October 15, 2013

Senators are currently negotiating a way out of the crisis that would reopen the government until January 15th and raise the debt limit until February 7th, and set up normal talks to resolve differences over spending and debt. In this plan, both sides would exchange minor concessions. According to aides, either the deal would include both additional income verification (which Republicans want) and a delay of the reinsurance tax (which Dems and unions want), or it would include neither.

Meanwhile, the House GOP is coalescing around a plan that would also reopen the government and raise the debt limit by the same deadlines, but it wouldn’t set up normal budget talks and would require Dems to make unilateral concessions on Obamacare, such as nixing subsidies to Congress and staff and a repeal of the medical device tax and perhaps a contraception opt-out for employers.

The White House supports the former. Yet it is ripping the latter as “ransom.” Some media folks, such as Chuck Todd, Politico’s Ben White, and the New York Times’ Binyamin Appelbaum, all of whom are terrific reporters and/or analysts, are asking why, given what they perceive as minor differences between the plans. Appelbaum asks: “So the WH position is basically that demands by Senate Republicans are legitimate, and demands by House Republicans are extortionate?”

This is a good question, because the answer to it is a clarifying one. It goes to the heart of what this whole battle has been about from the beginning — and the degree to which the core difference between the two sides has gotten submerged under an avalanche of misleading claims and confusing reporting. Jonathan Chait explains:

The crucial fact about of the emerging Senate plan is that it fulfills the core Democratic demand that the debt ceiling not be ransomed for policy concessions. Democrats prefer to simply lift the debt ceiling, or abolish it altogether. For the sake of appearance, Republicans have asked to tie policy changes onto the debt-ceiling bill. But Democrats have insisted they won’t pay a ransom: The policy changes must be reciprocal. The Senate compromise accommodates that, by adding on two changes — beefed-up Obamacare income verification and the delay of a small tax — which are both minor in nature and a trade Democrats would have made without a debt-ceiling threat. Attaching mutually acceptable deals onto debt-ceiling hikes is historically normal. Using the debt ceiling as a hostage to force a party to accept policies it doesn’t like is not. [...]

The principle undergirding the emerging Senate bill — ending hostage tactics, and making all deals reciprocal — is unacceptable to House Republicans, who want to preserve debt-ceiling hostage-taking as a form of policy leverage. So, rather than wait for the Senate to act on its own, the House is attempting to move its own bill, which demands a small ransom: suspending the medical device tax, and eliminating employer health-care subsidies for congressional staff. The ransom is minor, but preserves the principle that the House can use the threat of default to force the president to accede to otherwise unacceptable policy demands, without making any policy concessions of its own.

The frequent GOP claim that Dems “refuse to negotiate” has obscured the true nature of the difference paralyzing the system. It is not over whether to negotiate over spending and debt. It’s an argument over what conditions under which budget negotiations should proceed.

When Chait claims the “principle undergirding the emerging Senate bill — ending hostage tactics, and making all deals reciprocal — is unacceptable to House Republicans,” that may sound like a partisan argument, because of the “hostage” imagery. But it isn’t. It’s a description of the actual Republican position – that it’s appropriate for the House to demand concessions from Dems in exchange for a debt ceiling hike, because setting such conditions for budget talks is within the House’s authority. Republicans don’t put it quite like that — they euphemistically claim it’s routine for budget deals to be “attached” to debt ceiling hikes. That’s a huge stretch, but putting that aside, the practical upshot of that argument is that, as long as Republicans are going to ask for extensive unilateral concessions in that context, it’s entirely proper for the threat of default and economic havoc to give House Republicans leverage to extract those concessions. (Privately, Paul Ryan has explicitly argued the debt limit must be retained as leverage against Obamacare.) Republicans believe this set of conditions is within the House’s authority to establish, and that it constitutes acceptable governing.

Democrats, by contrast, don’t believe this constitutes acceptable governing. They don’t believe budget negotiations should proceed under these conditions. They are not making an argument about what the House majority can legally or Constitutionally do; they are making an argument about what they believe the House majority should and shouldn’t do, about what does and doesn’t constitute good governing. They are making an argument about governing norms. The Dem argument is that this practice should be renounced by both sides. Dems believe making concessions under these conditions now will legitimize the GOP demand for negotiations to happen under them, making default later all but certain, because this sort of standoff will happen again and again, ultimately leading to miscalculation and disaster.

Republicans, wholly wedded to the “Dems won’t negotiate” talking point, never seriously acknowledged the actual Dem position here. They never understood that the incentives strongly argue for Dems not to concede on this basic principle, so Republicans don’t use the default threat as leverage next time. That’s why they underestimated Dem resolve.

The answer to Appelbaum’s question above is Yes. The Senate GOP’s demands are legitimate, because they are being made in negotiations which are not occurring in a context where Republicans are presuming the threat of disaster gives them unilateral leverage. The Senate talks accept as a given that default won’t happen and are centered on horsetrading within that context. The House GOP’s demands are extortionate, because they continue to be premised on the idea — again, one rooted in genuine views House Republicans hold about acceptable governing norms – that Dems should fork over unilateral concessions on Obamacare, because if they don’t, the consequence will be economic disaster.

You don’t need to side with one or the other camp in order to acknowledge the basic contours of this argument, or of this overall situation.

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