Take a Bow, Mr. Speaker

Speaker John Boehner
Speaker John Boehner

Last night, Congress passed the McConnell-Reid plan to reopen the government and avoid a default. It also includes an income verification requirement for Obamacare and sets up a bicameral committee that will attempt to come to a large budget deal by December 13th. In return for a 16 day government shutdown and debt ceiling brinksmanship, Republicans received a cosmetic change in Obamacare that does nothing substantial.

It’s easy to look at that and lament the wasted time and needless suffering that was caused by it. It’s easy to wish that John Boehner had decided on September 30th to break the Hastert Rule and pass a clean continuing resolution and clean debt ceiling increase. It’s easy to look for blame and settle on the speaker. But it’s wrong.

It’s wrong, because it ignores the internal political dynamics that exists in the Republican House conference and it holds Boehner to a standard that no politician should be held to. If Boehner had brought to the floor a clean CR and clean debt ceiling bill, he would’ve faced a revolt amongst his members. They would’ve lambasted him in the media and challenged his speakership. It would’ve been ugly.

But it wouldn’t end there. It would have created a deep fissure in the GOP. Anyone who voted for those bills would’ve faced a primary challenge. It would’ve pitted any conservative in favor of a quick retreat against those wanting to fight. The Tea Party would have gone to war against the establishment. It would eliminate any chance that the House could pass legislation until 2015. It would also put the Republican House majority in jeopardy. Imagine a year of Republican-on-Republican attacks, nasty primaries and voters choosing to stay home. This is what journalists are asking Boehner to do when they ask him to cut the Tea Party loose. They are asking him to tear his party in half.

For Boehner, this was never about defunding Obamacare or extracting policy concessions from the White House. He knew the first was never going to happen and the second was highly unlikely. The White House was looking to end debt-ceiling hostage taking and wasn’t going to negotiate. Boehner wasn’t going to let the U.S. default so he always knew he was going to surrender.

Instead, this was all about party unity. The longer Boehner postponed the day of surrender, the more he could keep his conference unified. The Tea Party can’t survive without the Republican Party and the Republican Party can’t survive without the Tea Party. Over time, the extreme tactics of the Tea Party may disappear as the political and policy consequences of their actions slowly build, but that take elections. It takes establishment candidates defeating Tea Party candidates in primaries. A Republican civil war reduces the power of both. It’s easy to see why liberals would love that outcome – it would give Democrats immense control of the legislative process. But it would be terrible for the Republican party.

This is political dynamic that John Boehner has to deal with. He must lead members that vary widely across the conservative political spectrum, who are overeager to make an impact and are willing to use extreme tactics to get what they want. He must deal with a newly invigorated grassroots base that attempts to undermine and replace him at every turn. And he faces all of this in a time when the speakership has fewer powers than ever before.

The past three weeks were his greatest challenge. He had to build up as much credibility with the Tea Party as he possibly could, knowing he would have no choice but to betray them in the end. That meant listening to them and letting them guide his actions. His strategy was to do whatever the Tea Party wanted. His moderate members were always going to support him and have his back when the debt ceiling vote came. The right-wingers were the ones he had to court.

After the deal last night, the results are in: His strategy was a huge success.

His members gave him a standing ovation during their conference meeting Wednesday – the same meeting where he announced that he was surrendering. One supporter of the #DefundObamacare movement said that Boehner’s speakership is “more secure than ever.” Rep. Raul Labrador, one of the most conservative members of the House, said he’s “really proud of Speaker Boehner.” Another hard-line conservative, Rep. Phil Gingrey, said yesterday “Speaker Boehner’s got more courage in his little finger than most of us do in our entire bodies.” These are the same members who would have challenged his speakership if he attempted to pass a clean CR and clean debt ceiling bill.

This is Boehner’s greatest accomplishment. He kept his party unified in the face of overwhelming odds. The fact that they split on the vote yesterday is meaningless. The Republican House stands as one, even if it doesn’t always vote that way. Anyone who thinks this was an easy feat for the speaker hasn’t been watching the internal dynamics of the Republican conference. John Boehner has the toughest job in politics and he’s performed it masterfully.

Take a bow, Mr. Speaker.

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Debt Ceiling Negotiations Are Now Almost Unavoidable

Now that the government shutdown does not seem to be ending anytime soon, liberals are going to have to accept the fact that the debt ceiling is no longer non-negotiable, at least from a messaging standpoint. With both sides digging in, there seems to be little hope of solving the government shutdown before October 17 when we hit the debt limit. That means that any negotiations over a continuing resolution – which will happen eventually – will also have to include a debt ceiling raise. From Politico today:

Reid is highly unlikely to accept a budget deal if it does not increase the debt ceiling, Democratic sources said Tuesday. If the House GOP won’t back the Senate’s stopgap plan by later this week, Democrats are prepared to argue that it makes little sense to agree to a short-term spending bill if Congress is forced to resolve another fiscal crisis in just a matter of days.

A White House official said Tuesday night that the president could get behind Reid’s strategy.

Across the Capitol, House Republicans were quickly coming to a similar conclusion. Republicans were internally weighing including a debt ceiling hike in their demands to convene a House-Senate conference committee to discuss a bill to reopen the government. In the coming days, the GOP leadership is likely to change its rhetoric, with Republicans arguing about government funding and the debt ceiling in the same breath.

The two issues are now inherently connected. The president can maintain his position that he will not negotiate over the debt ceiling, but it will be harder to prove that is the case. In a worst case scenario, Democrats actually do negotiate over the debt ceiling and it becomes a piece in the compromise. That would once against set precedent for the debt ceiling to be used as an extortion device. Senate Majority Leader Harry Reid (D-NV) cannot let that happen.

