Both the New York Times and Politico have led with big stories about Democrats pushing Medicare and Medicaid cuts onto the table. It’s not at all clear that these stories carry news of new concessions the Democrats are willing to make. Medicare and Medicaid have been on the table since at least April, when the president’s deficit speech called for hundreds of billions in savings across the two programs. What you’re seeing, rather, is the White House emphasizing its willingness to cut Medicare and Medicaid as a way to highlight the GOP’s unwillingness to raise taxes.
In addition to being true, it’s working. Head over to David Brooks’s column, where you’ll read, “If the debt ceiling talks fail, independents voters will see that Democrats were willing to compromise but Republicans were not. If responsible Republicans don’t take control, independents will conclude that Republican fanaticism caused this default. They will conclude that Republicans are not fit to govern. And they will be right.” Or check in with Megan McArdle, who runs through the terrifying consequences of defaulting on either our debt or our major federal obligations and frets that she’s hearing from Republicans who prefer both outcomes to “raising one thin new dime in taxes.”
This gets to the central difference between the two parties’ mindsets, which also goes to the difference in their negotiating postures: Democrats have spent the past few months warning one another how bad default will be. Republicans have spent the past few months warning one another that the consequences of default are overstated, and that what would really hurt the economy are tax increases of any size, kind or color. You can take that as strategic — it gives them credibility in the negotiations — or simply foolish. But it’s driving the Republicans as surely as fear of the debt ceiling is driving Democrats.
On this, Democrats are right and Republicans are wrong. Take a long look at the report the Bipartisan Policy Center did laying out a day-by-day on what happens if we don’t raise the debt ceiling in time. You’re looking at calling a chaotic, immediate and unprecedented halt to 40 percent to 45 percent of federal spending. You’re looking at companies that contract with the federal government essentially shutting down. You’re looking at seniors and other Americans who rely on federal transfers going into hoarding mode. You’re looking at world in which a decision to fund interest on the debt, Medicare and Medicaid, Social Security, defense suppliers and unemployment insurance means you can’t pay military or FBI salaries, you have to stop food inspection and close the Centers for Disease Control, you halt all funding for food stamps and education, you shut down air control, everyone at NASA goes home, tax refunds stop, offshore oil rigs go uninspected, etc.
In other words, it’s going to hurt. Democrats are preparing for that world. Republicans are stuck in a world where too few of their members believe this will hurt for them to build political strategy around the immense pain a default is likely to bring.
Of course, every political strategy has its drawbacks. Democrats might win this one. But the cost of occupying the center was dangling a deal so good that even conservative columnists eventually had to admit Republicans are fools for refusing it. Democrats won’t be able to take that deal back. So though Democrats have done a good job setting Republicans up to take the hit when the debt ceiling caves in, they’ve also done a good job setting Republicans up to get the better end of the deal when they’re finally willing to come to the table.