Sunday, July 31, 2011

Sometimes brinkmanship works

It looks like the Senate and House leaders have come up with a deal. Major Garrett at National Journal has the details. Jennifer Rubin and Jonathan Karl at ABC News seem to have the same information.

First, some short-term extension will be passed in order to give both sides to solidify the details of their agreement and to get the compromise voted on and passed in both houses.

Then here are the outlines of the deal as Major Garrett reported them.
* $2.8 trillion in deficit reduction with $1 trillion locked in through discretionary spending caps over 10 years and the remainder determined by a so-called super committee.
* The Super Committee must report precise deficit-reduction proposals by Thanksgiving.
* The Super Committee would have to propose $1.8 trillion spending cuts to achieve that amount of deficit reduction over 10 years.
* If the Super Committee fails, Congress must send a balanced-budget amendment to the states for ratification. If that doesn't happen, across-the-board spending cuts would go into effect and could touch Medicare and defense spending.
* No net new tax revenue would be part of the special committee's deliberations.
This is basically the deal that Boehner and Reid had worked out last weekend before Obama blew up that deal giving us the drama and silliness of this past week. Some leadership from Obama, eh?

This seems a lot closer to what Boehner had wanted than what either Obama or Reid had pushed. Boehner had to give up the staging of the deal into two parts so that we would have to raise the debt ceiling again before the election. Since that seemed to be the major concern of the Democrats, they gave in on the other parts: having a bill with spending cuts only and no increases in tax revenues. The GOP House members who regard a vote on a BBA as a dealmaker get that vote. It won't get the two-thirds necessary, but they'll have an election slogan to beat the Democrats with. We don't have McConnell's too-clever-by-half gimmick with Obama getting to raise the debt ceiling unless two-thirds of Congress vetoes it. Instead we get the super committee that Boehner had been pushing for. And to make sure that the super committee's proposals get their fair hearing, there is the cudgel of automatic cuts in the background to keep people serious.

Karl reports that the automatic cuts would take more from Defense than Medicare and the Medicare cuts would come from providers, not beneficiaries. The Republicans won't like that at all and it may provide a reason for many not to vote for the deal. We're already making it too unattractive for providers to keep on providing Medicare service and squeezing them all sorts of new ways through Obamacare; at some point we're going to have to look at benefits. Optimally, we would change the whole system as the Ryan plan does, but there is no way that is getting through Congress now.

Remember where we started with this whole debate back in the Spring. Obama and the Democrats were demanding a clean bill. They gave up on that. Then they were pushing for a balance between spending cuts and tax increases. Obama seemed to be hanging everything on the tax cuts for private-jet owners as if cutting out a provision in his own stimulus bill would raise anywhere in the ballpark of the kind of money we needed. The Democrats have given in on all of that so that the negotiations took place on the GOP battlefield - arguing over the amount and make-up of spending cuts. We'll have to see the final outline to see where the first part of that $1.2 trillion in cuts come from. Are they all backloaded and made up of gimmicks? Hopefully, Boehner has learned his lesson on that and will have cuts closer to his second proposal. We'll have to wait to see that.

Once the Democrats made it clear that the only thing they were willing to fight and die on was the necessity of saving themselves from revisiting this issue before the election, the GOP had the momentum to push the bill more to their side of that battlefield. The fact that they were the only ones to come up with plans and actually vote on them gave them a bit more street cred. Sure, that last Boehner plan with its totally ludicrous provision of demanding that the BBA be passed out of both houses was total symbolism, but if that is what it took to get his bill over the top, then it worked.

Given that neither side wanted a default and the Democrats were willing to cave in order to get this issue out of the way before the election, the GOP were able to go to the brink, hang tough, and come out with a deal that, in the end, is much closer to their original position than that of the Democrats.

Brinkmanship can be nerve-wracking and it's definitely not pretty. But sometimes it can be effective.

