There are two ways to read the current stalemate in the debt-ceiling negotiations. There’s David Brooks’s take, which is that watching Republicans pass up “the deal of the century” should leave conservatives convinced there’s something wrong with the GOP. But you can also read it the opposite way: Democrats control the White House and the Senate, Obama is the most popular national political figure, a balanced approach to deficit reduction outpolls plans made entirely of spending cuts, and yet Democrats are still offering recalcitrant Republicans the deal of the century rather than taking to the ramparts. What’s wrong with them?
To put some numbers to this, I asked the fine folks over at the Center on Budget and Policy Priorities to help me break down the deficit-reduction deals passed by Presidents Ronald Reagan, George H.W. Bush and Bill Clinton.
As you can see on the graph, in each case, taxes were at least a third of the total, and in Reagan’s case, his massive tax cuts were followed by deficit-reduction deals that actually relied on tax increases. Today, tea party conservatives would be begging Sen. Jim DeMint to primary the Gipper.
Bush also included taxes in his deal, and Clinton relied heavily on taxes in his first deficit-reduction bill, which passed without Republican votes. In 1997, when he was working with Republicans, he actually cut taxes slightly while passing spending cuts. But of course the economy was in much better shape then, and Clinton had already increased revenues substantially.
The one-third rule doesn’t break down until you get to the deal Obama reportedly offered Republicans in the first round of debt-ceiling talks: $2 trillion in spending cuts for $400 billion in taxes, or an 83:17 split. And that, if anything, understates how good of a deal Republicans are getting. Tax revenues and rates are much, much lower than they were under Reagan, Bush or Clinton. And next year, Obama is pledging to extend most of the Bush tax cuts, which amounts to a $3 trillion-plus tax cut against current law.
It’s safe to say at this point that the White House is starting to get the credit it wants for working hard to find a compromise even as Republicans work hard to resist one. But that’s not a triumph of messaging. It is, if anything, an understatement based on the White House’s willingness to give congressional Republicans a much more lopsided deal than Reagan, Bush or Clinton presided over. Republicans might be fools for passing on it, but if and when they finally say “yes,” a lot of Democrats are going to be wondering whether the Democrats were suckers for offering it.