Monday, November 19, 2012

The GOP's big risk that backfired

Conservatives had bet big on being able to defeat the Democrats and take control of the federal government. They were largely successful in 2010, retaking the House and almost capturing the Senate. But in this election, they fell far short.

The GOP now has to settle for much less as they deal with taxes and spending reductions. They were strongest in 2011, with the debt ceiling looming. However, they lost that advantage by stubbornly resisting increased taxes on the wealthy. This was an explicit promise most Republicans had made (the Norquist-imposed pledge not to raise taxes). The implicit penalty for any Republican breaking the pledge was to face a stiff primary challenge. So, between stubbornness and fear, no-new-revenue was their unalienable position.

 The Cost of Maintaining Sacred Cows
They gave up a lot to maintain that position. They probably could have gotten deeper budget cuts in a broad range of programs, and maybe would have been seen as serious "adult" budget realists. But serious spending reform doesn't happen quickly, so you have to be willing to spend several months in negotiations. The Dems were willing to do that, but the GOP grandstanded for too long and spiked negotiations at least once. In the end, the GOP were backed into the corner by a hard deadline, and had to take the only no-new-revenue deal the Dems offered. (And the Dems stacked the deck so it was an extremely disadvantageous deal.) Essentially, the GOP lost the budget negotiations over no-new-revenue in 2011.

"The Situation"
They are poised to lose in the current negotiations too. The situation is eerily similar:
  • There is a huge fiscal issue with a detonation date.
  • Negotiations that should take months have to be squeezed into a few weeks. 
  • The Republicans risk being nationally hated spoilers unless they seriously negotiate.
So, they are back in this position because they went for broke on their philosophy and agenda, hoping that they could win it all and simply impose their solutions.

 The Perks of Flexibility
I can't accuse the Dems of doing the same thing. They said they were putting everything on the table. The Dems never walked away and even offered a higher target for spending cuts in 2011. They didn't have sacred cows that they had to protect at all costs. The GOP could have asked for all the cuts they dreamed of, and they might have gotten a substantial number of them. But only if they were willing to make some big concessions too. However, the GOP weren't willing to do that.

This has been a lesson to me in negotiations, but it seems that the wise men of the GOP didn't learn what I learned, because they are back in the same situation this year. The best they can do is retrieve their crib notes from 2011 of what the Dems offered in their "grand bargain" and try to embarrass the Dems into accepting the deal now. But the headlines for "grand bargain" are decidedly unoptimistic.

Prepare for the Downside
This is also a reminder to me that you always have to consider the downside risks. What should you do in case the market falls, sales stall, or you miss your electoral goals? You better have a plan. The GOP didn't. That makes them even bigger losers, and it didn't come from the voters.

...but don't choke on it.

PS. I don't consider this deeply insightful. I think lots of people share this perception. However, the GOP hasn't acknowledged this situation since the election, so I decided to write explicitly about it and commit it to pixels. Perhaps many more Repubs are saying "oops" now.

Extra. An explanation of the Dem bargaining position regarding higher tax rates vs. a cap on deductions. 


Anonymous said...

To a certain extent, the GOP's holding the House is punishment, too. They can't stand on their so-called principles any longer because they have to vote for something they don't want, or don't vote for anything and get what they don't want as a default.

All-in or fold is not a pleasant situation to put yourself in. But that's what they force on themselves in order to force the Dems' hand and avoid the tax-incresae-time-bomb they created a decade earlier.

You can see them squirming to find a way out of the hand now that they've lost it, but Obama and the Dems would have to be fools to let them do so now. With the Dems in charge of the Senate and White House, the automatic spending cuts can be held disproportionate against the GOP priorities in 100 different ways, and the automatic tax increases will almost certainly only be temporary if the GOP does nothing to stop them now. Then, they'll get the blame for letting them go bye-bye, and no credit for reinstating them under duress. If the Dems had won the House, the GOP could just start calling the Dems tax raisers again, and blame them for everything. Not now, however.

Is the GOP tamed? Probably not. But they have to behave for a little while even though their House majority is secure for two years (at least). They have no leverage to get ANY of their policy preferences maintained, but they had them in place for far longer than they deserved.

ModeratePoli said...

@Anon, you make an excellent point. The GOP holding on to the House is a kind of punishment, or a sentence to work with those devils on the other side. It's the perfect kind of punishment that fits the crime so well.

I know! It's Groundhog Day! I've got to see whether I'm the first person to publish this!

ModeratePoli said...

No, I'm not the first one with the Groundhog Day comparison. The Examiner, a used tissue that repeated St. Lucie voter fraud charges, had it on Nov. 7. There's a difference. The Examiner thinks the voters are making the mistake and being sent back to repeat it until they get it right. I think the elected politician are in the Bill Murray role, and we the voters are the cosmic force making them do it over.