Obama's Historic Budget Opportunity

By Robert Zoellick, Wall Street Journal - December 10, 2012

Since the election, PresidentObama has focused the debate about the fiscal cliff on taxes. This tactical political positioning is putting at risk the strategic objective of a pro-growth budget package to reduce U.S. debt. Unless the president pushes to slow the growth of spending, he will fail to strike a deal, undermine U.S. growth prospects and ultimately erode America's safety-net programs. The country's global standing would falter, too, because the president would not have led in demonstrating America's "governability."

Republicans resist tax increases for many reasons. But one concern is that "spending cuts" are not reductions from an existing budget in the way that families or businesses cut costs. Instead, a federal budget "cut" is achieved by lowering the rate of growth compared with some assumed increase. Another concern is that tax increases, once legislated, stay in effect, whereas the government has over the years overridden spending "cuts" in a variety of ways.

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