Republicans are digging in their heels against Democratic proposals to raise taxes on high earners while Democrats are refusing Republican demands to cut spending on entitlement programs like Medicare.
Whatever happened to compromise? It used to be known as the essence of democratic government. Edmund Burke, the 18th-century politician and writer who was one of the intellectual fathers of modern conservatism, wrote that "All government, indeed every human benefit and enjoyment, every virtue, and every prudent act, is founded on compromise and barter."
Compromise hasn't disappeared. Indeed, it has been on display in Europe lately, where the Italian Parliament gave the new technocratic government of Mario Monti a second vote of confidence Friday. Outgoing Prime Minister Silvio Berlusconi called for his successor to be given a full term in power until the 2013 elections.
In Greece over the weekend, one of the holdouts on the demand that all the party leaders in the new government of national unity sign a reform pledge gave up his opposition and compromised.
"If it is up to me to determine the payment of wages and pensions, it is my duty to secure funding for the under-fire Greek people," George Karatzaferis, leader of the small Laos nationalist party, told declared after talks with EU and International Monetary Fund officials.
The EU and IMF officials had made it plain that without the pledge being signed, they wouldn't release the next tranche of $11 billion in financial aid, which is required to fend off national bankruptcy.
The key holdout, Antonis Samaras, is refusing to sign the letter pledging to accept the terms of austerity cuts and reforms demanded by the European Union and IMF. Leader of the New Democrats, the main opposition party, Samaras claims that his promise to support the government of national unity should suffice without his signature on the austerity pledge. The EU governments are unlikely to accept that argument, since the written acceptance of their terms as a price of more financial support was graven in stone when the deal was reached.
We shall see whether a spirit of compromise manages to resolve that dispute. We shall also see whether the German and French governments can reach a compromise (and they always have done so in the past) over the German refusal to permit the European Central Bank become Europe's lender of last resort, as the French propose.
Why has compromise become so difficult in modern politics? Indeed, why has compromise become something close to a dirty word for a whole generation of politicians in Europe as well as in the United States?
Perhaps it goes back to the days of Margaret Thatcher and Ronald Reagan, who insisted that compromise in the past had led to repeated shifts toward more government spending. Thatcher in Britain and Reagan in the United States said that the each new demand for public spending had led to a compromise, which resulted in the overall bill being ratcheted up year by year, budget by budget.
It is a pity that the new Meryl Streep biopic movie of Thatcher doesn't include the Iron Lady's famous line, "The lady's not for turning." Despite the firm rhetoric, Thatcher and Reagan each proved to be an able compromiser when the time came. Reagan reached a deal with the Speaker of the House Tip O'Neill, D-Mass., on tax cuts and defense spending and public spending as a share of British gross domestic product was a shade higher when Thatcher left office that it had been when she took power.
Thatcher also, despite her critical rhetoric over Britain's role in Europe, presided over an increase in the annual British contribution to the European budget from less than $1 billion when she took office to more than $5 billion when she left it. She knew how to compromise, even when the bill cost real money.
And yet broadly speaking, Thatcher and Reagan embodied an era when the apparently inexorable rise in the role and spending of governments was braked and restrained. Indeed, by the time they had left office, the Democratic President Bill Clinton could say "the era of big government is over" and the Labor Party's Prime Minister Tony Blair could acknowledge the debt that his country owed to the Iron Lady.
The political weather had changed. Before the Thatcher-Reagan years there had been an assumption that government would continue to swell. After it, there was an acceptance that maybe it should start to shrink. But politics is a messy business and decisions are seldom clear cut, so that one result of the Reagan compromises was that the U.S. government debt tripled during his eight years in the White House from $1 trillion to $3 trillion, starting that steady trend of budget deficits that have taken it to $15 trillion.
For too many years, in the United States as in Europe, more debt seemed preferable to more taxes. And it stands to the credit of Clinton and his Republican opponent and Speaker Newt Gingrich, R-Ga., that between them they achieved a compromise which saw the U.S. government go into surplus.
That's the kind of compromise that is needed now, on both sides of the Atlantic. And Edmund Burke would be the first to approve.