What the Fiscal Cliff Deal Was Really About
So, we have a modest deal in place to avert the contrived crisis known as the fiscal cliff. Washington is celebrating the fact that Congress averted the disaster that it created out of thin air last year.
Some say that it’s not a bad deal on its merits, but we’ll have to await final judgment until we see what happens with the debt ceiling, which has to be raised in the next two months. If the White House stands firm on its refusal to negotiate over the debt ceiling again, and doesn’t give any more concessions, then we can look back at this deal as a pretty good one, on balance.
I suspect this will become the center-left conventional wisdom, and only dirty hippies will be bitching. So pass the patchouli, because I hate this deal.
It’s simply a hostage exchange. The Republicans gave up the fiscal cliff, and will now take the debt limit, the federal budget and automatic across-the-board cuts to discretionary spending (the sequester), and have another standoff in 2-3 months time. The deal wouldn’t have gotten 85 GOP votes in the House without the leadership giving right-wingers ironclad guarantees that they’ll have another hostage soon.
What leverage will the White House have at that point? They’ve already rejected the “constitutional option” to avoid the debt ceiling — and won’t mint a big platinum coin. The Bush tax cuts on high earners will be off the table. That leaves cuts to defense — which Republicans hate — and public opinion, to which the GOP doesn’t seem terribly responsive when its base is screaming murder and threatening primaries (which is always). That’s pretty thin gruel given that the “austerity caucus” thinks it has a good shot at cutting Social Security and Medicare as part of a “grand bargain” with Obama.
Other than that, we’ll only have the Democrats’ legendary iron back-bone on which to rely. Nobody’s ever gotten rich betting on that.
After the bill’s passage, Obama swore he wouldn’t negotiate over the debt ceiling again. That’s an important principle to establish for the years ahead, but it’s irrelevant to the deal at hand. Because the debt ceiling needs to be renewed at about the same time that the stop-gap measure funding the government runs out and the sequester kicks in, we’ll have another hostage situation very soon.
So while progressives are celebrating Grover Norquist’s ugly black eye, the can has only been kicked a short way down the road. Dems will have a poorer hand to play in the months to come. If cuts to popular retirement benefits end up in the mix of a budget deal, then this deal would have paved the way for a bad outcome.
Perhaps I’ll be proven a pessimist. I certainly hope so. But I don’t quite get the value of evaluating this deal in a vacuum, as if a showdown over the debt ceiling or a potential government shutdown isn’t all but assured.
And someday you’ll be able to tell your kids that you remember a time when Congress didn’t need a phony crisis to pass laws.