January 2, 2013

J. Scott Applewhite/AP

By any measure, the fiscal deal that finally passed the House yesterday should have been something House Republicans could have enthusiastically supported. After all, as Jonathan Weisman put it, the bill “locks in virtually all of the Bush-era tax cuts, exempts almost all estates from taxation, and enshrines the former president’s credo that dividends and capital gains should be taxed equally and gently.”

Yet in order to get this through the House, we had to go through endless drama, histrionics, threats, and theatrics. And in the end, only 85 of 236 House Republicans voted for it — barely more than a third — meaning it passed largely because of Democratic support.

This perfectly captures what has become of today’s Republican Party. And it doesn’t bode well for the coming debt ceiling battle, or indeed, for key chunks of Obama’s whole second term agenda.

The story is being widely reported today as proof the GOP finally broke from decades of anti-tax orthodoxy. And that’s true, at least in the sense that Senate Republicans overwhelmingly supported the final deal. But the more important point is that a majority of House Republicans didn’t break from it — despite the action of their Senate counterparts — signaling that literally any kind of compromise with them may simply be impossible.

This is the inevitable result of the GOP’s collective decision to organize itself for years around the idea that even the tiniest of tax rate increases on the smallest minority of super rich Americans is nothing short of apostasy. If yesterday’s events were such a horrific defeat for the GOP, as many conservatives are telling us, it’s only because Republican leaders have spent months or years drumming it into GOP base voters’ heads that the most modest of tax increases on the very richest among us would constitute a sellout of deeply sacred principles. Remember when every GOP presidential nominee vowed not to accept even a 10 to one ratio of spending cuts to tax increases? Such stuff is not just bombastic primary rhetoric designed to feed the true believers. For many House Republicans, this idea — and the broader refusal to compromise at any cost — seems to have become a deeply held and guiding governing principle.

What does that tell us about what’s next? Last night Obama reiterated his vow not to negotiate if Republicans hold the debt ceiling hostage. That’s good. But I’m skeptical it will make any difference. Yesterday’s compromise has unleashed total fury among conservatives, and the pressure on Republicans to mount a sustained confrontation over the debt ceiling — and not to back down until they win major entitlement cuts — will be intense. Individual Republicans in safe districts are isolated from the currents of national opinion and have plenty of incentives to continue acting exactly as they are.

The other day I speculated that House conservatives may simply no longer be capable of playing a constructive or meaningful role in the conversation over how to put the country on a stable economic and fiscal footing. The events of the last few days do little to dispel that impression. With the debt ceiling battle looming, the only chance of future governing compromises may reside in the ability to build coalitions weighted towards House Democrats that also include crossover Republicans. The worst is yet to come.

* White House didn’t buy conventional wisdom about deal: The above leads to the next big question: Did Obama cost himself leverage in the coming debt ceiling fight by giving some ground on tax rates and encouraging Republicans to hold it hostage? Politico has a deep dive into the behind-the-scenes negotiations over the fiscal deal, and reports Obama calculated that the view from the left about giving away leverage was all wrong:

The president did not believe the dynamic would suddenly shift in his favor after Jan. 1, rejecting the conventional wisdom in Washington that all sides would have more flexibility after higher tax rates took effect. Republicans were no more likely to compromise after the deadline than before it, the White House concluded. And there was a very real fear that a resolution wouldn’t come for weeks, perhaps not before the country hit the debt limit in late February — a nightmare scenario that the president believed would destroy not only his leverage but also the still-fragile economy.

That dovetails with what I speculated the other day: Even without a deal, Republicans might not (contrary to expectations) have felt any more pressure to cooperate with the White House. Given the conduct of House Republicans yesterday, it’s not clear anything can stave off a debt ceiling battle.

* All of a sudden, a tax “hike” becomes a tax “cut”: One amusing side note to House passage of the Senate deal: Republicans, now that they agreed to support it, are hailing the arrangement as “the largest tax cut in history.”

As you’ll recall, Republicans criticized the Dem push to continue the tax cuts on the middle class as a “tax hike” by Republicans for months, because it allowed taxes to go up on the wealthiest top two percent. But now, because  all the cuts had expired, Republicans can now allow that this is, indeed, a tax cut. Of course, it always was a middle class tax cut, or at least the continuation of one.

* Tax vote to become issue in 2016 GOP primary? An interesting subplot to the tax vote: Senator Marco Rubio conspicuously voted against the compromise in the Senate; but last night, Rep. Paul Ryan, to demonstrate to colleagues the seriousness of the moment, voted for it. Given that both are expected to run for president, it’ll be interesting to see whether this vote looms large in the primary as a litmus test issue similar to the ones that drove last year’s GOP battle.

* Conservatives won’t forgive this vote: The Tweet of the day, from Erick Erickson, reacting to Paul Ryan’s vote for the compromise, says it all:

Thus ends the Paul Ryan 2016 Presidential Exploratory Committee.

* By voting against House Republicans avoid primaries: Josh Barro notes a key reason so many House GOPers had to vote against yesterday’s compromise:

Voting for Plan B, or for the Senate fiscal cliff deal, or even for an amended version of the Senate deal, can open a Republican incumbent to attacks from conservative primary challengers and anti-spending groups like FreedomWorks and the Club for Growth.

 Yes — another reason House conservatives may not be able to participate meaningfully in the conversation over how to move the country forward.

 * Fiscal cliff deal leaves threats to economy in place: A must read from Zachary Goldfarb detailing that for all the hoopla, the compromise leaves in place a series of very real threats to the economy, from the expiration of the payroll tax cut to the prospect for another debt ceiling showdown. However, as Goldfarb notes, the deal may have prevented a slide into recession by putting off spending cuts and extending tax cuts for almost all taxpayers.

What all this really illustrates is how much more remains to be resolved, and how high the stakes remain — the battles ahead aren’t just political; the fate of the fragile recovery still remains uncertain.

* And are prospects for gun reform looking up? National Journal has a nice piece rounding up all the “pro-gun” Democrats in Congress who are now very much open to real gun law reform in the wake of the Newtown massacre. It’s another sign that the landscape may have genuinely shifted this time.

 What else?

 

Greg Sargent writes The Plum Line blog, a reported opinion blog with a liberal slant -- what you might call “opinionated reporting” from the left.