My friend Andrew Moylan of the R Street Institute has an excellent short paper out that summarizes five dos and five don'ts of the fiscal cliff negotiations. The don'ts are all common sense stuff, to which I would only add "Don't give up hostages to fortune" -- in other words, don't say anything now in the hope of appearing "reasonable" that could come back to haunt you.
I would, however, like to highlight two of the dos in particular. The first -- "Do raise the credit union member business lending cap" -- is about securing important access to credit for smaller businesses. Failing to do so will give large banks a competitive advantage over smaller financial institutions and impede job creation. One of Ronald Reagan's signature achievements was securing a real place for credit unions in the financial system, and it would be a step back to forget this now.
Another important do is to pass the Renewable Fuel Standard Flexibility Act, which has bipartisan support. Currently the renewable fuel standard -- i.e. burning food as fuel, even in a drought year -- is helping drive up the price of food and costing restaurants billions, thereby putting a lot of young people out of work. The EPA has stacked the decks against people petitioning for relief from this standard, so a legislative solution is necessary.
Both of these steps would provide significant regulatory relief for the economy. At a time when most people are talking about taxes and revenues, the importance of growth through liberating the economy by deregulation is often forgotten. I'm glad that Andrew has brought it up so eloquently.
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