JONATHAN CHAIT AUGUST 2, 2011
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When two implacably opposed sides negotiate an agreement, often it's because they disagree on what the agreement means. The supercommittee plays this role in the debt ceiling deal. Tasked with finding $1.8 trillion in deficit reductions, or else triggering cuts to spending concentrated in defense, Democrats think they'll get a balanced solution and Republicans think they'll just roll the Democrats again. Here's former GOP staffer Keith Hennessey laying out the Republican view:
There is a simple Republican counter strategy available:
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Speaker Boehner and Leader McConnell appoint to the Joint Committee six Members who will not raise taxes.
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These six Republicans call the President’s bluff, and tell their Democratic counterparts they are willing to reject a deal that includes tax increases, even if that deal means the trigger will cut defense deeply. They deny the six Democratic Members of the Committee negotiating leverage from the difference between a triggered 10% cut in defense and an 8% cut in nondefense discretionary spending. “This is going to hurt you almost as much as it’s going to hurt me, so I’m not giving you anything to avoid it.”
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These six Republicans encourage everyone to cooperate to get most (all?) of the $1.5 T in deficit reduction from the Big 3 entitlement programs: Social Security, Medicare, and Medicaid. They are the cause of our long-term fiscal problems and they are so big and growing so rapidly that you can save lots by changing them. ...
This means that all Republicans need to do is call the President’s/Democrats’ bluff on tax increases, threaten to allow the pain of the trigger hit both sides, offer $1.5 T of entitlement spending cuts, and wait.
You'd call that bluffing, except that liberals also seem to expect their side to roll over as well. Matthew Yglesias argues that it's follow to assume that health care and defense lobbyists, facing huge cuts in the event of failure, will lobby Republicans to compromise:
[H]ow about this scenario. First, Republicans refuse to agree to more revenue. Second, Democrats refuse to agree to a no-revenue deal. Third, lobbyists for the defense and health care industries get nervous. Fourth, lobbyists for the defense and health care industries remember that they are high-income people who don’t want to pay taxes. Fifth, executives at defense and health care industries remember that they are high-income people who don’t want to pay taxes. Sixth, executives at defense and health care industries start lobbying Democrats in swing districts, red states, or in which key weapons manufacturing or certain hospitals are major industries. Seventh, Democrats fold.
This scenario certainly wouldn't shock me. On the other hand, I suspect the recent negotiation has conservatives a little too giddy about the prospects for more hard-line negotiating, and liberals too depressed about the same. The supercommittee negotiation will be different than the debt ceiling negotiation in two important ways. First, the "trigger" of cuts to defense and Medicare is far less frightening to Democrats than the trigger of exploding the U.S. economy. Democrats succeeded in excluding programs for the poor from the trigger, specifically to make the cost of gridlock bearable.
Second, it's worth recalling that the Obama administration did insist that large entitlement cuts could be part of the budget deal only if Republicans agreed to higher revenue. Obama did hold that line. Agreeing to cut entitlements without new revenue would be crossing a different line, and it would represent a massive defeat for Democrats, as well as a political debacle.
It's also worth noting that the Republican position is, on its face, totally absurd. That position holds that no additional revenue at all can be considered. If we take them at their word, Republicans would turn down a compromise offering one dollar in higher taxes in return for a trillion and a half in entitlement cuts. That's obviously an extreme case, but what about cutting a few billion in oil company subsidies? A couple hundred billion in other loopholes?
That sets up the same contrast that existed during the debt ceiling showdown -- Republicans defended a vastly less popular position. Raising taxes for the rich and closing corporate tax loopholes is popular, even to a degree among Republican voters. Cutting entitlements is unpopular, even among Republicans. Democrats won the public opinion fight but couldn't press their advantage simply because they were terrified of a failed negotiation. In this instance, the Obama administration set the terms of the negotiation specifically so that failure would not terrify them.
They certainly might cave again. And Republicans probably won't agree to anything passable. But I do see gridlock or a deal with a reasonable level of revenue as more likely than another total Democratic cave in.
11 comments
Thiis is a very perceptive post, Jonathan. The crazies won't be holding a gun to our collective heads, and therefore, gridlock is much more likely from this procedure.
- liberalref
August 2, 2011 at 1:49pm
I think the under-appreciated point in the post-mortems of the debt ceiling debate is how the perceptions of who won and who lost is going to affects both sides' postures and motivations. Perhaps it's going into pschychobubble territory to think that perceptions of win or loss will affect the mental makeup of the negotiators, but it's also fair to say that those perceptions will also probably come with explicit political repercussions. What I am saying is that the perception that Dems lost and Republicans won will probably make Republicans complacent and not alter their tactics, while the Dems will have an extra incentive to play hardball and not badge while adjusting their tactics in order to at least look as winners next time around. And they have to do that, because the Democratic base's alienation creates the risk -especially for Obama- of losing support or passion among the party's core; all of that during an election which is shaping up to be a rather close one.
