American people, not lawmakers, really understand our fiscal mess

The 2012 election did not provide a clear mandate for either party, and certainly not for President Obama. The election itself reflected the polarization of the last four years and offered little in the way of direction about what the American people would like to see done. Rather, this election was more about tactics and campaign techniques than it was about messaging or any sort of vision for the future.

But it would be a profound mistake to assume that consensus doesn’t exist in the electorate towards how to address our increasingly serious fiscal problems. A clear majority of the American people know we are in a serious crisis and a just-completed survey shows a broad consensus for a set of free market, pro-growth policies that can bridge the gap between an intractable president and an equally obstinate Republican Party in the House.

The just completed survey shows that over three quarters of the American people would support a compromise that lowers tax rates, reduces deductions as well as promoting pro-growth fiscal policies – all the while reigning in spending and entitlements. In short, the electorate has clearly agreed on a path forward. If only the politicians would listen.

It is frankly somewhat jarring to hear Republicans and Democrats both suddenly focusing on the budget and sequestration now that the election campaign is over. The events of the first week of the post-election period support the notion that the people themselves are well ahead of the politicians in reaching consensus on a solution.

A mere 2 days after both sides pledged to work together to reduce the debt and deficit, Republican and Democratic leaders were back to their original position with President Obama saying it is essential to raise taxes on the wealthiest Americans and House Speaker John Boehner, just as adamant over the weekend in his rejection of any tax increases.

The polarization and division that is now evident in Washington is reflected in the results of the first major national survey of public opinion on fiscal issues taken after last Tuesday’s election. The results reveal an arguably even more dissatisfied electorate than we saw before the election. But equally, if not more importantly, the results highlight an electorate that sees a clear path forward.

Sixty-one percent of the electorate disapproves of how President Obama and the Democrats in Congress have handled the issues surrounding the fiscal cliff and 58 percent gave a similar response about the Republicans.

Both parties are now viewed extremely negatively – 58 percent view the Republicans in Congress unfavorably and 56 percent say the same about the Democrats. And both parties receive almost equal blame for the country’s economic deterioration – a testament to the deep dissatisfaction the electorate feels towards politicians from both side of the aisle.

Indeed, there is huge concern that the political class in Washington has not provided any meaningful approach to addressing our mounting fiscal challenges. Sixty-one percent of the electorate disapproves of how President Obama and the Democrats in Congress have handled the issues surrounding the fiscal cliff and 58 percent gave a similar response about the Republicans. It’s axiomatic that neither party has given an increasingly skeptical public any reason to be confident in their ability to deal with our impending fiscal challenges, and certainly no reason to have confidence in their ability to deal with long-term issues relating to the debt and deficit.

The results of my survey of 600 randomly selected Americans suggests that the American people are far more aware of the gravity of the fiscal situation than either party has acknowledged.

An overwhelmingly majority of the electorate favors a bipartisan compromise that would have as its end result stimulating economic growth and creating jobs. An extraordinary 88 percent endorsed a bipartisan agreement that would put all possibilities on the table including tax and entitlement reform with the goal of generating a pro-growth, free market economic system that creates new jobs.

The Bowles-Simpson framework is a clear starting point for negotiation. After receiving widespread public support from the business community just before the election, it is my belief that Bowles-Simpson can, and arguably should, form the basis for both a short term and long term approach to our fiscal challenges.

Indeed, the president could do worse than to appoint Erskine Bowles and Alan Simpson, the two chairmen of the Bowles-Simpson Commission, to head a special White House initiative to find compromise before sequestration automatically kicks in – which would result in over a trillion in cuts to the budget on January 1st.

Indeed, there is widespread skepticism that either party has an approach that can save us from the worst ravages of the fiscal crisis.

In the wake of the election, a full 70 percent now agree that we need a new party dedicated to compromise, conciliation, fiscal discipline and economic growth that draws on the best ideas from both sides. Needless to say, these numbers reflect as much dissatisfaction with the existing order as they do for the desire for a new party. Still, these figures should be a warning sign to both sides and, especially, to a Republican party that enjoys a favorability rating of only 30 percent with the American people.

Fortunately, the path forward is clear. Tax reform that reduces rates and limits deductions will, in the electorate’s mind, stimulate the economy and job growth as well as providing a way to address both President Obama’s desire for greater revenue from the wealthy and Speaker Boehner’s desire to lower tax rates. To be sure, tough decisions would have to be made about which deductions to limit, but the idea of means testing the home mortgage deduction and charitable deductions is an immediate possibility for consideration.

Unless an initiative of this type is put forward there will be less support for the political parties and their Congressional wings. Even if the two parties remain intact, Gallup has shown a steady increase in independent identification with now over 40 percent of the electorate describing themselves as not affiliated with either the Democrats or Republicans.

Politicians of both parties have to change. There must be recognition that the implementation of an economic framework that grows a stagnant economy, stimulates growth and begins the process of reforming entitlements and reducing spending is a necessity. It is what the American people are now demanding and there is little time to waste.