But even the best case scenario is not very satisfying. In that situation, Reid declares that Congress must raise the debt limit and Republicans acquiesce. Except because of the tight schedule, the two sides continue negotiating over the CR. Eventually, they come to some type of agreement and both sides pass a bill with that includes a debt ceiling increase. In this case, the debt ceiling was never part of the negotiations and was never used as an extortion device, but that’s hard to prove. The media will analyze the deal as if it was part of a compromise. Republicans will head home to their constituents and say that they made the Democrats negotiate over the debt ceiling. They will say they broke President Obama’s no-negotiating position. Democrats will have no way to prove otherwise. It will be their word versus the Republican’s and the final deal will have a debt ceiling increase in it. Once again, the precedent will be set for using it as an extortion device.

There is one way to avoid all of this though: President Obama can unilaterally raise the debt ceiling. Unfortunately, this is highly unlikely to happen. The Administration ruled out using the 14th Amendment again yesterday and minting a trillion-dollar platinum coin seems even more absurd. Nevertheless, this would eliminate the need to raise the debt ceiling and prevent any negotiation over it. If Obama is really determined to not negotiate over the debt ceiling, he will look at both options carefully, because negotiating is now unavoidable.

John Boehner is a Genius

Turn the clock back a year. It’s the middle of the 2012 election and I tell you that President Obama will win a second term commandingly, Republicans will hold the House and Democrats will keep the Senate. On December 31, the Bush tax cuts expire and sequestration takes effect. Soon after that, we’ll hit the debt ceiling. President Obama also campaigned on raising taxes for those with incomes over $250,000, refuses to negotiate on the debt ceiling and everyone hates sequestration. Oh, and the Republican party will swing even further to the right in the aftermath of the election with Senate Minority Leader Mitch McConnell facing a primary challenge and Senators Ted Cruz (R-TX) and Rand Paul (R-KY) becoming leaders of the party. Over the next 12 months, what do you think the course of economic and tax policy will be?

Here would’ve been my guess:

  • Taxes raised for all those with incomes over $250,000
  • Capital gains and dividends taxed at a much higher rate, if not as ordinary income
  • Estate tax rises back to 40%
  • Payroll tax cut extension
  • Sequestration is rolled back with limited if any replacement cuts
  • Debt ceiling raised without a fight

Here’s where we may be at in just a couple of days:

  • Taxes raised for individuals with incomes over $400,000 and families over $450,000
  • Capital gains and dividends taxed at 20% (rising from 15%)
  • Estate tax rises back to 40%
  • No payroll tax cut extension
  • Sequestration is on the brink of becoming permanent
  • Debt ceiling is shaping up to be a major fight

That’s a lot of victories for Republicans and it’s in large part due to John Boehner. He has repeatedly out negotiated President Obama because he and his caucus seem more willing to break through the fiscal cliff, shutdown the government and default on our debt. In fact, Boehner is not willing to do any of those things more than Democrats are. He brokered a last second fiscal cliff deal that was a pretty big victory for Republicans under the circumstances (only raised taxes on individual income over $400,000). Over the current continuing resolution battle, Boehner is now hoping his caucus will give up their desperate demand to defund Obamacare and pass a clean CR. It’s looking like we could be heading for a government shutdown – the least damaging of all the potential fiscal crises, but damaging nonetheless. In the end though, this will likely be a huge victory for Republicans, even if they don’t treat it as such! Sequestration will stay in effect and while many Republicans don’t like the defense cuts, they are more than happy with the other cuts to discretionary spending. By changing the conversation to focus on defunding Obamacare, Boehner and his colleagues have made sequestration permanent. The upcoming debt ceiling battle is a place where Republicans have leverage. They know the President doesn’t want to breach it – even if he said he won’t negotiate – and Americans want there to be a negotiation. How this shapes up is anyone’s guess, but Boehner has put his caucus in an excellent shape.

Of course, not all of this is Boehner’s doing. A lot of times, he’s gone with the flow and benefited thanks to the credible threats of his right flank to do crazy things. He’s had trouble passing a farm bill and immigration reform doesn’t have a chance in the House. But nothing was going to happen no matter who was speaker. In addition, despite repeatedly promising Tea Party Republicans that they would take on Obamacare and find a way to stop it, he has convinced them to back off and move to the next battle. Most importantly, he’s done so without losing his speakership. I expect he’ll do the same with the debt ceiling since Boehner knows we can’t breach it. But it’s going to be very hard for the President not to negotiate it all. If Boehner extracts any concessions from him, it will be a monumental victory.

So while everyone is saying that John Boehner is irresponsible and has lost control, I think he’s a genius. A lot of the time, he’s going with the flow of his caucus. But he’s also used their craziness as leverage to extract meaningful concession from President Obama and Senate Democrats. At the same time, he’s avoided any fiscal disaster while keeping his speakership. I still hold out hope that he’s going to find a way around a government shutdown. He may not have an exact plan, but he has a strategy:

  1. Lie to his caucus, allow them to “take control” and make it seem as if disaster will strike
  2. Use that desperation to subtly change the conversation to the upcoming disaster and extract concessions from Democrats
  3. Go back to his caucus, say he got everything he could and convince them to vote to avoid the crisis at the last minute
  4. Keep his speakership by allowing himself to seem weak and extract some concessions
  5. Lather, rinse, repeat

It’s worked over and over again and allowed Republicans to swing policy to the right in situations where they have zero leverage. Boehner has stopped the base from causing a fiscal crisis and still kept his speakership. Call him irresponsible. Call him crazy. Call him reckless. Call him whatever you want, but John Boehner has been a brilliant speaker for the Republican Party and Democrats have underestimated him for far too long.