Shutdown backdown

by John Quiggin on March 2, 2011

The shutdown of the US government has been deferred for two weeks, as a result of a Republican proposal which gives them $4 billion of facesaving but uncontroversial cuts (some already proposed by Obama, the rest unspent money set aside for possible earmarks, which they have already decided not to include in the Budget). This is a pretty big backdown, given the kind of rhetoric being thrown around after last year’s recapture of the House, suggesting positive eagerness for a shutdown. Among the factors contributing to the backdown, I think the vigorous resistance being mounted in Wisconsin, and the significant public sympathy it is attracting, would have to be the most important. Secondary, but also important is Obama’s bounceback in the polls. The bounce has been modest but surprising given the continued weakness of the economy. If the shutdown is blamed on the Reps[1], and the economy is recovering by 2012, their chances of victory don’t look so good.

That said, on past form, the odds have to favor an ultimate capitulation by the Dems. Given their relative strength, and the extreme demands of the Rep leadership (let alone the Tea Party), a pre-emptive capitulation sufficient to avert a shutdown looks unlikely. At the other end of the probability distribution, the chance that, in the context of an extended shutdown, the Reps might buckle as they did in 1995 looks more promising than before.

fn1. As Frank Rich points out, there is a compelling logic to blaming the Republicans for a shutdown, namely that the Republicans would clearly like to shut down the (non-military bits of the) Federal government, whereas the Dems would not.

fn1. And, as Frank Rich observes, it

{ 22 comments }

1

Ebenezer Scrooge 03.02.11 at 11:25 am

I can’t see how the odds favor ultimate capitulation by the Ds. A game of chicken is determined by who thinks they have more to lose. People–even crazy Republicans–do not view losses and gains as symmetrical. The Rs are playing offense; the Ds playing defense. Given this cognitive bias, the odds are stacked against the Rs.
(Of course, the Republicans could be so crazy as to think that they’re playing defense. This might be true for the Teahadist wing, but is certainly not true of the Boehner-Cantor faction.)

2

Brett Bellmore 03.02.11 at 12:01 pm

Ebenezer correctly identifies this as a game of chicken. As with any game of chicken, if there’s a car crash, both drivers were at fault. If the Republicans are willing to shut down the government over relatively pathetic spending cuts, the Democrats are willing to shut it down to prevent relatively pathetic spending cuts.

The biggest factor working in the Republicans’ favor is the fact that spending authority actually DOES periodically expire. The winning strategy for the Republicans is to keep things dragging along in general with temporary continuing resolutions, while one by one originating actual, normal duration spending bills for only those programs the Republicans want continued. On an issue by issue basis it will then be unambiguously the Democrats who are refusing to fund program “X”.

To the extent that Republicans want to defund popular programs, of course, this is the winning strategy for Democrats, too.

So, ideally, we get a series of single issue bills that pass or fail, instead of the whole government being up for grabs on every vote. And what’s wrong with that?

3

dsquared 03.02.11 at 12:43 pm

Ebenezer correctly identifies this as a game of chicken. As with any game of chicken, if there’s a car crash, both drivers were at fault.

Both drivers were at fault if they both decided they were going to play a game of chicken. If one driver was just tootling down the highway, and the other driver suddenly decided that he needed to pick a fight to show who was boss, then it’s still a game of chicken but the culpability is much more one-sided.

4

MattF 03.02.11 at 1:01 pm

FWIW, Rich’s argument was the same one that Richard Armey, then House Majority leader, made when Newt Gingrich was hell-bent for shutting down the government in the 90’s. Armey was proved right– Republicans are the default anti-government party, and they will bear the responsibility if the Feds shut down.

5

politicalfootball 03.02.11 at 1:42 pm

I don’t think it’s at all clear who blinked (or who swerved, if that’s our metaphor today). The Republicans lose nothing in this deal, and the Dems get nothing.

