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Why The House Will Kill The Grand Bargain

Every time somebody suggests there might be a big deficit deal, and every time I catch myself thinking it could happen, I return to one basic question: How does this pass the House of Representatives? I've never heard a remotely persuasive answer to this question.

To understand the obstacles in place here, you need to return to the 1990 budget agreement. That was a deal between George Bush and Congress that ran along roughly similar lines to the agreement being floated in the press today: mostly spending cuts, with some tax hikes along with it. When presented with this deal, House Republicans, led by Newt Gingrich, revolted. Even with a Republican president lobbying for it, all but ten House Republicans opposed the deal. In the conservative mind, the 1990 budget deal was a gigantic failure -- "the fiscal equivalent of Yalta," as some conservatives put it. Indeed, the current Republican party can in many ways be traced back to the revolt against this deal, and the structure of the conservative movement is designed in large part to prevent a recurrence.

Now, in actual fact, the 1990 budget deal -- along with the 1993 deficit reduction program passed under Bill Clinton with exclusively Democratic support -- was literally the only successful example of shrinking government in the last three decades. Note the sharp, anomalous decline in spending beginning in 1990:

But never mind that. The reality doesn't matter for our purposes. The point is that, in the conservative mind, Republicans in 1990 were hoodwinked into accepting real tax hikes in return for spending cuts that never materialized.

1990 is a good baseline for comparison to any prospective budget deal today. What is different now? It's true that President Obama will probably offer a more favorable ratio of spending cuts to tax hikes than Bush got, and that the tax increases will come in the form of reducing tax expenditures rather than raising rates. On the other hand, the House GOP's voting base has grown far more conservative since 1990. Conservatives have instituted the systematic practice, largely unfamiliar in 1990, of deploying primary challenges against members who stray even slightly to the center.

What else? The current budget deal is attached to another measure, raising the debt ceiling, that is itself highly unpopular among Republicans. (Michelle Bachmann's first ad pledges never to vote to raise the debt ceiling, a position other Republican presidential candidates will feel pressure to emulate.) The president who will be the chief beneficiary of any deal, and bear the economic costs of failure, is a Democrat rather than a Republican. And where in 1990 it was possible to pass the deal through the House relying almost entirely on Democratic votes, the House GOP leadership now understands it needs to carry most Republicans:

McConnell and Boehner — but especially the speaker — can only back a proposal that does not alienate their rebellious, tea-party-inspired freshmen. Any deal has to be a significant change in government spending patterns, now and in the future, big enough to convince junior lawmakers and the conservative base back home that GOP leaders are serious about ending the recent flood of federal red ink.
“It’s harder to get a majority of the [freshman] class on board for something that isn’t revolutionary,” said Rep. Tim Scott (R-S.C.), a freshman who is a member of leadership.
Boehner also has to watch his own flanks. He cannot, and will not, support a deal with Obama that isn’t backed by Cantor and House Majority Whip Kevin McCarthy (R-Calif.).
If there was [an agreement] that got 75 Republicans and 150 Democrats, he’d have huge problems,” one GOP leadership aide said of Boehner. “He’s not going to do that.”


Anyway, so far, the conservative reaction to a potential budget deal seems to be total apoplexy. (For a sense of the gap between the centrist and conservative understanding of the situation, here's Rep. Paul Broun urging Congress to lower the debt ceiling.)

One voice we haven't heard from yet is Paul Ryan, and Ryan may be the one figure with the prestige to bring conservatives along to any deal. He's been quiet so far. But he voted against the Bowles-Simpson plan, and there's little indication he actually wants a grand bargain. James Capretta, who has Ryan's ear, fulminates against a budget deal. Capretta repeats the trope that Democrats hoodwinked Republicans in 1990, and proceeds to argue that a deal now would help Obama and hurt the GOP:

A $2 trillion or $3 trillion package, heavy on tax hikes and the usual assortment of Medicare and Medicaid regulatory tinkering, should be the Republicans’ worst nightmare. It will hand the president a huge political victory, leave the entitlement monolith just as it is, further entrench central government management of the health sector, and burden taxpayers even more.

This argument is probably correct, at least on its own terms. If you're dead set on implementing Paul Ryan's vision of government, then a budget deal is the last thing you want. You need the national debt to reach and stay at crisis levels, so that you can persuade voters that your otherwise-unacceptable budget is the only alternative to total fiscal destruction. And you need a Republican in the White House, which is probably harder if Obama has positioned himself in the center with a successful budget deal.

A lot is happening behind closed doors, so I can't draw any firm conclusions. But the evidence I see makes it hard to imagine any big budget deal passing the House.