Monday, June 27, 2011

Walkout: Tactics or Intransigence?

The big unknown surrounding the GOP walk-out from the debt ceiling/budget deficit talks last week is whether this was a scripted part of a negotiating strategy or a sign of intransigence that could prevent a deal from being struck.

The conventional wisdom is that this was tactical. Up to now, the negotitations had been taking place on friendly GOP territory -- how much to cut from domestic discretionary spending. When the talks turned to items like defense cuts and tax increases (primarily by eliminating tax breaks, not increasing the personal or corporate rates), the GOP happily pocketed their earlier gains on spending and bolted. By playing hardball on defense cuts and tax increaseses, they can keep them to a bare minimum when the deal is finally struck.

There was also much discussion about how the GOP wanted to draw President Obama into the fray, making him participate in spending cut and tax increase talks, rather than allowing him remaining above the partisan tangle and claim to be for fiscal rectitude without being associated with specific proposals. Majority Leader Eric Cantor may also have been unwilling or unable to discuss issues that the majority of his caucus does not want to be contained in the final deal. If someone is going to breach the no-tax increase dogma, some believe Cantor reasoned, I'm going to let it be Mr. Boehner.

The punditocracy has bought into the "tactics" narrative and continues to insist that a deal will be struck because the consequences of failing to raise the debt limit are so dire. This is based on the establishment view that the system is not dysfunctional and that when deep challenges arise, our leaders stand up and do what needs to be done.

I have my doubts.

Yes, there was tactical stagecraft on display, which is part of any negotiation. Any parent is well familiar with this truism. But I continue to see in today's GOP a strong anti-tax intransigence, a belief that our deficit problems can be handled completely on the spending side, denial about the consequences of not raising the debt ceiling, and a strain of brinksmanship that reflects a willingness to go to the mat on principle. Democrats still shell shocked from the 2010 shellacking are playing a weaker hand. But they have drawn a line that tax increases must play a role in deficit reduction and will not be party to a deal where all or almost all of the concessions are on their side of the ledger. Litmus test politics is rampant out in the country, and now is the time in the political cycle when politicians are worrying about primary challenges.

So, against this background, today talks begin between President Obama and the two Senate party leaders. Perhaps the quest for a deal begins with seeing what can get 60 votes in the Senate, a goal that eluded the Gang of Six, and foisting it on the House, with the hope of gaining a majority without the Tea Party Republicans and progressive Democrats.

I see a hot, hot summer in D.C. It may take a strong financial signal - a plunge in the stock market, a downgrading of U.S. debt, or perhaps some action from our biggest creditor - China - to overcome the systemic obstacles facing these negotiations.

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