The question is, who is better served by the delay? I agree that the political climate is unfavorable for the Republicans at the moment. I think they’ve wisely calculated that kicking the can down the road a bit can only help them.

6

Glen Tomkins 03.02.11 at 2:40 pm

Someone call David Koch

We don’t really know if their is another side out there that it up to anything. Even if there is, who knows what it is up to.

The size of the spending cuts they propose is too small to actually get significant deficit reduction. But does that mean:
1) They can’t do math, so they don’t know it’s too small.
2) The deficits are just an excuse. It’s specific programs they’re after.
3) They don’t care about deficits or programs. This is just a way to gin up a constitutional crisis.
4) All of the above. They can’t think clearly, or are not in agreement, or are using each other.

You can’t go by the public pronouncements of their politicos to sort this out. On their side, the politicos are minor underlings. They probably don’t understand the plan, even if they were trying to be candid about it, which they aren’t. That’s the main take-away from the episode of the David Koch impersonator who recorded his telephone conference with Scott Walker. Walker has clearly never been allowed to talk to Koch, as he didn’t know the voice on the line wasn’t Koch’s. He’s clearly thrilled to be granted 20 minutes of the great man’s time, an honor he clearly never expected. We know who calls the shots in that relationship.

If you want to know what the other side is up to, pretend to be Boehner and call David Koch to ask for your marching orders. Oh, wait, that won’t work:
1) Koch probably has competent staff and you’ld never get through.
2) The servant doesn’t call the master, certainly not directly.

7

Consumatopia 03.02.11 at 2:54 pm

I think it’s clear that Republicans will get most of the blame for the shutdown itself. But if economic growth doesn’t speed up, Obama and Democrats will get the blame for that. Since a shutdown could slow down the economy, that means the incentives for Republicans kind of neutralize each other.

8

Straightwood 03.02.11 at 3:47 pm

Energy depletion and climate catastrophe cannot be averted by the shoddy faux two-party politics of the current American government. A money-addicted oligarchy, firmly in control of American politics, is driving us relentlessly toward the abyss. The most important lesson of the last thirty years in America has been the wholesale betrayal of the elites – financial, journalistic, academic, and governmental – of their responsibilities to the nation. They were cheaply bought by the malefactors of great wealth. (Take a look at Glenn Hubbard’s nauseating display of arrogance in “Inside Job” for a textbook example.)

Whatever new political order arises to triage our inevitable approaching disaster(s) must be founded on a culture of esteem, and not on suicidal materialism.

9

William Timberman 03.02.11 at 4:21 pm

daquared@3

If one driver was just tootling down the highway….

Blindfolded. Would that make a difference? (As in: You can’t expect a synthesis if no one advances a real antithesis. As in: This is why every sane person despises what passes for politics these days.)

10

Ebenezer Scrooge 03.02.11 at 4:51 pm

Dsquared & Brett:
I don’t think that fault has much to do with this. Game-theoretic chicken does not necessarily involve testosterone-addled youth with no greater stakes than comparative manliness. In this case, both Ds and teahadist Rs are fighting for what they perceive as good public policy, and are willing to take considerable short-term risks to do so. (Boehner/Cantor are fighting for political power, so they’re a bit closer to testosterone-addled youth. Although that is a very odd characterization of Eric Cantor who–like Pitt the younger–seemed to have been born old.)
If you need to make a moral judgment, the proper comparison is not a game of chicken. It is more like a competitive game of “heighten the contradictions.” And I’m not sure who should get blamed in this one.

11

chris 03.02.11 at 5:06 pm

@Glen Tomkins: I’d lean mostly on 2, partly because taxes are off the table, but mostly because they’re going where the money isn’t. It’s about programs they hate, not about programs the government actually spends big bucks on. (In fact, since Republicans and Republicans-lite have controlled the US government for darn near a generation, there isn’t much money left in programs they hate partly *because* they hate them, and have cut them already.)

