Republicans Have Zero Leverage in the Lame Duck Budget Debate

The basic fact about the post-election budget debate is that the Democrats and the Republicans both want to avoid the automatic austerity measures that start kicking in after January. The Bush tax cuts expire in full, the Republicans’ sequester cuts happen, and the payroll tax cut expires.

Republicans have a strong incentive to pretend that we need to strike agreement on a bill before January, because after January they lose all their leverage.

That’s because once the Bush tax cuts expire, what have they got? Tax rates will automatically reset to a higher level, so the only debate will be about how low they should go. If Republicans want to lower taxes at all, they’ll have to move closer to Barack Obama’s position or else there’s no deal and tax rates stay high.

There’s no good reason for Barack Obama to pre-compromise with the Republicans and strike a deal before January.

Comments

  1. Gdub says:

    Actually there is–it isn’t a very good way to run the government. Since no one has bothered to pass a budget for years, most of the cuts would come in non payroll areas, which hammers executive branch service providers. That doesn’t make the executive branch party very popular (or the Congress). No winners, lots of losers, except for those who thinks reading polls is “just like governing”.

    • Jon Geeting says:

      Government by “grand bargain” is even worse – fruitlessly trying to tie the hands of future Congresses decades into the future. Republicans want us to deal with the “fiscal cliff” issues by striking a long term deal on the deficit. But why should that have anything to do with avoiding the short-run spending cuts and tax increases? Other than that they want a shot at locking in lower tax rates than Obama wants while they have the leverage. No thanks. Waiting until after January and dealing only with the problems at hand is a much better play.

  2. John says:

    This is part of your extremism – you’re unable to think long term. That’s a problem.

    • Jon Geeting says:

      John you are always saying 10 year projections are bullshit. I agree. We should just muddle through on the deficit.

  3. Gdub says:

    I disagree with your assertion that the president has “no incentive” to make a deal before January. In fact, all sides have an incentive.

    That is different than not liking the deal. Imposing across the board cuts on an organization as big as the federal government is a recipe for chaos. I see no evidence that one ends up a more “sensible” deal after this type of idiocy other than that you hop so.

    Again, passing a budget is a fundamental requirement of good governance, not something you get to if you see a tactical advantage. We used to do this regularly, even in “polarized” times.

    • Jon Geeting says:

      I’m against the across the board cuts. The Republicans should never have demanded them in the first place, and should agree to cancel them now, no strings attached.

  4. Gdub says:

    You have to make some assumptions about the future, which needn’t bind future Congresses. But at the same time short term budgetary sleight of hand harms us too

    You can’t just drop the cuts, it requires a change in law. And that isn’t happening with no strings attached.

    Among other things, the defense budget needs to be cut, and wiser spending and oversight of what is authorized. Budgetary battles aren’t solved like arm wrestling matches, wish as we might. Even when one party has held the cards, it’s not easy to get right.

  5. Jack Contado says:

    “the people” voted for more gridlock. Then gridlock they shall have. And that means enforcing the current law of the land….sequestration.

    I’d much rather a messy, disorganized and painful set of cuts than an clean, orderly and disastrous set of tax and spending increases.

    As someone once said, “never let a crisis go to waste bitches”. At least I think that’s what they said.

    • Jon Geeting says:

      But we don’t have to have any cuts! We can pass a law saying the sequester doesn’t happen. Everybody agrees it shouldn’t happen, so let’s just do that.

      • Jon Geeting says:

        Democrats agree the sequester shouldn’t happen. Republicans agree the sequester shouldn’t happen. What is there to negotiate about?

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