Oct. 1, 2014 SIGN IN | REGISTER

What Happens if We Go Off the Fiscal Cliff?

The willingness of Senators in both parties to work hard to find a solution to this problem is a good sign and will provide some clues to whether 2013 will offer any hope. Bipartisan supermajorities in the Senate, allied in policy with Obama, might be able to force the House to compromise. But that, quite frankly, is a slender hope. When more than 95 percent of House Republicans have signed the Grover Norquist tax pledge, and the tax issue has become a total nonnegotiable demand, it would take a bold move by the Speaker, a willingness to rely on most Democrats and a minority of Republicans to reach a deal, that is nearly inconceivable — certainly before the elections.

After November, the dynamics of negotiation depend very much on the outcome of the elections. If Obama wins reelection and Congressional Republicans know they will have to deal with him for another four years, they might at least be inclined to negotiate with him in December. But the willingness to negotiate will be much higher if Democrats retain the Senate than if Republicans know that, come January, they have the leverage of a GOP Senate. The endgame will then slide into January at least.

What if Mitt Romney wins the presidency but Democrats hold the Senate? Some Republicans might prefer to cut a deal with Obama, to make sure their president can enter the White House without an economic cloud over his head and with many of the tough decisions made before that point. Romney has made it clear that he would prefer to have all the decisions deferred for a few months, having the deadlines extended. But it is in no way clear that Obama would agree to that plan.

Romney also made clear in his interview with Time’s Mark Halperin that he did not want deep budget cuts in 2013, making a Keynesian case that they would halt the recovery. But that is not the position Congressional Republicans take. Would he then ally with Senate Democrats against his own party? Not likely.

If Romney wins the White House and Republicans win the Senate, the willingness of Republicans to negotiate with a lame-duck president will go down dramatically.

Here, we know the game plan from House Budget Chairman Paul Ryan (R-Wis.): Run on the Ryan budget, win it all, hold on until after the inauguration, and in the meantime, plan “the mother of all reconciliation bills” to negate the defense sequester, double down on discretionary domestic budget cuts, make permanent the Bush tax cuts, enact a new tax cut on top of them, reducing the top rate to 25 percent, and do as much to turn Medicaid into a sharply reduced block grant to the states and create a premium support system for Medicare as revised reconciliation rules will allow.

What that plan would do to the fragile economy, to the safety net and to the long-term deficit and debt situation, is, or should be, a giant question now and through the election campaign.

Norman Ornstein is a resident scholar at the American Enterprise Institute.

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