Category Economy

Being Honest with the Tea Party Doesn’t Work

Danny Vinik 1 Comment

One of the main criticisms of House Republican leaders, particularly Speaker John Boehner (R-OH), the past two weeks is that they lied to the Tea Party about what they could actually accomplish during these fiscal fights. It’s not particularly surprising that Obama isn’t negotiating or that Republicans are being overwhelmingly blamed for the shutdown. The thinking goes that if only Boehner had informed his members at the beginning that they had no chance in these fiscal fights, then it would be easy to cut a deal right now. But why?

What makes anyone think that the Tea Party would be less intransigent if Boehner and Co. hadn’t overpromised at the beginning?

Here’s a counterfactual: On September 28, Boehner holds a meeting with all his members and tells them the truth. President Obama really isn’t going to budge. He’ll allow a government shutdown and may even allow a default if necessary, because he believes these fights are about more than Obamacare. He believes they are about not setting the precedent for the minority party to use the budget and debt ceiling as leverage to extract policy concessions from the majority. Boehner says he doesn’t agree, but that’s the president’s stance and he’s not going to budge. He also tells them that it’s highly likely that Americans will blame Republicans for any shutdown or default and it could potentially risk their House majority in the midterm elections. Boehner even tells them that a default would be catastrophic and they can’t allow it to happen.

How do the Tea Party members react to that? Do they listen, synthesize everything the speaker said and agree to fight another day? Not at all.

That’s because, as Business Insider’s Josh Barro put it, they are living on another planet. Polling doesn’t mean anything. Breaching the debt ceiling wouldn’t be that bad. President Obama caved in 2011 so he’s bound to this time too.

Wrong. Wrong. Wrong. But these conservative members don’t care. They are on a blind crusade against Obamacare and will do everything in their power to stop it. It doesn’t matter what Boehner tells them. His words affect their mood, not their perception of reality.

If Boehner says that the president will cave and they have a real shot at taking down Obamacare, they cheer and support the speaker. That’s exactly what they want to hear.

If he tells them the truth like I outlined above, they sit in silence and find ways to undermine him. They simply won’t believe what the speaker says.

Being honest with these conservative members doesn’t work, because they simply don’t believe it.

Some journalists think that Boehner raised their expectations over these fiscal fights and that the intense Tea Party opposition is a result of their expectations not being met. But the Tea Party expected to stop Obamacare, no matter what the speaker said. Boehner just convinced them that he believed that they could stop Obamacare. That may have stoked their enthusiasm, but it didn’t change their expectations or their willingness to do anything to stop the law.

From Boehner’s perspective, this lie kept his party unified for a little bit longer while he searched for any way out. The Tea Party was always going to be furious by whatever deal he cuts, because it won’t substantially undermine Obamacare. If he had told them that at the beginning, he would’ve immediately split his party in half and put himself in an even worse negotiating position. Lying to them kept his members united and gave him time to work out a deal. It didn’t stoke their anger or increase their opposition to the eventual deal. That was coming no matter what.

The House GOP Proposal Is Still Extortion

Danny Vinik 5 Comments

There seems to be some confusion over why the House GOP’s new proposal is still extortion while the Senate deal that Harry Reid and Mitch McConnell brokered yesterday isn’t so let’s break this down.

In both deals, the continuing resolution lasts until January 15 and the debt ceiling is raised until February 7. As the White House has made abundantly clear, these are not concessions from either side. This is simply Congress doing its job.

Here’s how the Senate proposal shapes up:

Republicans get:                                               Democrats Get:

  • Income verification                                        •  Delay of reinsurance fee

There will also be a budget negotiation that occurs under the McConnell-Reid deal. See how both sides get something from each other?

Here’s the new House GOP plan:

Republicans get:                                               Democrats Get:

  • Income verification
  • Two-year delay of medical device tax
  • Version of Vitter Amendment
  • Ban on extraordinary measures

So, what exactly do Democrats get out of this? Nothing. House Republicans are still demanding concessions in return for funding the government and not defaulting. It’s the same hostage-taking tactics they’ve been using all along. Boehner and Co. have reduced their ransom demands significantly, which is why there is a lot of optimism that a deal will eventually get done, but it’s still ransom. That’s why the White House and Senate Democrats are vehemently against this plan. They are adamant that they will not agree to any deal that sets a precedent for using the debt ceiling as an extortion device and the House GOP plan still does that.

SHOCKER: It Was All A Bluff

Danny Vinik 2 Comments

Looks like the House is moving forward with their own bill this morning. Here are the details, from Robert Costa:

  • Continuing Resolution until 1/15
  • Debt Ceiling increase until 2/7
  • Vitter Amendment for members and cabinet members
  • Two-year medical device tax delay
  • Income verification
  • Ban on the use of extraordinary measures

That’s it. Nothing that really undermines Obamacare and no risk of heading over the debt limit. It’s still unclear if this can pass the House. It will likely get little, if any, Democratic support and many House conservatives are not going to be happy. In addition there isn’t anything that Senate Democrats will like so I’m sure they will reject it. I imagine Boehner may still have to break the Hastert Rule in the end with a bill somewhere in between what currently exists in the Senate and this one.

But look at how far the House has come! Boehner was never going to allow us to default. That’s abundantly clear now. In addition, he watered down the Vitter Amendment at the last second because he knew all along how awful it would be for congressional aides. It’s what everyone has been clamoring about for weeks. The House GOP finally admitted it at the last second. As for income verification, this is already part of the law and a number of conservatives have already rejected it as meaningless. A ban on extraordinary measures is a minor concession (and something I support).

That’s what House leadership is now PROPOSING. That’s their offer for opening the government and raising the debt ceiling. In addition, it seems that House Republicans are relatively unified behind this plan (Robert Costa reporting that there won’t be a revolt). We’ll see if that holds true in the end, but it’s important to realize how far the House GOP has come in their demands. They said all along they were willing to breach the debt ceiling if Obamacare wasn’t stopped. Instead, they’re accepting a corporate tax delay, a benefit cut for members, enforcing a part of Obamacare that already exists and a ban on a technical method to extend the debt ceiling. It confirms they were bluffing the entire time.