Here's How the Shutdown Standoff is Going to End

by Noam Scheiber | October 3, 2013

The current thinking inside the alternate reality known as the House GOP is that Republicans will try to combine the fight on the continuing resolution (which would reopen the government) with the debt limit fight (which is necessary to avoid a default) and insist on a fiscal grand bargain (presumably a deal that cuts trillions in spending) as the price of doing both.*

This is of course complete lunacy. House Republicans see the new approach as a sign of their willingness to compromise. “GOP lawmakers have rolled back their demands significantly,” Politico reports. “[T]hey wanted to completely defund the health care law. … In a large-scale deal, Republicans say they could settle with a repeal of the medical device tax if there’s enough savings elsewhere.” But what the Republicans are essentially demanding now is a repeat of the 2011 arrangement, in which they refused to raise the debt ceiling until Obama agreed to cut trillions in spending. That’s a strange notion of compromise, given that the 2011 saga had disastrous short- and long-term effects on the economy (rattling financial markets, giving us that sequester), and given that Obama is in a far stronger political position today, having won re-election, and with the Tea Party having lost any sheen of popular appeal.

On the other hand, this particular piece of lunacy may hold out the first hope of an end to the standoff, and one that gives Obama an overwhelming victory. As Obama reiterated on Wednesday, he’s always been willing to negotiate on a fiscal deal as long as the GOP drops its blackmail tactics.  “As soon as we get a clean piece of legislation that reopens the government,” was how he explained the timing of potential talks to CNBC. “Until we get that done, until we make sure Congress allows treasury to pay for things that Congress itself already authorized, we are not going to engage in a series of negotiations.”

So how is this apparent null set remotely promising? Because Republicans are implicitly acknowledging that their strategy of refusing to open the government or raise the debt limit unless the president walks back Obamacare is a complete dead-end. The GOP leadership appears to realize that, since there is no conceivable endgame that gives them Obamacare concessions, continuing to focus on Obamacare means there is no conceivable endgame that doesn’t make it blindingly obvious they’re surrendering. After all, even the dimmest bulb in your caucus can tell you’re retreating when you throw the car in reverse and back straight down the street you drove up.

The challenge, then, is to come up with a way out of the dead-end that isn’t just the reverse of the way they drove in. And that’s where the fiscal negotiation comes in. If the GOP can essentially fold on everything Obama insists they fold on, but come away with some deficit-related totem that gives the Tea Partiers the impression they won something—well, that wouldn’t look so much like a pure retreat. That’s where Boehner appears to be headed, even if he won’t admit it yet.

What would that totem look like? In essence, I think Obama can basically give Republicans a trumped-up, impressive-sounding version of what he’s already offered: You guys reopen the government and raise the debt limit, and then I will dispatch my vice president and my entire economic team to negotiate face-to-face with Paul Ryan over a long-term deficit deal every week for two months (or whatever), after which they will report back to me, and John Boehner and I will discuss what they’ve come up with. Obama would have essentially offered no concessions for the reopening of the government and the raising of the debt limit. He will have committed to no cuts and no deficit-reduction targets of any kind. But he will have given Boehner a fig leaf that he can show his rank and file to persuade them that this whole suicide mission wasn’t entirely futile.

What Obama can’t do is offer any substantive concession in exchange for reopening the government, or any concession at all (substantive or not) for agreeing to raise the debt limit. As the president and others have observed, capitulating on this point would completely upend our system of government, allowing the opposition party to impose an agenda it has neither the votes nor the popular support to enact.

Fortunately, I suspect Boehner increasingly understands this. Members of the GOP leadership have publicly said they think combining the continuing resolution (CR) and the debt limit maximizes their leverage. This is a strange proposition, since there’s no reason Obama should be more inclined to make concessions for a package of measures than its constituent parts.** (If I tell you I’d pay zero for your steak knives and zero for your food processor, why would I pay $25 for them together?) In reality, this looks to me like a bet by Boehner with no real downside: If it turns out Obama is bluffing about refusing to negotiate, then Republicans get to save face on the shutdown and extract some concessions for the debt limit. And if, as seems nearly certain, Obama isn’t bluffing, then Boehner has found a way to end the crisis by diverting the Tea Party’s attention to the fiscal negotiations that come after it. I can live with that.

Noam Scheiber is a senior editor at The New Republic. Follow @noamscheiber

 

*Sentence slightly updated 

**The only leverage the GOP has is the sequester, which Democrats clearly dislike more than Republicans. But that leverage only helps Republicans get Obama to the bargaining table on a longer-term fiscal deal, where the sequester could presumably be replaced by other cuts and revenue increases. The sequester doesn’t give the GOP any leverage in the CR or debt limit fight, since neither passing a CR nor raising the debt limit would in itself do anything to alleviate the sequester. (In fact, Democrats have already accepted the sequester level of government funding in the CR. Raising the funding level would mean the GOP is making concessions, not receiving them.) 

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