Eleventh-hour brinksmanship. Backroom deals crafted by top leaders. Finger-pointing. Rank-and-file members grumbling in the dark.
Yes, the year-end fiscal cliff negotiations followed what has become a familiar script for the 112th Congress.
Passed by the Senate early Tuesday morning, the deal (HR 8) — with permanent tax relief for individuals below $400,000 and couples to $450,000 in income, among other provisions — has come under fire from both liberals and conservatives alike. And like previous deals on the payroll tax cut, preventing government shutdowns and avoiding a debt default in the past two years, it will likely require a bipartisan vote in the House to become law.
While that’s the last piece needed to close out the 112th, the negotiations’ well-worn path was largely predictable.
Speaker John A. Boehner’s decision to go his own way before Christmas on a stillborn “plan B” bill effectively killed chances for a grand bargain yet again. It was the fourth time in two years the Ohio Republican or House Majority Leader Eric Cantor, R-Va., had walked away from the bargaining table with the White House.
Of course, walking away from the table is often the best negotiating tactic of all — either in real life or on Capitol Hill. This time, the results are mixed. Obama’s getting about half the revenue he sought — and less than Boehner originally offered after the president won re-election in November. But the GOP seems likely to have to swallow a deal with no significant upfront spending cuts.
The Deal Cutter
Senate Minority Leader Mitch McConnell has been an indispensable dealmaker the past two years, even if sometimes he’d prefer to stay out of the line of fire. The Kentucky Republican hasn’t been able to bridge the partisan divide on a grand bargain, but his involvement — and his relationship with Vice President Joseph R. Biden Jr. — proved critical in the past week after Boehner’s conference bailed on plan B. McConnell also didn’t get distracted by Obama’s own highly partisan speech midday on Monday — focusing instead of saving the tax deal he had tentatively reached with Biden — and removing Obama’s biggest leverage point for his second term.
It’s a role McConnell played to mixed success in the 2011 debt limit fight, when he offered the deal that would allow the debt ceiling to be raised by the White House with minimal congressional interference. He also was instrumental in saving the 2008 Wall Street bailout from failure, after the House balked at the deal and the stock market tanked.
The Back Room
Boehner complained shortly after the elections that there were too many back-room deals — but that seems to be the only way the 112th operates. Typically just a couple of leaders were directly involved at any one time, while other Members of Congress remained on the outside looking in, some even asking reporters what they’ve heard because they remained in the dark. Leaders keep vowing next time will be different, but it never is.
Both sides have learned the fine art of asking for far more than they can reasonably hope to get at the outset — the better to wind up in a somewhat happy place when the inevitable compromise occurs. Liberals had complained for years that Obama would always lead with a compromise, whether it be a tax-cut-laden stimulus package or not proposing a single-payer health care plan. This time around, the White House started out further left and gave itself more room to maneuver. The president pushed for nearly unchecked authority to raise the debt ceiling on his own while starting the post-re-election revenue bidding at $1.6 trillion — double what he and Boehner had been discussing in the 2011 debt limit talks. Republicans, meanwhile, continued to push for Social Security cuts in the stopgap cliff deal — only to abandon them soon after Democrats began squawking that they were demanding cuts to seniors as their price for helping the unemployed and the middle class. Democrats said they weren’t about to give up Social Security — in the form of lowered cost-of-living increases through “chained CPI” — on the cheap with the debt ceiling unresolved.
Of course, stopping each side’s unrealistic proposals became useful trophies for the other side to help sell to their Members as they round up the votes for the deal.
It wouldn’t be a negotiation if each side weren’t holding hostages and threatening to shoot them. Republicans, bolstered by their tea party ranks, had Democrats backed up time and again, especially over the debt ceiling. And taxes are the biggest hostage of all, but not the only one. Each party gave up their tax hostages in this deal but are keeping their spending hostages for the next round — when the debt ceiling and the sequester will again be front-and-center.
And that brings us to this:
Past Is Prologue
Each kick of the can has boxed in one side or the other for the next round. Republicans extracted a series of spending cut promises and tax cut extensions from Obama in 2010 and 2011, but the president in turn built up his leverage for just this moment — when just after re-election a cliff largely targeting GOP priorities was set to hit. This time, the tables may be turned — Obama will get $600 billion in revenue up front — but the GOP is betting that it will have more leverage in the spending and debt fight to come, with the threat of trillions in automatic tax hikes off the table.
Obama vowed Monday that wouldn’t be the case and that he will insist on additional revenue in 2013’s looming fights over the deficit, but he’ll no longer have as big a cudgel to force the GOP to the table. Moreover, an upfront grand bargain almost certainly would have complied at least technically with Grover Norquist’s anti-tax pledge, because it would have scored as a tax cut relative to current law. That won’t be the case next year. With permanent tax cut extensions likely headed for Obama’s signature, any new revenue next year would be scored as a tax increase, and presumably a clear violation of the pledge.
And in the next round, Obama’s vow not to negotiate over the debt ceiling will run headlong into Boehner’s treasured “Boehner Rule,” a demand for $1 in deficit cuts for every $1 in new debt.
We’ll find out who’s right in a couple of months.