Economix Blog: What Do Democrats and Republicans Agree On?

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In the next two weeks, during the Republican and Democratic conventions, we’ll hear a lot about the differences between the parties. How great we are. How terrible the other guy is. How we’re better on Medicare, on Social Security, on foreign policy, on defense, on education, on taxes. How they’re awful in policy realms you never even thought of.

That left me thinking: Where are the two parties closest together? What goals do they have in common that will likely go unmentioned in Tampa and Charlotte?

At least in the realm of economic policy, the best answer is: Not much. The parties have a foundational disagreement on the size and scope of government. They have bitter fights over when to start winnowing the deficit, whether to raise taxes, how much to cut government spending and where to cut it. They have stark differences on most major programs, including Social Security and housing subsidies.

Moreover – and more importantly – the parties have little interest in supporting the other side’s policy proposals, no matter how much they might agree with them in private.

Even still, I thought of a few areas where the parties have common objectives. Here’s a rundown, and if I have forgotten anything, throw it in the comments.

Tax simplification. Both parties agree on the absolute necessity of reforming the addled, inefficient American tax code. That means eliminating much of the underbrush of credits, loopholes and expenditures and then reducing marginal tax rates.Of course, the devil is in the details. Just about every tax expenditure has a powerful interest group behind it. That is part of the reason why neither party has gotten specific about what they would put on the chopping block, and both anticipate a drawn-out fight during the tax reform process.

Regulatory simplification. Democrats and Republicans both support simplifying the regulatory code as well: Looking through the books, making rules simpler and clearer for businesses to follow and getting rid of outdated or duplicative regulations. To that end, the Obama administration has initiated a “look back” effort, requiring different governmental departments and agencies to scrub their regulatory codes. It has won applause from many thinkers on the right.

Fannie and Freddie. Both parties want them gone and a smaller government role in the mortgage market in the future. How to do it? Expect the parties to solidify their disagreements on that in the coming years.

Avoiding the fiscal cliff. On Jan. 1, according to current law, a host of tax breaks expire and huge, across-the-board budget cuts go into effect. In Washington, it’s called the “fiscal cliff,” or, colloquially, “taxmageddon.” According to the Congressional Budget Office, it would throw the economy right back into recession. Neither party wants that, so expect an agreement on some combination of short-term spending increases and short-term tax cuts after the election – though expect bitter fights on the means, if not the end. Many in Washington think that Congress will merely kick the can six months or a year down the road to leave time for negotiations.

Son of Debt Ceiling. Shortly after “taxmageddon,” perhaps sometime in February, the American government will exhaust its borrowing authority – meaning some unprecedented form of government default. It almost happened in the summer of 2011 and resulted in a credit downgrade. Neither party wants to go back there. Expect some agreement to lift the debt ceiling to come along with the deal to delay or otherwise soften the blow of the fiscal cliff.

Drill, baby, drill. The White House has approved new drilling in the Gulf and the Arctic. That’s something Republicans broadly support and would go even further on.

Start-ups. Propose a bill to help start-ups, see your legislation win bipartisan support and the president’s signature. Small businesses, and young businesses: Everybody loves them.

Iran sanctions. The White House has imposed stringent new economic and financial sanctions on Iran, with the aim of ending the country’s nuclear ambitions. They have won broad bipartisan support, and the American and European sanctions added in the last year have slashed the regime’s oil revenue.

Article source: http://economix.blogs.nytimes.com/2012/08/27/what-do-democrats-and-republicans-agree-on/?partner=rss&emc=rss