The U.S. political landscape has remained mostly as it was before the 2012 election, with President Barack Obama keeping the White House, Democrats maintaining a majority in the Senate and Republicans retaining control in the House of Representatives. As Congress convenes for a lame-duck session, Democrats and Republicans will be tested by the immediate need for collaboration if they are to avoid the “fiscal cliff” of automatic tax increases and deep spending cuts that some economists warn could send the country into a recession.
The fiscal cliff is the most pressing of many challenges awaiting the re-elected president and the 113th Congress. Many of these issues have a direct impact on the workplace.
“All of the issues on the table today are HR issues,” said Hank Jackson, CEO of the Society for Human Resource Management (SHRM), at a Nov. 7, 2012, post-election discussion hosted by National Journal magazine and sponsored by SHRM.
“There may be no one with more firsthand experience with the economic issues that matter most to our country than the 260,000 HR professionals of SHRM,” Jackson told a packed room of government officials, public policy decision-makers, business leaders and academics in Washington, D.C.
“We deal with issues such as putting people back to work, workplace flexibility, reversing the skills gap, comprehensive immigration reform, and giving workers a sense of comfort about their pensions and their health care,” Jackson said. “These are the issues that SHRM and HR professionals confront every day, on the front lines for employers, large and small, in all regions of the country,” he said.
Cliffhanger Hinges on Compromise
Economists have said that if Congress does nothing and allows the country to “fall over the cliff”—that is, allows deep spending cuts and sharp tax increases to take effect at the beginning of 2013—the drastic budget changes could shock the economy, and send it back into recession.
Obama has said that he hopes to use the seven weeks of the lame-duck period to lay the groundwork for a “grand bargain” that would involve Republicans agreeing to higher taxes in exchange for Democratic agreement to slowing the growth of spending on entitlements. The president got an initial signal of Republican willingness to engage when House Speaker John Boehner, R-Ohio, told reporters at a news conference Nov. 7, 2012, that the GOP would be “willing to accept more revenue under the right conditions,” referring to the possibility of a broad reform of the tax code.
Can the lame-duck Congress find common ground and do something big by Dec. 31, 2012?
“I’m very skeptical,” said former House Democratic Leader Dick Gephardt at the National Journal event. “Lame-duck sessions are well-named. They are always lame.”
Robert Bennett, a former Republican senator from Utah, agreed.
“In this election, the big surprise was there was no change,” he said. “I don’t expect this lame duck to do anything worthwhile except that, at best, Congress will come up with a ‘kick-the-can-down-the-road’ kind of resolution in the coming weeks.”
Gephardt laid out two possible scenarios:
- *An unwinding of the across-the-board spending cuts for some period of time and a suspension of the expiration of the Bush-era tax cuts “to keep the economy moving in the right direction.”
- A “mini-deal,” in which Congress would suspend a certain amount of the sequestration spending cuts and find “revenue-raisers of some kind” to pay for it, the former leader said.
Both men said compromise would be difficult because all of the choices involve inflicting pain on constituents. Gephardt said all of the options are “toxic” for elected officials who would like to win their next campaigns. “It’s all bad. It’s all pain. It’s poison to cut programs or raise taxes, or even do tax reform,” he said.
Bennett and the other panelists agreed that administration officials need to learn more about how Congress works if they are going to be successful at deal-making going forward. Obama is at a disadvantage, Bennett said, because he was a U.S. senator for only four years before winning the 2008 presidential election.
“One of the problems the administration has had is that Obama was a ‘drive-by’ senator. The administration does not have a congressional relations team that has the kind of institutional memory that is needed,” Bennett said.
The exception is Vice President Joe Biden, who served for 36 years as a senator from Delaware.
“Biden is the one member of the administration who understands the Congress better than anyone else,” said Bennett, recalling how Biden was the administration’s go-to guy in Congress during the 2010 lame-duck session.
Former Democratic Representative from Indiana Phil Sharp stated the importance of the looming fiscal emergency. “There’s a lot of thinking that this economy is not just cyclical but that we’re in a different place in our history altogether. We’ve got to take a lot more seriously the allocation of our resources and the impact of the tax code on investment and consumption in this country if we’re going to have a vibrant economy,” he said.
Roy Maurer is an online editor/manager for SHRM.
After Election, Workplace Issues in Spotlight, HR News, November 2012
Candidates Take on Workplace Issues, HR News, October 2012