I think the underlying and underappreciated issue in the debt limit/deficit discussion is just how far apart the ideal point of the negotiators really is. And understanding that gap is important for understanding what Barack Obama and the Democrats are up to, including why liberals are suddenly finding the merits in the Gang of Six proposals (Jared Bernstein and Robert Greenstein) or even an all-spending-cut solution (from Jonathan Chait).
The Democrats…well, it depends on exactly who we’re talking about, but the median point among Congressional Democrats is probably something like this: keep spending at current levels with growth at GDP levels for most things, cut a fair bit from defense, let the Bush tax cuts expire, and fully implement ACA including the cost controls but with a public option added on. That gets the deficit under control – something that a lot of Democrats honestly seem to care about, perhaps because they’re concerned with good government and believe that large deficits undermine it.
The Republicans? Without invoking the Bachmann fringe, we can just look at what they’ve voted for already this year: return the size of the government to around where it was before Woodrow Wilson was in office. Except for the defense portion of the government, which should be roughly where it was at the height of the Cold War at an absolutely minimum. And tax cuts. It might add up, it might not; I don’t notice a whole lot of GOP concern about that (with, to be sure, some exceptions, such as Senator Tom Coburn). That was no wild bluff; virtually every House and Senate Republican voted for bills that would have implemented that agenda, including entirely unforced (albeit second-hand) votes on a Constitutional amendment this week that, title and dubious enactment mechanisms aside, was basically an attack on both the Great Society and New Deal understandings of the role of government in the US. Which they would be glad to tell anyone who is willing to listen to them.
Given that gap, it was never remotely plausible that either side would get anything close to what they wanted. Indeed, it was always likely that overall policy during the 112th would produce policies far closer to the Democratic ideal point, and virtually all of the options on the table do exactly that.
However, it was never at all plausible after November 2, 2010 that Obama and the Democrats could get through this year and next without losing on several fronts compared to what they had in the very liberal 111th Congress. And yet liberals seemed to believe that if only Obama negotiated properly he could avoid those losses. It just wasn’t going to happen.
So the proper way to see the current negotiations are in the context of watching both sides surrender. Republicans, as I’ve argued, are having to do most of the surrendering; what they’re going to get will be nothing remotely close to what they bid, and most of the drama of the past weeks has been trying to find a way to convince the House Crazy Caucus of that. But Democrats will have to surrender too. In that context, the question becomes what, exactly, they want to give up. Of course Democrats are upset about coming cuts to programs they believe are vital to the nation, and of course they’re upset about what they see as nonsense economic policy, and of course they’re upset, for that matter, about the possibility that they may make their best deal only to find that House Republicans who persist in believing things that are not true will still spike the who deal and send the economy into a tailspin anyway. And of course liberals should be pushing for the best deal they can get, and fighting for their priorities. But the bottom line is that whether it’s associated with the debt limit or with FY 2012 spending bills, Republicans are going to get some of what they want, there’s no magic way — not the 14th amendment, not the McConnell plan, not brilliant negotiating or brilliant speeches by the man in the White House — to make that go away. What we’re seeing now, therefore, is Democrats coming to grips with that reality, and battling over what specific losses they should absorb.