UPDATE: John Podhoretz likes the purported details coming out about the compromise.
If the details are true, and the deal holds, it’s an astonishing achievement for the Right—the most significant conceptual shift in American politics since Bill Clinton​ announced his support for ending welfare in 1996.
Meanwhile, he reaches for an instructive historical comparison to characterize the breaks among conservatives about how to approach our fiscal tribulations. He compares it to the debate among anti-Communists in the first Truman administration. There were those who wanted to rollback Communism everywhere that it had come into domination. And there were those who thought that rollback at that time was impossible so that it was better to contain Communism. The former regarded the latter as weak-willed accomodationist squishes.
The rollbackers thought containment was nothing short of capitulation. In 1952, a firebrand senator from California named Richard Nixon​ denounced those who had degrees from what he called “Dean Acheson’s cowardly college of Communist containment” as he ran for vice president on the GOP ticket with Dwight Eisenhower​. Acheson, a towering figure in American political and diplomatic history, had been Harry Truman’s secretary of state.

Today we remember Truman (and Acheson) as heroes of the Cold War​ for standing up to the Soviets, saving Western Europe from the advance of Communism, and being so stalwart that they committed U.S. forces by the hundreds of thousands to prevent Stalinist North Korea from breaching the laws of containment and subsuming the South. But to the supporters of rollback in 1952, they were sellout squish liberals and the unwitting (or witting!) agents of Soviet design.

The supporters of rollback were uninterested in the political reality of that moment. They believed the U.S. was locked in a titanic moral struggle literally between the forces of evil and the forces of good, and anything less than the commitment of all available resources to win the battle was a form of surrender. They were morally in the right, but practically in the wrong.
Eventually, the rollbackers won, but it took two wars and forty years of containment to accomplish that goal. Podhoretz sees Boehner and his supporters in the guise of the early containment advocates. And those who are harshly criticizing him for not accomplishing so much more are the 1940s rollbackers.
Everyone on the Right agrees that the U.S. is on an unsustainable fiscal path that must be altered. The difference comes down to the acceptance of political realities. Just as the United States could not effect rollback in the late 1940s (or any time thereafter), so too the Right and the Republican Party cannot effect a revolutionary change of course on July 31, 2011 with the Senate and the White House in liberal Democratic hands. The strategy, like containment, must have a longer time horizon, though it has the same goal: Ending the entitlement state before it swallows up the rest of the country.

The conceptual triumph of the Right is evident in two elements of the supposed deal. Take the fact that there are no new tax hikes. It was only 12 days ago that Barack Obama​ warned House Majority Leader Eric Cantor not to “call my bluff” and said he would go to “the American people on this.” He did; his poll numbers tanked. The “balanced approach” he advocated backfired on him even though he and his people continued to claim it had overwhelming popular support.

Now take the fact that in exchange for an increase in the debt ceiling of $2.5 trillion, there will be corresponding dollar-for-dollar cuts. That establishes a new budgetary precedent, a rational and sound one, on the question of the national debt ceiling, one that will restrain presidents of both parties as we go forward.
And just for those who will complain that this analogy sets the Democrats up as the communists, that is not what Podhoretz is saying. He places them in the role of the accomodationists who believed that anti-Communism was unrealistic and impossible goal. We should just go along and ignore what the Communists were and certainly not call them any bad names like "Evil Empire."
So who are Obama and the Democrats in my analogy? They are the accommodationists of the early 1950s (and their progeny throughout the Cold War) who declared that the anti-Communist right was a hornet’s nest of crazy people who would ignite a war and get us all blown up. They wanted peace and harmony and cordial relations with the Soviets and their proxies just as the accommodationists today want to put their heads in the sand and refuse to face the moral and political and fiscal threat emanating from the entitlement state. Whereas the rollbackers were wrong strategically but right morally, the accommodationists were wrong strategically and wrong morally.

But those who advocated containment were right strategically and right morally. And their descendants are right to support the debt-ceiling deal.