The White House and its allies have been portraying this week’s fiscal cliff deal as a clear, breakthrough victory. And in a way, they’re right. For 22 years, not a single Republican voted for an income tax rate hike – until this week. And that tax hike was part of a package that left social safety net programs untouched, and that also extended unemployment benefits and several tax credits that are vital to the working poor and middle class.
So yes, the deal that was cut this week was a policy victory much more for Democrats than Republicans. And given the Obama-era GOP’s obstructionist devotion, it’s remarkable that it made it through a Republican-controlled House – remarkable enough to make you wonder what the GOP could possibly have been thinking.
The answer, of course, is that Republicans are convinced they can cut a new deal over the next few months, one that will reflect their zeal for making deep cuts in safety net programs. They believe this because this week’s deal left the big questions about entitlements unresolved. So instead of addressing Medicare and Social Security in the face of a deadline that seemed to give President Obama more leverage, Republicans will now pursue their agenda in the face of three deadlines they think will give them the upper hand: the debt ceiling (which must be addressed by early March), the $1.2 trillion sequester (automatic cuts now slated to be go into effect on March 1) and the continuing resolution that funds the government (due to expire in late March).
There is real anger on the right over this week’s deal, because of the tax hikes and lack of spending cuts. As Jonathan Chait notes, this anger is coming from conservatives who do not recognize that the presence of a Democratic White House and Democratic Senate means the right can’t at this moment achieve 100 percent of its goals. Other, more politically sensible Republicans do understand this, which is why the cliff deal ultimately went through. Obama and Democrats wanted tax hikes and there was a looming statutory deadline that would have resulted in far bigger tax hikes than Obama was seeking; so these Republicans settled for limiting the scope of the hike as much as possible and pushing off the entitlement portion of the debate.
These more politically sensible Republicans, who represent a majority of their conference in the Senate and probably the House too, now have two reasons to push hard for deep Medicare and Social Security cuts. For one thing, as Chait points out, it’s what they believe in ideologically. But the anger among politically clueless conservatives means that the more sensible types – the ones whose fingerprints are all over the cliff deal – now face a purity test: Either they deliver the sorts of cuts the right dreams of or they’ll risk being branded sellouts and paying the price in Republican primaries. This explains, for instance, why Lindsey Graham – a prime prospect for a conservative primary challenge in 2014 – immediately pivoted from voting for the cliff deal to spelling out demands that the Medicare eligibility age be raised and that chained CPI be adopted to calculate Social Security benefits.
It also explains why Mitch McConnell, who brokered this week’s deal with the White House and who also faces a possible ’14 primary challenge, framed the coming entitlement debate this way in an Op-Ed that ran yesterday:
Predictably, the President is already claiming that his tax hike on the “rich” isn’t enough. I have news for him: the moment that he and virtually every elected Democrat in Washington signed off on the terms of the current arrangement, it was the last word on taxes. That debate is over. Now the conversation turns to cutting spending on the government programs that are the real source of the nation’s fiscal imbalance. And the upcoming debate on the debt limit is the perfect time to have that discussion.
This is a key point, because the White House has been insisting that a bigger deficit reduction package in the next few months must contain an equal balance of revenue increases and spending cuts. But McConnell’s position is essentially that at least $2.7 trillion in deficit reduction ($1.2 trillion by offsetting the sequester and $1.5 trillion as part of any deal to raise the debt ceiling ) must be achieved in the next few months and that all of it must come from spending cuts. This is not at all the White House’s interpretation of what was decided this week, but it’s what Republicans will insist on – and what Republicans like McConnell (and House Speaker John Boehner, who is making similar noises) have to insist on in order to prove to angry conservatives that they haven’t sold them out.
This is why some on the left would have preferred Obama to test his fiscal cliff leverage more. Maybe if he’d let Jan. 1 come and go with no deal, the GOP could have been forced into accepting a deal that also addressed the debt ceiling – taking away a source of leverage the GOP is now claiming for the entitlement fight. Of course, it’s also possible Obama would have emerged with a worse deal if he’d waited until after Jan. 1.
Both sides will be tested in the months ahead. There is trepidation on the left that Obama, who has flirted with some serious cuts to Medicare and Social Security before, will go too far in pursuit of a deficit reduction deal with the GOP – especially if he’s faced with the threat of a debt default. That there are many Democrats echoing the GOP line about the existence of an “entitlement crisis” could add to the pressure on Obama to cave. And on the right, there is immense pressure on key players like McConnell and Boehner (and, really, any senator or House member who doesn’t want a primary fight) to come away with steep entitlement cuts, with no more concessions on taxes.
So if it seems like Republicans rolled over a bit in the fiscal cliff fight, there’s a reason: It cleared the way for the real battle.