Penn Political Review

Being Reasonable Is Not a Bargaining Strategy

Nathan E. July 28, 2011 Soapbox Blog Comments Off on Being Reasonable Is Not a Bargaining Strategy

Obama's conciliatory gestures are not being reciprocated.

We have arrived at crunch time. In 100 hours (give or take), the United States will no longer have money to pay the bills. Will the gas get shut off? Will we get harassing phone calls from China, Brazil, and Japan? No one quite knows. In an attempt to not find out, politicians in Washington, D.C., have been frantically negotiating, rounding up votes, and bullying fellow members of Congress to get a deal done. Yet with drastically different opinions on what we should do to resolve this crisis, we are stuck waiting for some sort of consensus to emerge from a fray where all parties involved seem to have diametrically opposed objectives.

The President has captured the high ground in this argument. A significant number of Republicans in Congress have tacked as far to the right as they possibly can—some will not vote for a debt-ceiling increase of any kind at all. Fortunately, all of the Congressional leadership supports an increase in the debt ceiling. There should be enough votes out there to raise the debt ceiling, but it all depends on what strings are attached.

Congress has decided that the price of a debt-ceiling increase is deficit reduction. Republicans in the House of Representatives think that the government should not collect a single dollar more in revenue and that all of the adjustment should come from spending cuts. Not only would such a plan be unprecedented in world history, but it would also be contrary to the beliefs of most Americans. This fact is revealed in polls that show, for instance, that even most Tea Party members support increasing some taxes as part of a deal. Nate Silver, the man behind the blog Five Thirty Eight, posits that the average Republican voter in this debate is closer to the average Democrat than they are to the average House Republican. In light of the statistical evidence, the House’s claim to be acting out what is desired by the “American people” rings hollow.

I’m not a firm believer in the Democrats, either. I think Republicans are right to be skeptical of Democratic insistence that they suddenly care about reducing federal spending. Many Republicans, including many in the current freshman class, have actually been proponents of cutting spending. Democrats like Harry Reid, on the other hand, have for years shown no particular interest in cutting spending; he would rather raise taxes than reduce benefits. There’s nothing necessarily wrong about that approach, but when Reid offers unspecified cuts in the future, it would be foolish not to be suspicious—few things in Washington are more common or ineffective than obscure committees created to shift responsibility to bureaucrats behind closed doors.

But at least it seems like Democrats are a bit more in line with popular sentiment and sound economics. We have two levers at our disposal in order to balance the budget: inflows and outflows. It makes more sense to use both options. Imagine a person trying to lose weight: he can either eat less or eat food with fewer calories. It makes the most sense to do some of both. Otherwise, he is either eating a single bag of Frito’s a day or 50 stalks of celery.

The biggest policy flaw in the Democrats’ stance is their inflexibility to compromise on entitlement spending. While they continue to talk about saving money by “eliminating waste,” the sheer scope of the problem makes it necessary that more changes than getting rid of waste are necessary to make these programs solvent. As Speaker Boehner said on Monday, these cherished programs for seniors won’t exist for future generations unless there are fundamental changes to their structure. $114,000,000,000,000 of unfunded liabilities from our entitlement programs pose a serious problem that not enough people acknowledge. Our best (and only) hope to continue to provide quality healthcare to the population is to attack the drivers of health-care costs, but that requires making serious choices about Social Security and Medicare. Unfortunately, the politics of the situation encourage Democrats to leave entitlements untouched and accuse the Republicans of trying to dismantle them. So Obama did the responsible thing and put entitlement spending on the table in exchange for revenue-raising tax reform. It is a shame that the Democrats in Congress jumped on him for subjecting entitlement programs to the same level of scrutiny that other programs will face.

The second key factor in the bills being considered now is the length of the debt ceiling increase. The president wants the ceiling to be raised enough that the government does not hit the ceiling before the next election. Some accuse him of political motivations. Given that he is a politician, I’m not sure if that is even really an accusation. But personal political fortunes aside, President Obama is certainly correct in saying that however difficult it is to broker a deal now, it will be far more challenging to do in the middle of an election cycle when candidates are busy appealing to the least-reasonable portion of his or her respective base. Not one person has suggested a single counterargument to what the president is say.

Yet President Obama seems to be caving. His insistence on a longer-term ceiling increase and significant revenue increases have resulted in a Republican House bill with a short-term increase and no revenue increases at all. He has endorsed a more favorable Senate plan and issuedvague threats about a veto of the House bill if it reaches his desk. If, however, the make-or-break moment comes, when his signature is the only thing that can prevent a default, it seems unbelievable that he would actually issue a veto, regardless of how righteous such that veto would have been. Sometimes you can have the high ground and still lose the battle.


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About The Author

Nathan, a rising sophomore at Penn, is from Missouri. His favorite book is the Complete Calvin and Hobbes.

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