Now, Govern

I'm as amazed as everyone else by the results on Tuesday night, and they're still sinking in. The new America won; and the 1980s lost. Not everything can be solved by cutting taxes and dropping bombs, a majority of Americans have resolved; the Great Recession was not an ordinary one; the way forward not as glib or as easy for the right as Mr Iraq War would have you believe.

But it would be a huge error, it seems to me, if the president decided to bask in his stunning victory, rather than seeing it as a precious moment for the expenditure of political capital. We are facing automatic massive tax hikes and huge, crude spending cuts starting January 1 if we cannot get a bipartisan deal on Bowles-Simpson lines (of course there is room for tweaking and bargaining). A failure to get that kind of deal would tip the US and the world into a new global depression.

We need to think of the fiscal cliff as we did the Super Storm Sandy. It's unlike anything we have encountered in recent times. But when Chris Christie threw partisanship to the literal winds and embraced the president in an emergency (and vice-versa), we saw a glimpse of what can happen, of what Obama actually promised all along he could bring about, and what he has yet failed to do.

His re-election has re-capitalized him. He should use that capital, it seems to me, immediately, when it is at its peak. There are obvious contours for a deal: the 155691870parameters that both the president and the Speaker came close to in the summer of 2011. The Speaker has publicly reiterated that he is open to new revenues; the president has said he is aware of the need to cut the cost of entitlements in the future. The cost-controls in the ACA may help, and should be aggressively tested, but we have no more proof of their success than we did when Bush promised that huge tax cuts would generate growth and employment for the middle class. That's why they had a sunset on them. Some kind of premium support option or later retirement age are by no means unreasonable complements to innovative rethinking of healthcare, given the exponential growth of spending on everything we now call "health."

Tax reform along 1986 lines is obviously the most productive common ground. Get us to three simple rates; get rid of the myriad deductions, including those for mortgage interest and state taxation. End all those corporate loopholes. Some of this will hurt the middle class – but rates can stay the same even as revenues rise; and there is simply no way to get to fiscal sanity without some sacrifice from the middle as well as the top. I think Obama has every reason to put the successful and wealthy back near the tax bracket Bill Clinton left us with. But equally, doing so without radical tax reform is a non-starter for the GOP, and they have a legitimate constitutional veto.

Then take an axe to the Pentagon, as Simpson-Bowles did. The perpetual war machine has become a kind of entitlement in itself, draining the country of resources we need at home, in pursuit of global hegemony that is becoming counter-productive to actual, you know, self-defense. Then we have to consider increasing premiums for the elderly who are better off, and to put back into Obamacare that end-of-life power-of-attorney discussion for everyone on Medicare that Sarah Palin called "death panels". A mandatory discussion of power-of-attorney issues for Medicare is not a "death panel." It's a wise nudge for people to be able to control their lives in advance. To invest so many resources into extending a dying person's life by a few days (when we don't even know for sure in many cases if the person wants that extra care), is completely irrational, when we desperately need to invest in education for the young. And yes, that is a choice we have to make, and we are making it now. We are now putting the last gasps of the old over the first steps of the young. That needs re-balancing a bit.

Many Democrats will argue that they have a mandate for higher tax rates for the wealthy. I think they have a mandate for more revenues from the wealthy and a fairer, simpler tax code. The GOP retained the House and they are a part of this country's leadership. Start afresh. Bring them in fully for this deal. Reach out to Ryan as well as Boehner. Many Democrats cannot bear the idea of cutting Medicare benefits, but I want to echo Kevin Drum in saying: it's gotta happen. Many Republicans abhor the idea of drawing down from a Cold War posture in defense. They need to get over themselves too.

The only question is if the president will aggressively take the lead on this, treating it with the same urgency he did a super-storm, and fulfill his promise of breaking through the red-blue divide for pragmatic solutions to our actual problems. He deserves a brief rest, of course. Everyone does. But Americans re-capitalized their president for a reason: to govern, to forge the legislative compromises that can set our fiscal course toward sanity again. This time, he does not have the time to lead from behind. We need him out front, telling us the fiscal truth and showing a way forward.

He does not need to be elected again. He can be a mediator between both parties rather than the representative of one. He has to give the House GOP an honorable way out of their Tea Party nonsense, and tax reform is the obvious way to do it. This must be doable. And if it is achieved, Obama's true promise of getting us past these inane ideological battles toward a workable future will be secure. And contra Krugman, I do believe that renewed confidence in America's long-term fiscal standing will help investment and employment and growth again.

But the president needs to be bold; and magnanimous. And fast.

(Photo: Chip Somodevilla/Getty.)