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.

Image: nytimes.com

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.