Jonathan Chait this morning hit the president pretty harshly for surrendering the bargaining leverage that the expiring Bush-era tax cuts give him, and generally for poor bargaining. Matt Yglesias responded by making the case for trading that leverage for other things. Greg Sargent has also reported the White House’s view of things, which includes the argument that tax leverage isn’t all some liberals believe it is.
What to make of all of this?
I think the point that Yglesias makes is a real good one. Liberals, ever since the debt-limit fiasco, have been excited about the tax expiration part of the “fiscal cliff” — hey, this time, the Democrats have leverage! And I think that if it was just about taxes, that would be correct. Yes, in the new Congress, Republicans would be (as Greg reports the WH thinking) free to pass a tax bill that fit their priorities better, but so what? Democrats could offer the levels liberal want, and Republicans would, in fact, as liberals have been arguing, have an extremely difficult position to defend; a stalemate* there would seem to strongly favor the Democrats.
But it’s not just about taxes. There are lots and lots and lots of moving parts here, and overall it’s not entirely clear which side is less unhappy with a complete impasse. I mean, just on the issues, and not counting the question of whether Republicans are eager to hold their breath until the country turns blue just to get their way. In other words, Democrats have more leverage now than they did in summer 2011, but they don’t have all the leverage. Sure, they can attempt to decouple taxes from everything else and get a win on taxes, but it’s not at all clear that’s the best overall strategy.
All that said … it’s also not at all clear that the deal the Democrats appear to be moving toward really works all that well from them. I’d keep in mind that the details matter a lot, and early media reports could certainly be anywhere from mostly correct to way, way, off — remember, both sides have all sorts of incentives to spin, and not all of those incentives are even going to be easy to figure out. So I’m not going to try to guess who will get the better of things. I’m only going to say that the theories that Democrats should have been easy winners but for the poor negotiation skills of the president, or for the fecklessness of some Senate Democrats, or (as others have argued) because President Obama really secretly opposes Democratic priorities, just won’t cut it. Both sides have leverage here, and neither side was likely to get everything they wanted. We’ll really have to wait to see the details before we can even start to guess who “won.”
*”Stalemate”? Yes. A bargaining impasse is a stalemate. Yes, I know that’s not what it means in chess. Who cares? It’s a perfectly good word, well understood by everyone, for a negotiations standoff. There’s no different but similar situation which “stalemate” would fit better, so that wasting it on “impasse” loses something. I see no reason to abandon it.