The nearer we get to Jan. 1, the closer we get to the expiration of a raft of tax provisions and the scheduled imposition of across-the-board spending cuts often referred to as the “fiscal cliff.”
Despite the country’s lurching toward this cliff, Congress and the president appear to be more concerned with jockeying for position than avoiding the plunge. This may be due to the competitive and combative nature of high-stakes politics. Or perhaps Democrats and Republicans genuinely do not know how to resolve this problem. If the latter is the case, they may want to look to a source that has experience with these matters: Hollywood.
If President Barack Obama and the Democrats and Republicans in Congress look to the movies for inspiration, they have several choices:
1. Full speed ahead. Several movies provide helpful guidance if both sides think going over the cliff is their last and best choice. “Thelma and Louise” (1991) offers tips, although one suspects that “Butch Cassidy and the Sundance Kid” (1969) may provide the more hopeful model. In any case, as exhilarating as such an approach may be for the participants, it is not a smart move for those who want the movie to continue (even in “Butch Cassidy and the Sundance Kid,” their escape can be viewed as foreshadowing). Even though this ending may be unlikely, it cannot be ruled out. Sen. Patty Murray (D-Wash.) in July appeared to be auditioning for the role of Thelma or Louise, and it is never hard to find a couple of would-be cowboys in Congress.
2. Jumping with secret planned escape. There are plenty of examples: James Bond with his parachute in “The Spy Who Loved Me” (1977), even “Chitty Chitty Bang Bang” (1968), with or without wings. This is the most fantastic ending, and so the odds of it happening are about the same as the IQ of anyone who counts on it happening in real life.
3. Somebody unintentionally goes over the cliff. In these movies, a character does not plan to go over the cliff, but he miscalculates or waits too long to avoid his fate. “Rebel Without a Cause” (1955) is a classic example. By definition, this outcome is unintended, but it happens in real life just as it does in the movies. So, this outcome has, unfortunately, a real chance of occurrence.
4. Falling person saved at the last minute. The scene where the hero rescues the person dangling from the cliff is common enough to be a cliché. In this case, however, who is available to play the role of the hero? Is Federal Reserve Chairman Ben Bernanke really strong enough to pull up an entire Congress and administration? Also, whether the hero succeeds depends on whether the movie is a tragedy or a feel-good story. It is not clear what we have; the only genre we can rule out is comedy. This down-to-the-wire story may be repetitive (most recent installment, December 2010), but it isn’t funny.
5. Something but not everything goes over the cliff. This is the scenario I think most likely to occur. A good example is “The Return of the King,” the third in the “Lord of the Rings” trilogy. I will try to be vague enough not to spoil the ending for those who have not seen the movie or read the trilogy, but let’s just say that there is an epic battle, and some valuable and problematic items go over the cliff in the ensuing scuffle. It is hard to tell whether what goes over the cliff is thrown or falls. Now freed of their burden, the survivors come to their senses.
Of course, a movie needs more than a good ending. The most important thing is controlling the narrative so that the story unfolds as its author intends. Politicians know that as well as screenwriters, and that probably explains why there has been so much more scene-setting than fiscal resolution this year.
Like most people, I have my preferred ending to the fiscal cliff (including who I would cast as Gollum). Yet, at this point, I think I would take any ending that doesn’t invite a sequel — or that doesn’t remind me of the Road Runner and Wile E. Coyote.
John Harrington is a member of SNR Denton’s tax practice and previously served as international tax counsel for the Treasury Department and tax counsel on the House Ways and Means Committee.