Note: Here’s a post that I began some time ago and that is increasingly losing relevancy as post-election developments multiply. But it ended up being rather long and, frankly, the idea of having spent the time all for naught gives me a sad. So… enjoy?
Following up on why the results of the 2012 election should not be seen as anything but a decisive endorsement of the Democratic Party, I’d like now to focus on why that matters. Beyond somewhat airy — if undeniably romantic — fantasies of a long-term project to rehabilitate and revitalize American liberalism, there’s a short-term salience to calling 2012 what it was: the upcoming standoff between House Republicans and the president over our near- to long-term fiscal future.
Yes, yes; we’re talking (the unfortunately named) fiscal cliff.
Assessing the politics of the fiscal cliff, the big question — in some ways the only question — is whether Barack Obama means what he says. To put it lightly, this is not a new development in the Obama presidency. Not only is the vexing issue of what Obama really believes painfully familiar, but in essence the very contours of the fiscal cliff negotiation-cum-showdown is a rerun of two of the most defining moments of Obama’s tenure: the 2010 negotiations over the Bush tax cuts, and the debacle of last summer’s deal to raise the debt ceiling. Yet unlike those two examples, and in many ways for the first time since the opening months of his first term, Obama is the one with superior leverage.
In 2010, Obama had his back to the wall due to GOP threats to let payroll tax cuts (among others) passed in the stimulus bill to expire. Recall how shitty the economy was doing at this point and you’ll see why the White House considered letting lapse stimulus tax breaks — as well as the entirety of the Bush tax cuts, including those for the “bottom” 98 percent — to be unacceptable. I think David Corn does a good job in his recent book, Showdown, detailing how that deal was substantively much better for Democrats than the White House was ever given credit for. But it’s hard to disagree that Obama’s acquiescing to Republican demands in the winter emboldened Tea Party Congressmen to wage their debt ceiling brinksmanship in the summer.
And, boy, what an unpleasant summer that was! Because my birthday is August 2, the day the whole debacle reached its merciful denouement, I remember quite vividly what it was like on that day to be someone who had voted for Barack Obama. I remember the “leaks” to the New York Times reporting the White House had offered to raise the retirement age, cut Social Security, lock-in the Bush tax cuts, and all in return for Republicans’ raising the debt ceiling — a once perfunctory measure and nonpartisan necessity — and agreeing, in principle, to find $800,000 worth of revenue (either from closed loopholes or, more brazenly, projected post-tax cut economic growth). Let me tell you, as a liberal, that summer totally sucked.
So I can’t blame those on the Left for being anxious already over a potential fiscal cliff-induced Grand Bargain. Put 2010 and 2011 together and you’ve got precious little in the Obama record to dissuade his lefty supporters from the suspicion that, if he can, the president will slice ‘n’ dice those social insurance programs that have become the very identity of the Democratic Party in the modern era. And for what? Pleasing a bond market that’s still setting interest rates so low it’s almost begging the US to borrow money? Receiving plaudits from frivolous self-styled centrists like David Gergen or The Economist? Burnishing his own legacy by securing the holy grail of modern Washington, the Grand Bargain, despite the fact that such grandiosity is currently unnecessary if not outright ill-advised?
During his first press conference since reelection, Obama didn’t calm anyone’s nerves. As has been the case often with the president, it was supremely difficult to parse from his comments what he really thinks about the fiscal cliff and what he’s really planning to do about it. Is he looking to take another swing at a Grand Bargain along the lines of that discussed last summer? Is he secretly confident that when America finds itself doing its best Wile E. Coyote, Republicans, having already lost the battle to preserve lower tax rates for the top 2 percent, will acquiesce and reinstate Bush-era rates for lower 98? Here’s how little anyone knows: two of the more astute left-of-center pundits around, New York‘s Jonathan Chait and Washington Monthly‘s Ed Kilgore, watched the same presser and came away with diametrically opposed conclusions.
Now here’s where the Democrats’ left-of-center coalition and its resounding — not close but resounding — victory on November 6 becomes important.
The fact is that, if he wants it, the president has an enormous amount of leverage over House Republicans. Last summer, when it was Republicans who were all too happy to do nothing and let the debt ceiling become a guillotine, the caucus rejected a Grand Bargain that was heavily tilted in its favor. Thinking was, I suppose, that agreeing would improve Obama’s chances for reelection and thus ultimately decrease the likelihood that upper-income taxes would stay put or even decrease further still. Democrats already terrified by the prospect of the GOP finishing what it started in 2010 were willing to make concessions for the sake of Obama that they’d usually consider unthinkable.
No longer. With Obama’s having won, convincingly, while running the kind of populist center-left campaign that isn’t supposed to work in center-right America, the leftwing members of the president’s coalition feel justifiably emboldened. Conversely, with Republicans still reeling from defeat — and looking for people to blame — the once-strutting Tea Party is, at least for the moment, in something of a strategic retreat. The Grand Bargain of 2011 was only thinkable with an assumption of overwhelming Republican, and significant Democratic, support.
If we buy into the framing pushed immediately and relentlessly by Gergen and the like, that this was a close election from which no one could claim any sort of mandate or leeway (besides for austerity, that is) then Obama and Congressional Democrats are indeed obligated to cut the lowest-common-denominator deal: Simpson-Bowles or the like. But if the media and political class conceives of recent events as clearly beneficial for the center-left, there’s an open space for Obama’s lefty supporters — unions, especially — to demand a deal that actually gives them something they want. Stimulus, card-check, a millionaire’s tax; whatever.
It’s unlikely they’ll get any of the above. It’s not like America is completely different than it was five weeks ago. But unless we look at November 6 as a reset, any new Grand Bargain is inevitably going to look a lot like the old one.