On the edge of the cliff

To be at this point, in the last hours of the year, without a deal on the two-year old debate over the budget shows just how dysfunctional this divided government has become.

The consequences of beginning 2013 without an agreement on the budget or the debt are serious but fixable if steps are taken quickly to avoid the draconian spending cuts and the tax increases so as not the damage the country’s economic recovery.

What may be far more serious, and more difficult to change, is the message this sends that the largest economy in the world is ungovernable. The financial unpredictability that this creates translates into an enormous loss of confidence in the United States.

It had been hoped that voters would make it clear in the election how they felt about the stalemate between the White House and Congress. An they did. It is infuriating that the losers of that election refuse to let go of their rejected ideology and instead, are choosing to ignore the will of the majority.

Even worse is that this post-election Republican partisanship is an indication of more debates to come throughout 2013 when the debt ceiling has to be raised and when spending to keep the government functioning needs to be authorized.

That is why President Obama was hoping to use this as the time to make a “grand deal” with the Republicans that would include raising taxes on the wealthiest, cutting expenses by changing the formula to calculate Social Security, and establishing a framework for future negotiations on the debt and government spending.

The failure of the “grand deal” indicates the Republicans will continue to employ their strategy of bringing the country to the brink of the fiscal cliff as a way of negotiating. In other words, to do everything in their power to push it to the very edge, which has the ultimate effect of hurting confidence in U.S. markets around the world.

We hope at a minimum an agreement can be reached to extend both the tax cuts, except for the highest earners, and unemployment benefits. As we’ve said before, a divided democracy doesn’t have to be dysfunctional. All it needs to work is a commitment to compromise and a respect for will of the majority.