The Path to a Grand Compromise?

Erskine Bowles and Alan Simpson were at Duke last night (tape of event here) and spent 6 hours talking with students, a large public audience, and faculty about the merits of their debt reduction plan and politics.

The most noteworthy news that came out of these discussions was that the Bowles-Simpson Commission report - which was supported by a bipartisan group of 11 out of the 18 commissioners -- is currently being put into legislative language.  Apparently 50 members of the Senate and about 150 members of the House have expressed at least some level of support.  Bowles speculated that there is some chance of a grand deal this year, but thought the more likely path to resolution would be after the election.  He predicted that Obama would allow the Bush tax cuts to expire and the spending sequesters to take effect.  This would create the incentives on all parties to negotiate and give the White House sufficient leverage to push a deal through what is likely to be a Republican Congress (of course, it is too early to tell on this).

It is worth thinking about how this might work if there is a Romney presidency and a Republican Congress.  Getting to a deal that could overcome a Democratic filibuster in a Romney presdidency might actually be more difficult than having Obama negotiate with a Republican majority in Congress.  If Republicans hold both chambers of Congress and the presidency, they would have the option of jamming through a package that relied on greater spending cuts and lower taxes via reconcilliation -- but that would be a politically risky path because the onus of serious Medicare cuts would be fully on their shoulders and set up a possible Democratic takeover of Congress in 2014.  The bipartisan approach would be safer for both Romney and the Congress -- but would be hard to achieve with the very conservative House faction demanding Republican take a hard line, a new president eager to demonstrate his conservative chops, and a smaller, but more liberal, Senate Democratic caucus insiting on minimizing Medicare cuts and increased taxes on the wealthy. 

Divided government, with a Democratic president no longer worried about reelection, is probably the easier path of the two.