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The Anatomy of a Compromise From Hell

I just recovered from my weekend hangover celebrating our reward for raising the debt ceiling in August.  All good things are worth waiting for, and after three and a half months, we got our vote on a balanced budget amendment!  And you know what?  It was summarily defeated, even before it came to the Senate.  Oh, and 25 of the most vulnerable Democrats now have austerity-proof records to shield them next November.

Oops.

We who opposed the debt ceiling deal and the budget bills this year have been censured as intransigent rubes incapable of compromise.  While the mantra about the need for compromise is in itself quite dubious, let’s discuss the virtues of a true compromise.

As the year comes to a close, it is important to reflect upon the results of the multiple “compromise” deals.  Even ‘purists’ like us support the idea of a real compromise, just not a capitulation.  A real compromise is one in which our side would gain substantive results, albeit not everything that was desired.  Moreover, the degree to which a compromise is considered a success is largely determined by the magnitude of leverage that we have going into the debate.  In the realm of politics, that leverage is most profoundly affected by public opinion and electoral reprisal.  By that measure, we should have accrued a year of supreme success.

Over the past two years, Americans have shown an unparalleled appetite for sweeping imminent budget cuts.  Consequently, the overarching issues of the 2010 election were opposition to Democrats’ profligate spending and Obama’s massive new budget-busting entitlement; Obamacare.  The electorate empowered Republicans for the express purpose of cutting spending and repealing Obamacare.  Every public opinion poll confirms a majority support for both of those goals.

Additionally, while Democrats suffered historic defeat in 2010 for promoting decadent spending and new entitlements, the 2012 elections may be cataclysmic for them.  Democrats are facing one of their worst election cycles in the upcoming Senate elections.  They must defend 23 Senate seats, eight of which are in states that were carried by George Bush and are hostile to Obama’s agenda.

Bolstered by these electoral tailwinds, Republicans pledged to defund Obamacare and achieve transformational budget reforms, which would bend the trajectory away from insolvency.

So how effectively did they harness their unprecedented level of public support?

In December 2010, during the lamest of lame duck sessions for the bludgeoned Democrats, Republicans snatched defeat from the jaws of victory.  Although extension of the Bush tax cuts would have been considered a pipe dream back in 2009, the 2010 elections had dramatically altered the dynamic.  Obama simply could not have raised taxes in middle of a de facto recession.  As such, full extension of the tax cuts should have been the floor – the starting point for negotiations.  Nevertheless, Republicans let Obama believe that he was giving them the world by extending the tax cuts.  To that end, they agreed to revive the death tax, albeit with a higher exemption (making it harder to repeal in the future).  They also agreed to extend ethanol and green handouts, a staggering 13 months of additional unemployment benefits, and a payroll tax cut that would necessitate a $106 billion transfer of general fund revenues to the SS Trust Fund.  To make matters worse, individual members of the party helped Democrats pass START, repeal DADT, and impose an FDA takeover of the food industry.

This needless show of weakness on the part of Republicans granted Obama a temporary, but sharp spike in approval.  That sure was a magnanimous gesture to the party that had just been vanquished by the voters.  But hey, these were just the old guys; wait until the new “Tea Party Congress” shows up, we were told.

Republicans came into power promising to end Democrats’ unfinished FY 2011 budget by cutting $100 billion, in addition to defunding Obamacare, parts of the EPA, Planned Parenthood, and public broadcasting.  As always, they started out with a bang, introducing their budget bill (HR 1) under an unprecedented open rule.  The bill defunded those four entities, but oddly trimmed only $61 billion in baseline spending.  In what would turn out to be an ominous pattern for the rest of the year, Republicans chose a watered-down version of their initial pledge as a hill to die on…and then failed to die on it.  Ultimately, as they telegraphed to the Democrats an incorrigible fear of a government shutdown, they caved on every major policy rider, including Obamacare.  Furthermore, the final 2011 CR only cut $37 billion in baseline spending and $352 million in non-Washingtonian spending.

Nonetheless, the FY 2011 budget was old hat and small potatoes; just wait until the debt ceiling battle and the FY 2012 budget, we were promised.  “Then we’ll be talking about trillions.”

In April, after passing a budget resolution (the Ryan budget) which, more or less, fulfilled their election promises, we all relished the opportunity to fight for its major provisions later in September.  In addition, the July battle over the debt ceiling gave us another point of leverage to exact transformational change from Democrats in return for an increase in the debt ceiling.  Originally, Republican leadership tantalized the base by coalescing around Cut, Cap, and Balance.  Then, a week before the deadline, there was an insidious effort to ambush CCB with a Trojan horse Gang of Six proposal – a plan that was never intended to become legislation.  It allowed Boehner to gut CCB for a plan that would raise the debt ceiling in two tranches and create an 18th debt commission.

At first, Boehner promised to make passage of a BBA a pre-condition to one of the tranches.  There was no intention of ever fighting for that provision, but it was necessary to force many conservatives into supporting the deal.  Eventually, we were left with a promise to vote on a BBA in return for giving Obama the entire increase.  As they say, the rest is history.

We all understand the necessity to compromise, but we would expect to enjoy benefits from such compromise that are commensurate to our superior leverage.  Let’s review the scorecard of the debt deal:

Benefits for Democrats

  • Obamacare is preserved and shielded from cuts
  • Obama-era discretionary and mandatory spending levels are permanently enshrined
  • All welfare programs are exempt even from baseline cuts
  • After accruing $4 trillion in debt, Obama gets green light to run up an additional $2.1 trillion
  • Obama doesn’t have to request another politically damaging debt increase – until after the election
  • The creation of Supercommittee charged with deficit reduction, not spending cuts, opens the door for tax increases, while endangering Bush tax cuts – an opportunity they would have never enjoyed
  • Failure of Supercommittee leads to automatic cuts in defense – an opportunity they would have never enjoyed
  • Dems are not forced into transformational change with passage of BBA
  • The deal overwrote the entire Ryan budget, obviating any further GOP leverage on budget policy for the rest of the year

Benefits for Republicans

  • $917 billion in baseline discretionary cuts over 10 years
  • The creation of 18th debt commission is somehow the Republican part of the deal
  • There is a required vote on a BBA
  • The only saving grace is Phil Gramm’s jujitsu plan to preempt sequestration with an alternative privileged amendment that repeals Obamacare with a simple majority.  Will they have the guts to use it?

As The Hill reporter Molly Hooper noted last week, “Democrats’ Satan Sandwich is starting to taste pretty good.”

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