John Boehner is a Genius

September 27, 2013Danny Vinik 34 Comments

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:

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

Boehner Can’t Betray The Tea Party

September 12, 2013Danny Vinik 3 Comments

Salon’s Brian Beutler is out with an article this morning advising House Speaker John Boehner to give up waging repeated fights over the government budget and debt ceiling and instead agree to fund both for a lengthy period of a time. These fights do nothing, but divide the Republican party and hurt its imagine nationally. So, Beutler’s logical advice to the Speaker is to no longer pass stopgap fixes and get them off his plate until at least the midterm elections.

This makes a lot of sense on political grounds for the Republican party. The GOP wouldn’t have to revisit every few months whether they’re going to bankrupt the government or allow it to default, both political losers for the party. As for the country, these nasty fights unnecessarily hold back the economy and crowd out other important Congressional legislation such as immigration and tax reform.

The problem with Beutler’s strategy is that it would probably cost Boehner his speakership. Beutler says that if Boehner is worried about this, he could make a deal with House Minority Leader Nancy Pelosi that Democrats will support him if he’s challenged by his conservative base.

Speaker Boehner has no good options.

But this doesn’t actually accomplish much for the Speaker. He keeps his title while losing all of his power.

If the Speaker faces a rebellion from within his ranks and turns to Pelosi for help, it effectively makes her de-facto Speaker. As we’ve seen repeatedly, Tea Party Republicans aren’t going to sit idly by while the Speaker betrays their most deeply held interests: cutting government spending and defunding Obamacare. In reality, the House doesn’t have a chance of accomplishing either of those, but House Republicans don’t live in reality. They will see Boehner’s betrayal not as a practical solution to improve the image of the party, but as a validation of their not-to-secret belief that the Speaker is a RINO. And they won’t accept that.

Whoever rises up to challenge Boehner for his speakership – whether it be the Majority Leader, Eric Cantor, or someone well outside Republican leadership such as Justin Amash – will have the support from Tea Party groups around the country and many members of the Republican caucus. If Democrats come to Boehner’s aid and save his speakership, the Tea Party will not simply give up the fight. The Tea Party doesn’t give up fights, even ones they’ve lost repeatedly (see, Obamacare). They will continue to fight against everything Boehner does, if just to send a message to future speakers that the Tea Party is not to be messed with.

If Boehner hopes to accomplish anything else in this Congress, it will require large Democratic support and it will be up to Pelosi to provide that support. Anything Boehner wants to pass, he’ll have to run by the Minority Leader to see if she can whip the votes for it. That gives Pelosi all the power. That’s great for Democrats, but horrible for Republicans and even worse for Boehner. He’ll have no power in Congress and a Republican base that will never forgive him. That’s not a strategy the Speaker should pursue.

Boehner Retiring Doesn’t Necessarily Help President Obama

September 4, 2013Danny Vinik Leave a comment

Jonathan Chait posted an article today that outlines the optimistic scenario if Speaker Boehner retires after the 2014 elections. The midterm elections are far off still so we won’t know for a while if Boehner is sticking around or not, but Chait hypothesizes that if Boehner does decide that he’s done with political office, it could be a boon for the President’s second term:

The trouble in Washington is not so much Boehner himself, though he’s no prize, but Boehner’s desire to keep his job. A small minority of the most extreme Republicans in the House have managed to keep Boehner on a leash by threatening to depose him as Speaker if he displeases them. The Republicans hold a narrow enough majority that even an amateur-hour coup came within a handful of votes of deposing Boehner already. If Boehner wants to keep his job, he has to avoid displeasing his extremists, and his extremists are so detached from reality that they insist on wildly unrealistic demands on issues like the debt ceiling and Obamacare.

But if Boehner feels liberated to flee the House, then suddenly all sorts of governing possibilities open up. He can lift the debt ceiling and keep the government running. He could sign immigration reform, even cut a deal on the budget. There’s probably a majority in the House for all these things — it’s just a majority consisting mainly of Democrats along with a handful of Republicans. Boehner could use that majority and then ride off into the sunset to become a lobbyist, enjoy a huge raise, and play a lot more golf.

Everything Chait says there is true. If Boehner finally gets fed up with the extremists in his group and decides to govern, Congress could suddenly become quite productive (well, not that productive – there’s still the Senate filibuster). There are a couple of landmines here though.

First, Boehner probably wants to keep his speakership til the end of 2014. If he starts breaking the Hastert Rule frequently, his conference would likely revolt pretty quickly. Maybe the Speaker could make a deal with Minority Leader Nancy Pelosi so that he’d keep his speakership with significant Democratic support. But that would effectively give Pelosi control over the House. If Boehner needs the Minority Leader to keep his position and to pass anything, he doesn’t actually have much power. I can’t see Boehner putting himself in that position right before his retirement.

Second, this puts the rest of the Republican leadership in limbo. Do they support Boehner even as he pisses off a number of House Republicans? Or do they ditch him as well and give up their current leadership position in hopes of taking the speakership in the next Congress? A lame-duck Boehner who chose to govern would split House Republicans. It could get very messy. Does Boehner want to leave that as part of his legacy.

Third, Chait’s analysis rests on the idea that Boehner can “ride off into the sunset to become a lobbyist” and make a bunch of money. If he ruins his relationship with most of his Republican colleagues though, how will that look? How may firms on K-street are looking to hire a former Speaker who passed legislation right before his retirement that most of his party opposed? I imagine he’d still have a number of suitors, but he’ll make a lot more money and have a lot more friends if he rides out Republican opposition until the very end.

Finally, and most importantly, even if Boehner’s retirement helps the President move some of his agenda in the short run, it could hurt him even worse in the long run. A new Republican Speaker (assuming the Democrats do not retake the House) will be in the same position that Boehner currently finds himself in, balancing the moderates in his party who are looking to govern with the many extremists who reflexively oppose the President on everything. Boehner has done an excellent job appeasing the extremists during times of non-crisis while ensuring that they do not cause too much damage during crises (see the debt limit fight earlier this year). A new speaker will have less experience striking that balance and may face greater suspicion from the Tea Party. Even worse, if a Tea Party member is elected, we could find ourselves with a speaker who wants to shut down the government or breach the debt ceiling. That would be a disaster for Obama’s last two years in office.

So, if Boehner retires, does it really help the President? It’s certainly not clear.