By Geoff Colvin
November 2, 2012

As the 112th Congress blessedly nears its end, we can say exactly one thing in its favor: It showed us the problem that urgently needs solving. When the members arrived in Washington in January 2011, they knew they had drawn the short straw in the legislative lottery: They would be in office when the wheels finally came off the federal budget, when Medicare and Social Security would go cash-flow negative, and when the long-predicted hockey-stick upturn in the debt would actually begin. They knew they would face the historic choice of being the hero Congress or the Nero Congress. And from day one they went for the latter.

The problem they so vividly demonstrated is unprecedented partisanship. Congressional Quarterly compiles an annual party-unity score based on how often a majority of Republicans votes against a majority of Democrats; last year the House set a new record of 76%. An index by researchers at Princeton and the University of Georgia shows that the 112th Congress is the most polarized going back 130 years. These folks cannot agree on what time it is, let alone on anything of consequence. No federal budget is approved; the Treasury comes within moments of defaulting on U.S. bonds; the super committee can’t figure out a plan. The economy burns while they fiddle.

What’s so frustrating is that bipartisan solutions to our problems are available. It’s just that in today’s poisonous atmosphere, they suddenly aren’t bipartisan. One side or the other insists these formerly centrist prescriptions are the diabolical work of the opposing party. Sensible proposals become untouchable. The problem shows up in the two issues that most need fixing:


Long term, Medicare is the largest element of our largest problem, the exploding federal debt. Can we talk about that? Apparently not. The 112th Congress couldn’t get anywhere near it. When President Obama proposed reducing future Medicare spending by $700 billion, Republicans suggested he was personally tormenting oldsters. When Paul Ryan co-sponsored a plan to control Medicare finances, Democrats ran TV ads in Florida saying he wanted to end Medicare as we know it.

Let’s get something straight: Medicare as we know it is going to end, with or without Obama or Ryan or anyone else. The question is what it will become. The wrongly labeled Ryan plan, previously known as premium support, is the most promising bipartisan proposal. Its latest version is actually the Wyden-Ryan plan, since it’s co-sponsored by Sen. Ron Wyden, a liberal Democrat from Oregon. It would let seniors stay with Medicare or buy medical insurance in the open market with federally funded vouchers. Premium support was first outlined by two Democratic economists at the Brookings Institution. It was supported in 2010 by the Bipartisan Policy Center’s Debt Reduction Task Force, chaired by former Republican Sen. Pete Domenici and former Clinton OMB chief Alice Rivlin. It’s as solidly centrist a proposal as you’ll hear.

Tax reform

Everyone agrees the tax code is an abomination that discourages investment and most other economic activity. The bipartisan approach to fixing it isn’t a mystery: fewer deductions, exclusions, credits, and loopholes, combined with lower rates. The Simpson-Bowles commission endorsed that formula, as did the Domenici-Rivlin task force.

Of course the devil’s in the details, but working them out is what we pay legislators to do. That’s the job at which the 112th Congress proved so spectacularly inept. If a reform package would (or even might) increase tax revenue, many Republicans couldn’t abide it. If it would lower rates on high-income taxpayers, even if it could increase their tax bills through eliminated deductions, plenty of Democrats would be unalterably opposed.

There’s no reason to suppose the 113th Congress, arriving in January, will be better than the 112th. But just maybe its members will be so panicked by an economy going nowhere and the prospect of more trillion-dollar deficits that they’ll be forced into the unthinkable: cooperating.

This story is from the November 12, 2012 issue of Fortune.

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