WASHINGTON — Both major political parties may have their fingerprints on long-simmering problems in the federal budget, but just one created the current crisis known as the fiscal cliff.
Blame them or thank them, it was the Republicans who forced a series of budget moves over the last decade that now are bringing the government to a breaking point that threatens sweeping tax increases and indiscriminate spending cuts that could plunge the country back into recession.
Part of it was a political gimmick, working the rules of the Senate to push through sweeping tax cuts in a way Republicans later would lambaste when President Barack Obama’s Democrats used the same tactic to enact the new health care law. The legislative gimmick got the tax cuts through Congress, but it made them the first such tax cuts with an expiration date. Those temporary tax cuts are expiring.
And part of the Republican approach was by design, risking the first-ever default on U.S. debt to force a change in Washington and rein in runaway deficits. That 2011 showdown led to the automatic spending cuts that will start going into effect Jan. 2 — and which none really wants in their current form.
It started in 2001, when the government was running its fourth straight year of surplus and President George W. Bush moved to cut taxes as he’d promised in his campaign. He faced a serious hurdle, a Senate split 50-50, far short of the 60 votes needed to clear Senate rules and enact his sweeping tax reduction.
There was a way out, but it was a tactic that the staid Senate was reluctant to use, called reconciliation.
Created to make it easier to deal with budgets, it also became a tool for skirting the 60-vote threshold since only 51 votes were needed. There was a major catch: Any such bill could only make changes in federal revenue for a maximum of 10 years.
With support from some Democrats, the Bush tax cuts passed the Senate with 58 votes. They were temporary.
The precedent was set, and when Bush came back with a new, more controversial round of cuts in 2003, the Republicans used the reconciliation rule again. This time, the bill passed with 51 votes, as Vice President Dick Cheney broke a 50-50 tie.
In May 2001, White House press secretary Ari Fleischer was confident the cuts would be extended forever. “To do anything other than that is to raise taxes on the American people,” he said.
The tax cuts contributed to a decade of record deficits and debt, aided by rising spending on a new Medicare benefit and wars in Afghanistan and Iraq. The national debt, $5.7 trillion when Bush took office in January 2001, had grown to $10.6 trillion by the time he left eight years later. It grew more under Obama.
“Republicans set up the deadlines feeling voters would move in their direction. But in the last election, they didn’t move in that direction,” said Steven Schier, a political scientist at Carleton College in Minnesota.