Erick has been correct in calling the McConnell plan a Pontius Pilate pass-the-buck sellout. I have harshly criticized his bad idea.

However, we should NOT overstate the loss here, should the GOP go the Mcconnell route, nor should that lead to worse outcomes down the road. McConnell genuinely believes:
1. The Congress could not get a GOOD deal out of the President, as any big deal meant tax hikes
2. The negotiations had not gotten obama to come forth with a specific plan, and would not do so.
3. The Congress would not and should not go past Aug 2nd without a debt ceiling raise, since the alternative would have many negative consequences for the economy and for the Republicans politically.

On #1 and #2, McConnell is right, and conservatives have said as much: We can never get a ‘good’ deal out of Obama, our visions are vastly different.

This last arguable point is the key sticking point. Many of us want to stand ground, insist on a good deal or no deal. And given #2, that meant an almost certain ‘shutown/default’ … McConnell assessed the risks and options, and decided that pass-the-buck was the best way forward. He doesnt want default. All this inside-beltway-type calculation has led to a bad idea. But I am writing this, even though I dislike his proposal, to explain that overstating its downside and letting it cause a deeper rift in the GOP is making a small error into a larger one.

To assess the downside, ask: What better outcome can we expect?
The answer is that the BEST we could expect the Obama / Reid side to agree to was about $2 trillion in spending cuts in the deal, with no tax hikes. And even that number was a moving target, and press leaks over the Cantor/Obama tussle suggest. we were debating with jello.

Can we force cut, cap and balance? We’ll vote on it but the BBA is not likely to get 2/3rds. We dont run the Senate. Then what? Standoff? Yup. So we go to standoff and by mid-August social security recipients will be screaming and/or whoever else the Obama admin can use to make the situation politically painful. The uncertainty will be painful enough for the markets, etc. Will that environment lead to a BETTER outcome for Republicans? On this point, we need to take off our partisan hats and think coolly for a second; the pressure to ‘do something’ will be immense and the media/Dem complex will ensure the ‘narrative’ is disfavorable to the Republicans. Panic, at least among enough Republicans to cave and make a RINO/Dem deal, is likely.

In such an environment, we are NOT likely to get what we want, or even 50%.

Would the House and Senate GOP stand their ground? Could you get a majority or enough in House and Senate to stop something WORSE in a few weeks? If McConnell assessed ‘no’ then we need to consider that perhaps he gauged right. One might argue that it is a self-fulfilling prophecy, that RINO/squish/moderate/sellout/insert-label-here Republicans would not be firm now because, uh, they would not be firm later, but there it is.

We want our Republican leaders to be Braveheart-style warriors, but, alas, they are like the noble lords, ready to cut-n-run.

Rep Jordan made an astute observation on Sunday talk shows. He pointed out that the ONLY spending that this Congress can lock in place is FY2012 and first part of following year. About 15 months. Anything beyond that is changeable. Which means that any promises of spending cuts made in the out years really has little meaning except to change budget baselines that are changeable annually.

What this further means, if you analyze it thoroughly, and if you take tax increases off the table: The main ‘concessions’ we can extract for the debt ceiling increase is reducing the FY2012 budget. THAT is our leverage. THAT is the gain possible. $2T or $4T or $9T in cuts matters less than the simple question of: What will we spend between now and the next election?

But that begs a question: Won’t we be able to extract those concessions through the FY2012 budget process itself?

The answer is YES.

The final outcome of the analysis is this: McConnell’s plan will, if strengthened by the Reid addition of $1.5 trillion in ‘cuts’ (ala Biden) be a ‘deal’ not that much worse than the Biden talk deal, that is, worse, but not significant downside from the dishwater-deal they were going to come to anyway. It’s a ‘deal’ that cuts the Republican ‘losses’ from potential panic post-default, ensures that Republicans arent blamed for a default, and at the same time closes off the opportunity for real fundamental shift in fiscal policy.

But is that opportunity cost real? The fundamental failure of McConnell-Reid to deal seriously, long-term with our over-spending is not as much due to Republican cravenness than it is a structural result of Obama in the White House and Reid running the Senate. With them in power NO REAL REFORM IS POSSIBLE. The ‘opportunity cost’ of fiscal responsibility is an illusion. We cant get there, yet.

The loss? In REAL terms, the loss was an opportunity to get FY2012 done on conservative/Republican terms. We had limited leverage there, and could have done more. And yet, FY 2012 budget awaits. EVERY SPENDING POLICY DISCUSSION CAN AND WILL BE REGURGITATED IN THE FY2012 BUDGET DEBATE.

IT ALSO REMAINS THAT CUT, CAP AND BALANCE ARE VIABLE POLICY PROPOSALS THAT CAN BE PUSHED VIA THE FY2012 BUDGET FIGHT.

So my final advice is: Don’t let the family quarrel over McConnell’s pass-the-buck deal lead to divorce.
Keep your eye on FY2012 spending, the main thing we can really change with Obama in the WH. Keep the cut, cap and balance idea alive – it WILL pass the House, and if we dont press it now to success, there are other times to press it and elements to get through as part of any ‘deal’. Counts the heads of who stands firm and who quakes; we will need to do the weeding out process in due course – IN THE FAMILY (aka in the primaries).

Stay with the Republican party and stay with unified conservative agenda items that can win. Be firm but not brittle, for that way begets strength.