I’m giving a talk here at Johns Hopkins in 15 minutes, as part of a panel on The Deficit and American Politics. These are my notes–my very quickly and only moderately systematic thoughts on whether a deficit deal is actually possible in the near-term.
Deficit reduction is almost always a matter of the politics of blame avoidance. While deficit reduction as a general matter may be popular, the specific cuts or tax increases that it requires are rarely popular, and usually attract the ire of concentrated, mobilized groups. Those groups, and the diffuse populations whose benefits are cut or taxes are raised, will want to punish those responsible for damaging their settled expectations for government action. Consequently, deficit reduction almost always requires cutting what Douglas Arnold called the â€œtraceability chainâ€ between the actions of specific members of Congress and the impacts those actions have on citizens and groups.
The â€œAmerican wayâ€ of doing so requires cross-party deals, which make it difficult for citizens to detect who was responsible for the actions they disliked. This is not only a characteristic American pattern, but also characterizes, for instance, the politics of pension reforms in most of the worldâ€”they generally turn out to be cross-party conspiracies against the voters. (I would also note that these same cross-party conspiracies can sometimes be seen in hot-button social issues where there is elite consensus against popular opinion, as with the abolition of the death penalty in the UK in the 1970s). I should note that the condition that are most propitious for cross-party deals is divided government, when each party has sufficient institutional control to protect itself against the risk of being â€œbait and switched.â€ We did not have that in the last Congress, but we will have it in the next.
The importantâ€”maybe, in a sense, the ONLYâ€”questions in thinking through the politics of deficit reduction, are: a) whether the parties believe that deficit reduction is sufficiently important to engage in a cross-party conspiracy and; b) whether the parties are able to get sufficient space from their supporters to engage in it. I think there is reasonable evidence that the answer to (a) right now is yes, but in any case if it wasnâ€™t there would be nothing left to talk about, so Iâ€™ll assume it for purposes of argument. So the real question is, can the parties get away with it, where their base is concerned?
One thing to note here is that the two American parties are not, in fact, parallel where the question of the autonomy of their elected politicians is concerned. The party base has significantly more leverage over elected officials in the Republican than the Democratic party. The chance of being successfully â€œprimariedâ€ if you are a Democrat is low, and in any case there is not the kind of organized, mass base that is capable of exercising discipline over those who carry the party label. So assuming that Democratic elected officials think that it is important to engage in a cross-party conspiracy for deficit reduction, they will generally be able to get away with it (even if it means imposing uncomfortable changes, up to a point, on their base). That, therefore, narrows the question to whether Republican elected officials believe they can get away with entering into negotiations
The first thing to say, before getting to the real final answer, is that there is a slight complication here that I did not hint at before. While Republicans might be willing to negotiate a deal on deficit reduction, they of course want that deal to include as much of what they want as possible, and as little of what the Democrats want. That means heavier on cuts in domestic discretionary spending, and relatively weak on increases to taxes and cuts to defense. Republicans might conclude that, while they could get a deal now, they might get an even better deal with a unified Republican Congress after 2012, negotiating with a Democratic presidentâ€”and theyâ€™d probably be right. On the other hand, there is a perverse risk hereâ€”one advantage of cutting a deal now is that they an avoid generalized blame for the specific details of the proposal, blaming them on the Democrats. If they get a unified Congress in 2012 AND somehow win the presidency, then theyâ€™ll be stuck doing it all themselves, and wonâ€™t be able to share the blame. That is, divided government facilitates blame avoidance, and they might calculate that it would be better to get some of the ugly business out of the way now, when they can share the blame, than in 2013 when it will be all on them.
That gets us to the final question, which is, assuming that Republican elected officials want to cut a deal, do they believe that they could plausibly get away with it where their base is concerned? This is where I have severe skepticism. The Republicans, as I noted above, are a party under severe base constraints. Their base is mobilized, and thus capable of something like collective action if they believe their interests are being violated by their representatives. And most important, the Republican base is today characterized by intense, nearly paranoid mistrust of their politicians. They believe, perhaps not unreasonably, that the party is full of potential sell-outs, but the problem is that they donâ€™t know with certainty who they are.
Consequently, the base has been converging on litmus tests so extreme that only people who REALLY are not sell-outs would agree on them. The base has gravitated toward iron-clad commitments because of this worry of selling-out. That is, they are trying as much as they can to tie the hands of their elected officialsâ€”to make them â€œdelegatesâ€ instead of representatives who are supposed to exercise some sort of discretion. And the leadership of the parties knows thatâ€”they can exercise discipline over their members, but only to enforce what the base already wants. The vote on TARP, I think, was the last time that the Republican leadership will have been able to make their members eat, in John Boehnerâ€™s terms, a â€œshit sandwich.â€
A â€œshit sandwichâ€ would almost inevitably be what members would have to eat if they entered into a deficit reduction deal. But my point is that Republican members would find it exceptionally difficult to cut a deal even if it was, by historical standards, extremely beneficial to them. Imagine that Boehner cut a deal with the White House for a plan that was 80% spending reductions, and 20% tax increases. Could he get his members to swallow it? I doubt it. The path of least political resistance for members is to vote no, and the leadership could not make them do itâ€”what discipline they have operates in only one direction today (that is, discipline toward the right).
I think Boehner is aware of this and will not want to enter into negotiations that will lead to him being ultimately rebuked by his base. The likely scenario, therefore, is that Republicans will find some reason not to enter into negotiations with the Democrats (most likely the hope of getting a 100% spending cut solution as of 2013), and nothing will get done.
So thatâ€™s the negative scenario, which is what Iâ€™m good at. It is based on a more or less rational actor form of analysis. But weâ€™re Johns Hopkins, so we can manage more than one form of analysis at a time. If one wanted to construct a feasible scenario for deficit reductionâ€”by which I mean one that Republicans would be capable of signing off onâ€”then one would have to concoct conditions under which they would be able to get away with agreeing to a tax increase. I think this is where the analysis stops being about rational actors and starts becoming semioticâ€”that is, about the meaning of signs. Here, the question is, what is the meaning of a â€œtax increase?â€ What would the actors involved in these interactions interpret as a tax increase?
The simplest, rational form of analysis would say that a tax increase is anything that raises government revenue on net over what it would have been in the absence of a change in policy. But Iâ€™m not sure that is exactly how the Republican base might see it. Consider the Bowles-Simpson proposal from yesterday. It raises taxes, on net, but it does so in the context of comprehensive tax reform. So tax rates actually go down, because the tax base is expanded (by eliminating deductions). What would the â€œmeaningâ€ of that policy act be? I think that would be up for grabs. It may be, however, that the success of deficit reduction rests entirely on the answer to that question, and in particular on what Republican elected officials believe the answer will be (which is not the same)â€”in essence, on elected officials beliefs about the potential beliefs of a large, non-hierarchically organized and still inchoate group.