Inside D.C.

The art of compromise, a productive 2016

The beginning of 2016 begs the question: What does a lame duck president try to achieve in the last year of the chief executive’s second term?  Some say not a lot; I’d argue, it’s more like anything he wants to do.  Congress faces a similar challenge.  I’d factor in presidential politics at this point, but poll numbers notwithstanding, it’s too early to pick party nominees, let alone handicap winners, so confused are both party’s nomination challenges.

The primary focus for President Obama is his legacy, or those actions and/or achievements for which history will remember him.  Legacy is not always a good thing, and this is the challenge facing the incumbent president, namely ensuring his historical identity is based upon steps forward, not missteps and stumbles.

The Republican-controlled 114^th Congress is dealing with its own challenge of reputation and legacy.  Congress is struggling on two fronts:  First, the GOP are focused on retaining, if not increasing their control over both chambers.  To win this battle, the GOP must demonstrate resolve and action on issues important to the conservative base, while successfully laying a lack of success at the feet of a White House resident bent on vetoing any Republican measure.

Second, the GOP Congress can’t content itself with sending so-called “message legislation” down to the White House.  Message bills – killing WOTUS, “repealing” Obamacare – are those which pass both chambers on party line votes.  Party line votes are good things if the party controls both chambers by a two-thirds veto-proof majority; Republicans don’t enjoy that luxury in either chamber.

The reality, then, facing both the White House and the Congress is compromise.

If you ask President Obama, his presidency will go into the history books as that which brought the country a strong economy, solid employment, universal health care, peace in the Middle East, homeland security, a cleaner environment and which modernized outdated federal immigration laws.  Critics contend the fate of each of those achievements is precarious at best; all could fall of their own weight or miscalculation by year’s end – given most are sitting before federal courts – leaving the president with very little to show for eight years in office.

But at the same time, what can Congress point to as rock solid achievements of the last year?  A two-year budget deal?  Check, but the White House agreed.  An omnibus spending package for FY2016 – with a ton of policy riders and, arguably, not the GOP’s top 10 or even top five?  Check, but again, the White House gave the green light.  A multi-year federal highway bill to keep infrastructure repairs on track?  Check again, but again the White House acquiesced. All were achieved through compromise.

Congress could tackle this year – and I’m convinced House Speaker Paul Ryan (R, WI) in his heart of hearts wants to tackle – immigration reform, personal and corporate federal tax reform and trade expansion.

On immigration reform, the most obvious starting point is the Senate-passed comprehensive reform bill passed three years ago.  I’m not saying embrace that legislation and run with it, but the evolution of that bill demonstrates the heavy lifting has already been done.  Each section of that bill was the product of compromise between immigration reformers and employers, and the bill was refined and forged through hearings, markups, committee amendments and floor amendments.  That bill should be the starting point for debate. If you hate the notion of “a path to citizenship,” then fight to change that phrase to “legal status,” and get on with the notion of reforming a system that’s broken and settling the fate of 11 million much-needed undocumented workers, giving employers surety at least until the next round.

When it comes to tax reform, no one disagrees the system needs to be modernized and streamlined.  Both parties also agree one of the biggest roadblocks to truly jumpstarting a stuttering economy is by reforming corporate tax rates and simplifying the personal tax code.  The federal statutory corporate rate of 39.1%, and an effective corporate tax rate after deductions and such of 27.9%, means the U.S. sits atop a global list of national corporate tax rates where being number one is a bad thing.  This is why U.S. firms stash cash overseas and companies merge to avail themselves of overseas headquarters and better tax rates, i.e. “tax inversions.”

The personal tax code conundrum is approached by looking at how to simplify/consolidate and lower the overall rates.  Congress needn’t go line by line through the entire 75,000-page federal tax code; it needs to solve the biggest problems first, tweak the code to help pay for it, i.e. close some or all of those 700-plus tax loopholes identified by then-House Speaker John Boehner (R, OH) a few years’ back, and save all that new-found expertise and energy for another fight another day.

Trade expansion is achieved through congressional approval of the TransPacific Partnership (TPP). The greater good – at least from an agriculture and domestic economic standpoint – is expanded export markets, and U.S. economic leadership in a region currently dominated by China.  Democrats, blocking TPP approval because they’re upset with the president for not having “consulted” them about a “generational” trade deal with 12 Pacific Rim nations representing 40% of global gross domestic product (GDP), need to put hurt feelings aside, put partisan politics aside, and back the administration, trusting the Democrat in the White House has not abandoned U.S. jobs and environmental protections in pursuit of a legacy trade deal.

The toughest part of this process is acknowledging that if politics is the art of the possible, and a good compromise is a deal where everyone walks away a little bit disgruntled, then there’s a whole lot that can be achieved – and enough credit to go around.