Taking taxes and the military off the table before the discussion starts is a way of predetermining its outcome (given the political power wielded by the old in the US, their programs are pretty much off the table regardless of what any particular politician says). So that it will “just turn out” that we have “no option” but to cut spending Republicans don’t like. Other ideas are excluded from the discourse because if they were allowed to become *competing* ideas, they might win the competition.

12

marcel 03.02.11 at 5:22 pm

Chris wrote:

1) “In fact, since Republicans and Republicans-lite have controlled the US government for darn near a generation, there isn’t much money left in programs they hate partly because they hate them, and have cut them already.

Social Security and Medicare contain plenty of money.

2) “given the political power wielded by the old in the US, their programs are pretty much off the table regardless of what any particular politician says

This begins to get at the Republicans’ conundrum. The moneybags and purists in the party hate these programs, the ones with the big bucks. Their supporters, whose votes they need, keep these programs from being thoroughly gutted. Notice how, over the years, Republican politicians keep coming back to these programs, only to get their hands badly burned. The long term strategy, clearly enunciated by Norquist, is to keep cutting taxes until the fiscal crisis is sufficiently serious that they can carry enough of their voters along.

13

Steve LaBonne 03.02.11 at 5:33 pm

The long term strategy, clearly enunciated by Norquist, is to keep cutting taxes until the fiscal crisis is sufficiently serious that they can carry enough of their voters along.

Which is why it was so idiotic and self-destructive for the Democrats to agree to extending the Bush tax cuts.

14

Henri Vieuxtemps 03.02.11 at 5:53 pm

Which is why it was so idiotic and self-destructive for the Democrats to agree to extending the Bush tax cuts.

It may be idiotic and self-destructive for ‘the Democrats’, an institution, but it’s quite beneficial for many individual Democrats. Retiring into a $1.5 million/year lobbying ‘job’ is neither idiotic nor self-destructive. And you’ll pay less taxes too.

15

roac 03.02.11 at 5:54 pm

The agenda of the Republicans in Congress is to win elections in 2012 — nothing else. Their leadership has said so.

There will not be a government shutdown, because Boehner thinks — correctly, in my view — that the last one was a disaster for his party. (It is possible that his members will insist on making the same kind of mistakes Scott Walker is making in Wisconsin, but it will be over his dead body.)

The public pronouncements of both sides are to be disregarded. Continuing negotiations are taking place, far, far from the public view. Whoever is negotiating for the Democrats has to know that Boehner will yank the steering wheel in the end.

(I was saying the above last week, and the two-week CR that is about to be enacted reinforces my opinion. It’s a matter of knowing what hints in the media reflect what is really going on.)

16

Theophylact 03.02.11 at 6:28 pm

Unfortunately, Frank Rich is leaving the Times. Joe Nocera is moving up to be a twice-a-week Op-Ed columnist, but that’s not an adequate replacement; the only reliably liberal general-purpose columnist left is Bob Herbert. (Yes, yes, Paul Krugman; but he’s there for economics.)

17

Glen Tomkins 03.02.11 at 6:50 pm

@ Chris,

“I’d lean mostly on 2.”

Not to disagree with you (after all, I proposed #2 as a possible explanation for their behavior), but there is one central difficulty at pushing #2 as the sole, or even dominant, explanation.

You’re right about them having already succeeded at gutting govt programs they don’t like. So if you look at that they are on now to cut, if you look at the ACA, which is the poster child and consensus example of the program they want cut, it just doesn’t pass muster as a program that the Rs have any real ideological objection to.

Had we gone with even that “robust” public option, much less Single Payer, much less a National Health Service as our reform package, then, sure, you would expect ideological opposition to kick in. Any of those reform plans would have represented backsliding from their point of view, away from the conservative and corporatist consensus they ahve already been so successful at achieving. But what we got is about the only corporate-friendly reform possible.

