"Both sides get something they want, in exchange for something they can swallow. It’s worth a look."

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Two ideas that could overcome political gridlock
By Ruth Marcus, September 19, 2014

Is the country condemned to another two years, at least, of gridlock?

The world-weary take on the midterm elections is an indifferent shrug. Whether Democrats control the Senate or Republicans, nothing will be accomplished anyway, this apathetic argument goes.

The Republican House will be unchastened. The Senate rules will continue to constrict, under Minority Leader Mitch McConnell or Majority Leader Harry Reid. President Obama has essentially given up on legislation; the remaining bricks in his legacy will involve executive action and foreign policy.

Perhaps. Surely the era of even attempting the grand budget bargain is over. Legislative success is measured by the absence of complete irrationality — breaching the debt ceiling, hurtling over the fiscal cliff.

And yet, maybe there are some pathways for more modest progress. Certainly, the appetite remains among lawmakers in both parties who increasingly wonder about the point of it all. No one takes pride in holding the 53rd vote to repeal Obamacare.

There is a credible case that a Republican-controlled Senate could prove more productive. The new, tenuous majority, with an eye on 2016, would want to prove itself and would have more leverage over recalcitrant House Republicans. Meanwhile, if there is an urge for a deal — say, on corporate tax reform — Republicans might as well pursue it with this president, who won’t use the achievement as reelection fodder.

What could get done that Obama might sign?

On two pressing issues — paying for badly needed infrastructure and further controlling the rise in health-care costs — two leading Democratic think tanks have proposed intriguing, bipartisan ways forward.

The first, from the centrist group Third Way, is actually a fraternal twin set of partisan plans. In Third Way’s cheeky phrasing, “Bipartisanship has failed. So let’s try partisanship.”

For their part, Democrats would secure an additional $400 billion of spending for infrastructure, research and education over the next decade. The price would be to identify equivalent savings in mandatory spending programs.

That is theoretically doable because, as it happens, Obama, in previous budgets, has identified cuts of that magnitude — without touching benefit levels. (One caveat: Most of the savings come from trimming Medicare costs, important to keep the program afloat, not to use as a general spending piggy bank. I’d cut more elsewhere.)

Third Way’s carrot for Republicans is reducing the corporate tax rate by 4 percentage points, to 31 percent. This would be a baby step toward Republicans’ desired level of 25 percent. But whereas that leap would require difficult changes to achieve without raising the deficit, Third Way’s proposal would get there simply by limiting tax deductions for the wealthiest individuals.

If this sounds controversial, consider: It’s Mitt Romney’s 2012 tax proposal, to cap deductions at $50,000 (excluding charitable contributions) for those earning more than $250,000. This would raise, not coincidentally, $400 billion.

Both sides get something they want, in exchange for something they can swallow. It’s worth a look.

So, too, is a recent proposal by the more traditionally liberal Center for American Progress and a who’s-who of Democratic health-care experts. It proceeds from two assumptions: despite the recent slowdown in health-care spending, further changes will be required; and, “given the current political gridlock,” federal oversight isn’t forthcoming. Republicans want to control costs by cutting coverage, the CAP paper notes, while Democrats are inclined to deny the need for additional measures to contain costs.

So the CAP plan borrows a traditionally Republican approach: giving power — and incentives — to states to control costs. States would have the option to become “Accountable Care States” that would limit the growth in overall (public and private) health-care spending. Health spending would be pegged to long-term economic growth and linked to quality. States that meet cost-reduction targets would receive a bonus, a share of the savings to the federal government.

If the same number of states opt into the program as signed up for the Medicaid expansion, the center predicts, the total savings could exceed $1.7 trillion in the first decade and the federal government could save more than $350 billion. As with the Third Way proposal, adopting this program would require congressional action, but it is hard to see, other than sheer intransigence, grounds for ideological opposition.

The likelihood that these specific proposals will be enacted? Not high. The possibility that there is some productive legislative path through the gridlock? Not as slim as we have allowed ourselves to be beaten down into believing.
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