The Debt Negotiations: When An Irresistible Force Meets A Moveable Object

If as the LA Times is reporting, Speaker Boehner and President Obama are working on a plan that would link a raise in the debt ceiling to some $3 trillion in spending cuts – and without any revenue offsets – it would represent still another concession by Obama to the Republicans in these ongoing negotiations.  After pledging not to support another short-term extension in the nation’s borrowing limit, Obama reversed course this week and signaled that he would accept still another extension if there was progress on a broader deal and it was necessary to prevent an immediate default.  Now, if reports are accurate, he appears willing to cut a deal on spending as part of a “grand bargain”‘ that includes entitlement reform, but without any provisions for tax increases.

When word leaked that Obama was considering a deal to cut spending without any firm revenue offsets, liberal Democrats were reportedly outraged. “Many of us were volcanic,” said Sen. Barbara Mikulski (D-Md.).  If Obama does sign on to such a deal, pundits on the Left will undoubtedly excoriate him for folding like a cheap suit in these negotiations.

But that would be unfair to Obama. No one should be surprised that he is apparently willing to make the concessions necessary to secure a deal. As I have said repeatedly, he is a process-oriented pragmatist – not a principled ideologue. To Obama, effective leadership means mediating differences to achieve an outcome that has the broadest possible support.  He is not wedded to any particular set of principles or numbers here so much as he is cutting a deal to avoid default.  If, in addition to cutting spending it addresses entitlement programs as well, what’s not to like?  This is a major accomplishment for the President – one that eluded Bush.

In contrast, Boehner is dealing with a group of Tea Party-backed ideologues who are driven by principle, not pragmatism. They were elected to cut spending, not raise taxes.  And they are not going to budge from that. Critics like Ross Douthat and David Brooks who can’t understand why Republicans didn’t take a deal that involved spending cuts that were three times bigger than tax raises are missing the dynamic driving these negotiations – a dynamic that Obama recognizes all too well.

In short, when an irresistible force – the Tea Party-backed fiscal ideologues – meets a moveable object – a President guided by political pragmatism more than principle – the moveable object moves.  Purists will howl, but Obama is not a party purist.  He came to Washington to get things done.

Moreover, keep in mind that Obama has another card to play.  If he can get spending cuts now in the context of a major budget deal that addresses entitlements, he is gambling that will be enough to get him elected in 2012, at which point he can make his principled stand on revenue by refusing to renew the Bush tax cuts for upper income earners.  In short, political pragmatism dictates deal making now – even deal making on Republican terms, for the moment.

It is premature, of course, to assume a deal will get cut on the terms discussed in this article. Liberal Democrats in the Senate may scuttle any plan that doesn’t include tax hikes or  revenue  increases as part of entitlement reform.  But at this point the negotiations have already moved solidly into Republican turf, with the emphasis on spending cuts, not tax hikes.

Where do negotiations go from here?  I expect that, Obama’s stated objections notwithstanding, a short-term extension of the debt limit will be agreed to shortly, while negotiations continue on a plan that entails deep spending cuts coupled with entitlement reform and with minimal, if any, tax increases.  By minimal, I mean closing of deductions, eliminating subsidies, and curtailing exemptions – but not a hike in tax rates.  This is still a long way from a done deal, of course.  But if the deal is struck, it will be largely on Republican terms.  Pundits on the Left will howl.  And that will be fine with Obama.

4 comments

  1. I agree, Professor. Cuts now could lead to votes later. Votes later may provide an opportunity to allow the tax cuts to expire for the over-$200,000 crowd. If the Democrats were smart they would let this savvy president get to work. If they are shortsighted (more likely) they will undo him with senseless rhetoric. How fascinating.

  2. Addi – Of course, all we can do is speculate without truly knowing what is being negotiated, and by whom, but I think you’ve captured Obama’s calculus accurately enough. The key for him is to convince the Democratic Left to let him cut a deal now, with the promise that they get a tax hike later, after the election. It will be a good test of his persuasive skills.

  3. process-oriented pragmatist?

    He is an election-minded politician. Reducing the debt
    without raising taxes gives him the best chance to win.
    All he needs to do is to put his right foot forward and step on those lefties.

  4. Our respective characterizations of Obama’s motives are not inconsistent. By process-oriented pragmatist, I am suggesting that his negotiating strategy is driven not by principle so much as by a desire to strike a deal which, as you note, will pay electoral dividends. I am less sanguine than you, I think, regarding how easy it will be for him to “step on those lefties”. They have their own electoral calculations that may drive them to oppose any deal that doesn’t include revenue increases.

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