- Hobbes
August 2, 2011 at 2:05pm
The supercommittee is an attempt to insulate Congress from the choices that they know they have to make to cut the national debt, if they don't raise taxes, but will get them thrown out of office by the electorate who wants the popular programs that are on the chopping block. Since the whole goofy mechanism is a product of Republican intransigence, I predict that when the numbers come out and the trigger is about to hit the hammer on the bullet, the bullet will have "Republican" written on it.
- Nusholtz
August 2, 2011 at 2:07pm
The Republican leaders don't expect the Dems to fold on this one. The Democratic coalition would fracture if they folded on entitlement cuts without revenue. I think the GOP believes they will win the political battle after the inevitable stalemate. In effect the argument will be, "Obama and the Dems wanted to raise taxes so badly they were willing to expose us to our enemies by slashing defense AND make it harder for granny to see a doctor by slashing medicare." They think Dems and Obama will own the fallout of the committee stalemate
- Archon
August 2, 2011 at 2:25pm
I think this would all be much easier to work out, if Obama begins NOW blaming the "Republicans" (instead of "Congress" as he tends to do) for holding America Hostage. I know, he probably considers this "rude", and will be accused of "poisoning the negotiations". But the Republicans routinely blame "Democrats" and NOT "Congress" for everything going on, and THEY are not accused of "poisoning the pot" or being "rude". The problem is, with the President's approach, all of America becomes pissed off at Congress for not doing more. Instead, all of America should be becoming pissed off at the Republicans, for not allowing more. THAT is the kind of leverage it will take to get the Republicans to behave responsibly. And if they STILL refuse to behave responsibly, America will finally have an accurate target to blame. Instead of blaming "all of Congress" as they are now.
- AllanL5
August 2, 2011 at 2:42pm
It's easy to forget that there still is a gun held to the head of the U.S. economy. $1.8 trillion in spending cuts, even if part of that hits defense, is still going to have a catastrophic impact on the economy - not as horrible as if it hit Medicaid, food stamps etc., but still a very hard hit that's strong enough to gut demand for domestic goods and services. The problem is, that gun's going to get fired one way or another, with or without gridlock.
- whyamihere
August 2, 2011 at 3:22pm
I expect there to be gridlock. I can never imagine the GOP'ers on this commitee to agree to any revenue. This is the holy grail.
- MikeB.
August 2, 2011 at 3:34pm
- They need to be in the spotlight for not bargaining in good faith as soon as they're named. It won't be tough: I expect we'll get Republicans who signed Grover's pledge. Good, scream and keep screaming that oath is in conflict with their responsibility to carry out their constitutional duty on the committee. They can't prove it's wrong but nearly 70% of all voters prefer a revenue increase and now they're tainted with suspect loyalties unless they repudiate the pledge.
- michaelg
August 2, 2011 at 3:37pm
Hurray for divided government! What a brilliant idea!
- GSpinks
August 2, 2011 at 5:21pm
Hennessy's argument seems like wishful thinking. The Democrats would accept $1.5T in cuts to their programs instead of half of that and the other half to defense because ... why? He gives no reason, and it is hard to see why the Democrats would agree to such a crap sandwich, or why Obama would not veto it. Yglesias at least tries to give a reason for folding, but the lobbyists would have to get to Obama as well (he should promise to veto any plan that is "unbalanced" or lacks "shared sacrifice"), and the same lobbyists would have to give the Republicans a free pass. If our people are as completely spineless as Yglesias suggests, then we'll deserve what we get.
- JEFF FREY
August 2, 2011 at 5:34pm
I'll tell you why, Jeff, because $800 billion in cuts to non-Social Security, non-Medicare, non-defense spending would be crippling. Dems might be able to hold the line on not cutting Soc Sec or Medicare, but I don't think that would much faze the Republicans. They'd just force the triggered cuts. They care a hell of a lot less about defense cuts than Democrats care about non-defense cuts. The Republicans would view it as a golden opportunity to gut EPA, Interior, FCC, FAA, OSHA, NOAA, ATF, DOJ and all those other agencies full of pesky regulator types and pointy-headed experts, aka parasites. When you think about it, the bulk of defense spending goes for salaries and benefits anyway. Only a tiny proportion of military personnel actually carry weapons in combat zones. It's not at all inconsistent with Republican priorities to disengage a couple hundred thousand uniformed servicepeople from the Federal teat.
- AaronW
August 3, 2011 at 9:24am