Economics, Taxes and Spending

To win the fiscal cliff battle, Republicans should follow the Constitution

Image Credit: Bryant Avondoglio (

Image Credit: Bryant Avondoglio (

In the current negotiations over the budget cliff, Speaker Boehner is trying to cut a deal with the White House. This has – foreseeably – turned into political posturing from the Democratic side. I propose a quick – but not necessarily simple – strategy for moving forward.

The Constitution, Article 1, Section 2, Para 2, states that laws are made in Congress, and then signed (or vetoed) by the president. It also requires that all bills affecting taxes must first be passed in the House. When there are differences between the House and the Senate, a conference committee is supposed to iron out the differences, and a common bill passed, before being sent to the president.

That is exactly the procedure that now should be followed by the House. The Speaker should gather his caucus and decide what broad elements they are willing to stand by. This must be some combination of revenues and budget cuts, preferably including entitlements. Following the precedents in various prior laws, such as Obamacare and Dodd-Frank, the Republican-passed bill could give broad guidelines for what savings will be required in what programs, and then set up bipartisan commissions to iron out the details over the coming six months. Such a bill should be quickly drafted, presented to the House, be passed by a Republican majority, and sent to the Senate. Boehner should then immediately recess the House, and send everyone home.

This places the onus squarely on the Senate. The Senate now has to pass a bill, and, if they do not, the cliff is on them and not on the House. If and when the Senate passes a bill, Boehner can appoint suitable representatives to a conference committee. If that committee agrees on a common bill, the House can be recalled for a vote, and then immediately recess once again. This procedure leaves it to the president. He can offer his inputs to the Senate and/or the conference committee, but that is all.

The point of this proposal is that our Constitution makes it perfectly clear that legislation originates in Congress, in this case in the House, and is then passed to the president. What we see now is an intolerable game of semi-cloaked negotiations played out partly behind closed doors, partly in the media. The Republicans are clearly not winning this game. But sticking to the standard procedures envisioned in the Constitution puts them in the driver’s seat for the remainder of the game.

As an added twist, Boehner should instruct his caucus to pass by acclamation the poison pill that Rep. Pelosi will propose on Tuesday. She has announced that she will present a bill that will extend the tax cuts for the middle class, hoping that the Republicans will vote against it. There is no reason to do that – it’s best just to pass it, and send it to the Senate. That leaves the rest of the issues, and they will be subject to formal proceedings in the Senate. Whatever costs are imposed by the extension of the middle class tax bill can simply be folded into the final bill that Congress sends to the president.

After all, isn’t it the primary responsibility and function of Congress – not the White House – to enact legislation regarding taxes and spending? The above procedure just does what the Constitution requires, no more. Enough already of this strange game where the president is negotiating, and not negotiating, on things not yet passed!

Carl Dahlman is a retired economst. He served as Deputy Assistant Secretary for Income Security Policy in HHS during the Reagan Administration, and as Deputy Assistant Secretary in the Pentagon during the Bush 42 Administration. He was a Senior Economist at the RAND Corporation until 2009. He has taught economics at Univ. of California, Santa Barbara, Univ. of Wisconsin, Madison, and Virginia Polytechnic Institute, Blacksburg. He is a naturalized American from Sweden, and his particular interests are public choice and law and economics.

9 thoughts on “To win the fiscal cliff battle, Republicans should follow the Constitution

  1. yet another evasion of the GOP’s essential responsibilities to insure that the budget is balanced especially after they played such a huge role in the creation of the deficit and debt.

    Now.. they want to talk about ANYTHING but their essential responsibility.

    the GOP continues to deny, continues to live in a dream world.

    • Hmmm….the House has passed budgets. The Senate has not. The House has a plan that they have passed to reduce the deficit. The Senate has not. This admin has DOUBLED the debt in a short 4 years, the most profligate administration in history. Now explain to me again how the GOP is the problem here? I know that math is hard, but come on dude!

      • re: ” This admin has DOUBLED the debt in a short 4 years”

        tell me what they spent the money on…..

        the stimulus a trillion for sure.. now how about the other ?

        The House did not pass a serious budget.. it was a symbolic budget that they knew had no chance of passage …they
        did not even try to find compromise…

        they would not even let the Dems make amendments to it.

        but tell me specifically how Obama himself – doubled the debt.

        • With regards to Obamacare, how much Republican input did the Democrats allow.

          And the point is still that the Republican House did submit a budget (the Democrat House did not) and the Democrat Senate has not!

          • How much input did the Dems have on the Bush Tax Cuts?

            How much input did the Dem have in the current house budget?

            The GOP is out of touch with most Americans who do like SS and do like Medicare and DO WANT people to be able to get affordable health care.

            ObamaCare is what happens when the other side refuses to address the issue at all.

  2. Oh my God, a simple Constitutional point immediately triggers the same old idiotic partisan-politics finger-pointing reflex. Look, BOTH parties collaborated in spending money over the past 10 or 20 years, isn’t this obvious? And the original post made a simple point which has nothing to do with the two-party system. Somehow, this president (like some others) wants to inject himself into the budget-writing process. Either that, or spineless congresspeople want him to do it so that he can be blamed later, and they will escape blame. Yes, it’s all a travesty of how the system is supposed to work. Point made.

  3. The Democrates have a point on need to raise taxes we could not afford to cut. Where they are delusional is thinking that social programs don’t need a serious overhaul.

    It is time balance the accounts. Let’s have as much retirement program and health care as we can afford and no more.

    • ” Where they are delusional is thinking that social programs don’t need a serious overhaul.”

      I agree but changes have already been made to entitlements:

      1. – 700+ billion has been removed from the Part C subsidies which will have a double effect. Not only will it reduce funding for the subsidies but it will return to the situation where seniors have to deal with the 20% co-pay that was in originally Medicare and destroyed with the passage of Part C ( along with Part D).

      2. – an increase in the payroll tax for Medicare.

      3. – increases in the Medicare Premiums especially on the higher income folks.

      right now….you can have 200K in INCOME (not assets, but INCOME) in retirement and still only pay about $100 a month for Medicare.

      so changes have already been made, more in the pipeline and more will be sought.

      it’s just plain factually wrong to say that entitlements are not on the table.. they have been and changes already made.

      Also – keep in mind that “entitlements” include the health care and retirement of the military retirees which outnumber active duty by 2 to 1.

      these are “entitlements” also and think about this – someone who has NEVER been to a combat zone CAN STILL retire with a full pension and health care at 20 years.

      that needs to be dealt with ALSO.

      what we have right now is a sound bite approach to the issues chock full of inaccuracies and outright misrepresentations… disinformation, etc.. propaganda…

      that seeks to and succeeds in distorting the truth.

  4. By all means we should be fair on taxes.

    10% rate up to $50k wages. 0 on capital gains.
    25% rate to next $500k. 0 on capital gains.
    50 % rate on all income above $500k, but allow deductions for all income previously taxed in any manner. No double taxation should be a firm rule.

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