass societal muster, commercial muster, financial market muster and global well-being muster. If it is not done, then it might be time to start throwing the rascals out. 

So, adult up, wisdom up and reach agreement, Administration and Congress.