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"Demagoguing" Your Way To Fiscal Responsibility

David Brooks, who has been talking to Republicans in Congress, thinks the special election earthquake will make them a bit more reluctant to go to the mat on the debt ceiling:

Sometime this summer, the Democrats and the Republicans will go toe-to-toe over whether to raise the debt ceiling. At the height of the confrontation, President Obama may well address the country and say that even though he has offered the Republicans more than $1 trillion in spending cuts (unspecified), the Republicans have not been willing to compromise on a deal. He will then announce that, even without an agreement, the U.S. will still have enough money to continue payments to its creditors.
Unfortunately, he will go on, the government will not have enough money to continue with many other programs. Federal agencies will send out letters advising parents that because of the deadlock in Congress, student loans will be suspended. Other letters will advise seniors to make arrangements with banks for credit lines until their Social Security checks can resume. National panic will ensue.
A few weeks ago, the Republicans might have been able to withstand this. Then it was possible to argue that Americans are so fed up with runaway spending and unsustainable debt that they would support a party brave enough to put the country on a sound fiscal footing. After the Republican defeat in New York’s 26th Congressional District, it is harder to argue that. After these results, 2012 looks more like a regular election — whichever party can be accused of cutting entitlements will get pummeled.

Brooks proceeds to say that Republicans he speaks with want to "find a way to reduce the debt without committing political suicide," by striking a Grand Bargain with Democrats. I have mixed feelings about the merits of a Grand Bargain -- it depends on, well, the merits of the legislation -- but I do want to point out a political reality here. Various deficit scolds have been warning that Democrats should not "demagogue" (i.e., describe in accurate but unflattering terms) the Republican budget. Such demagoguery makes people upset and less likely to have a very serious person discussion, and so on.

But the underlying reality is that the Republicans are much more resistant than Democrats to striking a middle ground solution. Forget the last twenty years of fiscal policy history, which consists of Republicans largely using their political capital to degrade the government's fiscal health and Democrats largely using their political capital to repair it. Even starting from the present day, it's mostly Democrats who have endorsed a balanced approach to deficit reduction involving both revenue and outlays. The main opposition is the Republican insistence that revenue cannot increase. (Recall that the sainted Paul Ryan, who has lambasted President Obama for failing to make the Bowles-Simpson commission his initial bargaining position, voted against the Bowles Simpson recommendation.)

The main obstacle, then, is the GOP's maximalism, driven by its fervent belief that it can rewrite the social compact entirely on its own terms. The special election debacle, and the threat of that tactic being used widely in 2012, may be giving the Republicans pause. It seems to me that the Democratic campaign against the Ryan budget increases rather than decreases the probability of a grand bargain.

To be sure, the special election also makes House Democrats more reluctant to support a Grand Bargain. Why would they let Republicans walk away from an issue that gives Democrats a chance to take back the majority? But the obstacle to the Grand Bargain was never House Democrats, it was House Republicans. I still think it's House Republicans, and I still don't think the leadership will risk enraging its base by striking a deal. But the chances are better now that the House GOP has caught a glimpse of its political mortality.