If you say that no reform is what the corporate interest would prefer, I don’t think that argument can be sustained. The quality of medical care in this country, especially given what we pay for it, has long been circling the drain. We have long tolerated crazily spotty access. Neither of those had, in 2009, gotten to any more of a crisis state than what we have tolerated for decades. The crisis now is that the industry has worked itself into a corner where it has priced itself out of the market. It is now an arguably rational decision to go naked, just forget about maintaining coverage. People have started acting on that reasoning, and the first people over that edge are the good risks. Once that starts, the industry is locked into an adverse selection spiral, at the end of which only very bad risks — bad certainties, actually — will be willing to buy their product, but they won’t be able to afford it by then.

The industry needed rescue (or simple abolition, my favored alternative), and in the ACA, they got it. Obamacare is just a more corporate-friendly version of Romneycare. The mandate is a Republican idea.

I don’t see any reason for the Rs to want to do in the ACA under #2, unless you bring in 1) and 3). Some of them are stupid enough to imagine that killing the ACA actually is deficit-friendly. Some of them want a constitutional crisis. These groups are in an Unholy Alliance and Confederacy of Dunces with people confused and uncritical enough to impute some sort of taint of statism to the ACA.

Different folks among them offer bits and snippets of rationalization drawn from all of the above, and you can conjecture that the true motivations of different players actually is, but I don’t think you can make a tenable grand unifyied theory of govt shutdown. If it happens, it will essentialy be an accident, the result of their side not understanding itself any better than we understand them.

Not that that will stop me from conspiracy theorizing.

18

chris 03.02.11 at 8:19 pm

Which is why it was so idiotic and self-destructive for the Democrats to agree to extending the Bush tax cuts.

Sure, if it had happened in a vacuum, but IIRC there were about half a dozen other bills (including, again IIRC, restoring a particular human right to ~10% of the population) being held hostage at the time, and the tax compromise was the ransom Reid (and the other D leadership, but Reid was responsible for the worst chokepoint) paid to allow the other bills to pass.

19

Steve LaBonne 03.02.11 at 8:26 pm

Chris, the price was too high, as we’re seeing now. If the Republicans succeed in crashing the economy again with the spending cuts that the strangulation of tax revenue makes all but inevitable, the same angry-but-stupid voters who gave them the House in 2010 will give them the Senate and the White House in 2012, and all that stuff will be gone anyway. Bargaining with criminally insane people never turns out well.

20

Matt McIrvin 03.02.11 at 11:15 pm

Obama’s poll bump is over, for the time being; his approve/disapprove is back down to somewhere near even. I suspect it’s just because he hasn’t been that prominent in the news for several days; events in Libya and Wisconsin don’t have much directly to do with him.

21

Lemuel Pitkin 03.03.11 at 3:37 pm

It may be idiotic and self-destructive for ‘the Democrats’, an institution, but it’s quite beneficial for many individual Democrats

Henry V. gets it.

Without claiming any special expertise — and really, we’re all kind of talking out of our asses here — it seems like the important point is that neither party is a unitary actor. Rs are roughly divided between those who just want to achieve their stated policy goals — more money for the rich, less for working people — and those who put more weight on the political destruction of Obama and the Democrats than on short-term policy outcomes. While the Ds are divided between those who want to achieve their stated policy goals — the status quo, basically — and those who would prefer something closer to the Rs’ program (tax cuts and Social Security “reform”.) Under the circumstances, seems like the smart money still has to be on “capitulation by the Dems”.

22

Satorist 03.06.11 at 4:06 pm

A majority of congressional Democrats have just agreed to cut previously agreed to *current spending* on social programs by $4 billion, having just two months ago agreed to $40 billion in current spending cuts, reductions of payroll and inheritance taxes as well as a two-year extension of income tax cuts for billionaires. In the next two weeks congressional Democrats will agree to some “compromise” between their proposed $6 billion additional spending cuts and the $60 billion the Republicans have proposed.

And the assertion is that the Republicans have backed down?

Comments on this entry are closed.