Thursday, January 10, 2013

The limits of leverage

One of the epiphanies I had about politics since I started writing this blog was realizing the importance of leverage. Specifically, the GOP could finally make the Dems cut government spending because they had the leverage of the debt ceiling.

Leverage Past
Back in the summer of 2011, it was clear to both the GOP  and the Dems that the GOP had the leverage.  However, then the Dems foisted a deal on the GOP that stole most of the leverage back, because the GOP no longer had the choke points of appropriation bills and debt ceiling increases.

Neither party was able to exert its will in 2012 because the absolutely necessary matters had already been decided. The next "must-legislate" moment wasn't coming until the end of 2012 with the expiration of the Bush tax cuts. Therefore, the prime focus of both sides were the campaigns for the control of the House, Senate, and presidency.

Back to the present. With expiration of the Bush tax cuts and new tax rates in place, it would seem that the Dems have no leverage anymore. But that viewpoint is incorrect.

No Monopoly on Leverage
Leverage is not being able to do everything you want. The GOP found that out in 2011. Few of the cuts were immediate, the Dems forced the Defense budget to bear a lot of the cuts, and the GOP weren't able to include provisions that made the Bush tax cuts permanent, which was high on their wishlist.

This wasn't a failure of leverage, but it shows the limits. Leverage doesn't ensure passage of a particular agenda when the House, Senate, or President is dead set against it. They all have veto power that they will use. You can get them to do something within the wide middle of political outcomes, but you can't blackmail them into capitulation. Bargaining and compromise is expected by the majority of the electorate. Drama and ultimatums are going to be punished unless they are dropped for last-ditch realism and compromise.

Leverage To Be?
So, how will leverage play out in the next choke point, the debt ceiling? I doubt the GOP will get all the cuts they want (but won't specify). They may get some additional cuts on top of the agreed level of cuts from the August 2011 deal. They won't get to exempt Defense or write their own script on where the cuts will occur.

If Obama says no to unreasonable demands, as judged by center of the country, he won't be blamed if government shuts down. If the GOP can put together a reasonable list of additional cuts (per the same judges), Obama will be blamed if he still says no. The important thing is taking the temperature of the center of the country and knowing what it is considered an unreasonable demand, then making sure you aren't on the wrong side of that fuzzy line if there's a stand-off.

However, I don't see the GOP accurately taking those readings yet. As a party, they never faced reality on the expiration of the tax cuts. McConnell saved them by starting real negotiations just four days before doomsday. That didn't give much time to cobble together a well-crafted program. The GOP looks likely to do just as poorly on the debt ceiling choke point.

The GOP hasn't done well with their leverage. They aim too high, shoot too much ammo, waste time, and then have accede to a lesser deal than if they had proposed a center-right solution in the beginning. There's no improvement in their game that I can see. If I was their coach, I'd throw in the towel.

Ideas, anyone?

That better be a new plan, son.

Not a good plan: Atlantic hostage post, National Review hostage post.

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