I admit it: I expected House Republicans to reject the last-minute Biden/McConnell deal (that passed the Senate 89-8) and send us over the fiscal cliff.
Instead, they did one of those having-it-both-ways things that makes people despise politicians: Within their own caucus, Republicans voted to let the bill come to the floor, where (led by House Majority Leader Eric Cantor) most of them voted against it. So they knew it was necessary and wanted it to pass, but they also wanted to be able to deny supporting it.
The WP’s Wonkblog summarizes what’s in the deal and charts how it affects the national debt. (Short version: The tax hikes and spending cuts that constituted the fiscal cliff would have cut the annual deficit more, but this is a middling path between that and the status quo.)
The chart on the right has way too much jargon, but it’s showing debt-as-a-percentage-of-GDP over time under various scenarios. The top line is roughly cancel-the-fiscal-cliff-and-let-things-go-on-as-they-were and the bottom is go-over-the-cliff. The red, green, blue, and purple lines are where we’re headed now under various scenarios.
So who won? Nobody yet. This deal solved the question of the Bush tax cuts, but it delayed the spending-cut decisions until March, when they will run up against another debt-ceiling showdown.
Republicans are claiming that the debt ceiling is a better battleground for them, and believe they’ll get the kind of concessions out of Obama that they got in 2011. Obama thinks the public was disgusted with the 2011 shenanigans and won’t stand for the Republicans taking the world economy hostage again. (Until 2011, raising the debt limit was an opportunity to score rhetorical points, but no one ever seriously proposed not doing it or extracted any concessions in exchange for doing it.)
So who won in this deal depends on who is right about their advantages in the next deal. Greg Sargent writes:
the major fight at the heart of this whole mess — over the proper scope and role of the safety net of the 21st century, and who will pay for it — remains unresolved. Only the outcome of that battle can settle the question of whether today’s compromise was a good one for liberals.
And Kos of Daily Kos agrees:
Whatever argument we’re going to have, it shouldn’t be whether this deal is good or bad. It’s over whether Obama will eventually cave or not.
I’d like to see Obama include an Eastwood-like make-my-day paragraph in the State of the Union: “You want to blow up the global economy if you don’t get your way? Go ahead. Show the world what kind of people you really are.”
I think this is a necessary and (eventually) inevitable confrontation. For that reason, I’ve soured on tricks like the trillion-dollar coin to finesse around the debt ceiling. Kevin Drum explains how that trick distorts the intention of the law, and so puts Obama in the position of trying to pull something rather than calling the Republicans on pulling something. I don’t want him to sacrifice his integrity to avoid paying blackmail; that’s just another kind of blackmail payment.
Meanwhile, Republicans are trying to minimize the consequences of not raising the debt limit. Senator Cornyn writes:
The coming deadlines will be the next flashpoints in our ongoing fight to bring fiscal sanity to Washington. It may be necessary to partially shut down the government in order to secure the long-term fiscal well being of our country, rather than plod along the path of Greece, Italy and Spain. President Obama needs to take note of this reality and put forward a plan to avoid it immediately.
(President Obama, of course, has put forward a plan: Congress should raise the debt ceiling the way it always did until 2011.) And Senator Toomey said:
A temporary disruption because we have to furlough the workers at the Department of Education, or close down some national parks, or not cut the grass on the Mall, that’s not optimal, it’s disruptive, but it’s a hell of a lot better than the path that we’re on.
The problem is temporary and minor only if you assume that Obama quickly folds once he discovers that Republicans are serious. But what if Obama is serious too? The 14th Amendment (section 4) requires that the government keep paying interest on its debt and principle on bonds as they come due. But how long before we have to shut down the National Weather Service or the Center for Disease Control or the TSA?
I’m glad to see I’m not the only one who’s reminded of one particular movie scene. Greg Sargent quotes an email he got from former Solicitor General Walter Dellinger:
The whole thing reminds me of the great moment in “Blazing Saddles” when Sheriff Bart takes himself hostage by pointing a gun at his own head. The simple townsfolk of Rock Ridge were dumb enough to fall for it. Are we?
The Tea Partiers have talked themselves into the idea that this would be the Lesser Apocalypse compared to the spending binge that is about to turn us into Greece. Kevin Drum debunks:
The facts are pretty clear. Spending isn’t our big problem. The recession spike of 2008 aside, it’s about the same as it was 30 years ago. But instead of paying for that spending, we’ve repeatedly cut taxes, which are now at their lowest level in half a century.
You’ll see an early sign of who’s going to win in how the mainstream media identifies the hostage in this crisis. If the hostage is “government” — a separate entity unrelated to the rest of us — then the Tea Party will win. If the hostage is “the country” or “the economy”, then Obama will win.