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Wednesday, July 13, 2011  

They're Not Making a Deal Because They Don't Want a Deal

Ross goes long on unicorn futures today:

Some of the same factors that make this a good time for Republicans to take the hardest possible line (a Democratic president who wants a conservative-seeming deficit package, the likelihood that future tax increases are in the offing with or without Republican concessions this time around, etc.) also make it a good moment for Republicans to go for a big deal rather than a small deal, even if the big deal is somewhat less than ideological pure.

This is all very clever, but it's just comically disconnected from the politics on the ground. The Republicans aren't making a deal, big or small, because they don't want a deal. With two to four trillion dollars in medium-term deficit reduction on the table, split perhaps 80-20 between spending cuts and revenue increases, no Republican has given any indication of having any interest in saying yes.

I hate to break it to Ross and everyone else out there, but any 'big deal,' or any deal of any kind for that matter, is by definition 'somewhat less than ideological pure.' That is what a deal is. I would like to get my falafel sandwich for free and Sultan's Market would like to charge $20 for it. But if I insist on free falafel and they insist on $20, I get no sandwich and they get no money. So I spend more than I'd like and they charge less than they'd like and we both get something, though less than what we would have if we didn't have to make a deal. And if the Republicans ever get the White House, keep the House, and get to 60 senators, they'll be able to dictate the shape of fiscal policy to their heart's content. But given the institutional set-up we have, the only way to make policy changes on contentious issues is to make deals, and the only way to make deals is to compromise on ideological purity.

So the interesting question, it seems to me, is not "what is the optimal Republican strategy for getting a deal that minimizes revenue increases relative to cutting health care for the poor and old?" but rather, "why are the Republicans insisting on free falafel?" This is not a new question. It was clear from the summer of 2009 on that Democrats in the Senate and White House were desperate to get Republicans to sign on to the Affordable Care Act. Republicans could have extracted whatever concessions they wished: stingier minimum benefits, less generous subsidies to the uninsured, more regressive revenue streams. But they didn't. They didn't make a deal because they didn't want a deal.

I suspect this is and was because they don't want to give the president a political victory. They think the country will be better off if he loses re-election and Mitt Romney is the one in the Oval Office in a year and a half. The other plausible explanation is that they are far more committed to low taxes on wealthy people than they are to deficit reduction per se. The first thing Bush did in 2001 was cut taxes in an overwhelmingly regressive way. The first thing the Republicans did after the 2010 mid-terms, even during the lame-duck session, was to insist on continuing those tax cuts for the upper brackets. If these tax cuts can be financed by cuts to Medicare, Medicaid, and Social Security, that's great. If they can't, they're happy to keep borrowing.

That, at least, is the expressed preference of the modern GOP. All the deficit talk falls away when it's time to make a deal, even on terms that are absurdly favorable to their stated concerns. That's why I've started to suspect that we'll end up with a 'clean' debt-limit increase, and we will over and over again as long as revenues are part of any deal that goes along with it.

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posted by Benjamin Dueholm | 9:51 AM
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