As we all go down our various rabbit-holes in trying to understand the fiscal crisis situation, much of which seems to be playing out in John Boehner’s nicotine-soaked brain, it’s appropriate to step back and look at it all from a broader perspective.
What’s ultimately going on here is that congressional Republicans (and their “conservative base”) are determined to do something big on “entitlements,” despite their loss of the White House and the Senate in 2012. Yes, they are strategically divided between conventional conservatives pursuing Paul Ryan’s well-trod path of indirectly undermining the entitlement status of Social Security, Medicare and Medicaid though stealth and gimmicks, and Tea Folk determined to make a frontal assault on Obamacare as the “tipping point” after which America lurches into socialist slavery. But it’s all part of the same big policy goal of stopping any extension of the New Deal/Great Society legacy and then reversing it.
But the Republican obsession with their version of what is so imprecisely referred to as “entitlement reform” is exceeded by another obsession of theological dimensions: opposition to high-end tax increases. Their nemesis, Barack Obama, has refused to give them “entitlement reform” (even a pale version of it) without high-end tax increases. So they are stymied unless fearful liberals are correct that Obama will, with enough pressure, cave and give GOPers what they want without what they refuse to accept as a price. This whole hostage-taking exercise is a test of whether they can generate enough pressure to make Obama surrender his iron equation of “entitlement reforms” and tax hikes. That’s what the current Republican demand for “grand bargain” talks is really about, as Ezra Klein noted this morning at Wonkblog:
Republicans don’t want to raise taxes. They want to get the spending cuts they support in return for nothing. And that’s what the shutdown/debt-ceiling fight is about now. The Republicans believe that instead of trading taxes for entitlement cuts they can trade reopening the government and raising the debt ceiling for entitlement cuts. Since they actually support reopening the government and raising the debt ceiling that means they’re not trading anything at all.
But it’s not working out for them. Right now the big question is whether Obama will agree to budget negotiations if they are linked explicitly or implicitly to a threat to keep the government shut down or to default on the debt. So what if he “caves?” Does that get Republicans “entitlement reform” without a tax increase? No, not unless Obama caves again during the actual negotiations. And remember this: any “grand bargain” would have to be approved by Congress, which is composed of Democrats who will fight the kind of “entitlement reform” Republicans want to the last ditch and Republicans who will do the same to kill any tax increase. (BTW, this kind of “grand bargain” is certain to be unpopular with the public as well).
So forget about what DC pundits and the No Labels folk are saying: we are no closer to a a “grand bargain” than we were before all this nonsense started. Yes, Republicans may be able to pocket a continuation of sequestration as a “win,” and who knows, to resolve it all Democrats might accept a symbolic swipe at Obamacare like repeal of the medical device tax (which many of them dislike anyway). But the big maneuver to force actual policy concessions on spending, as opposed to negotiations that are doomed to fail, has already, it seems, run aground. And it remains to be seen how much damage Republicans have inflicted on themselves in terms of public credibility and the confidence of the business community.