Furthermore, the GOP’s position isn’t really “we’re done on revenue”—it’s more like “we’re done, unless the president convinces us not to be.” If the president shows willingness to give in on entitlements, enough Republicans might accept some tax increases.
There is at least rhetorical openness among some Republicans to that kind of a deal. On Face the Nation, Sen. Lindsey Graham endorsed a deal where revenue gained through tax reform would go toward deficit reduction in exchange for trimming entitlements. Former Gov. Jeb Bush has said an ultimate deal could include tax revenue.
The benefit of a grand bargain has always been clear to both sides. While a bigger deal means more complexity and lobbyists, it also means more ways to buy off various opponents. Some Republicans can be convinced that voting for revenue that comes from changes in the tax code is OK because those changes will make tax regulations simpler, which will in turn promote growth. Some Democrats can be persuaded that you can only save entitlements by reforming them.
For many Democrats, talk of a grand bargain is another head-fake. Some Republicans may say they are open to a deal, but when the details are put forward, they’ll only ask for more. That is what torpedoed negotiations in the summer of 2011 and every attempt since. One reason the rhetoric never matches up is that politicians can have it both ways. They can proclaim the desire for a compromise approach, but then raise the bar on specific measures well beyond any reasonable standard. A cynic might also point out that Sen. Graham, who faces a possible primary challenge, is going to have a lot of incentives to set a standard for entitlement reform that Obama can never meet.
If you insist on being an optimist, you must believe that elections and polls mean something, but that the sequestration fight wasn’t a fair test of that proposition. Polls show there is overwhelming public support for a budget agreement that includes revenue from tax increases and spending cuts. In a recent Pew poll, 76 percent of people said that the president and Congress should focus on a combination of spending cuts and tax increases to reduce the budget deficit. Just 19 percent agree with the Republican position that tax increases should be kept out of a deal.
Despite a core group of Republicans who will never vote for revenue from tax increases and a smaller group of Democrats who won’t vote for entitlement reform, there are enough politicians who will feel enough pressure to back a deal. The fiscal cliff, debt limit, and sequester negotiations took place in an environment cluttered by claims and counter-claims about the disasters that would result. In a more extended, slightly longer debate, the ultimate choices may be clearer and less likely to be sabotaged by histrionics. Lawmakers and the press will have less cause to get distracted.
Math may finally kick in, too. If lawmakers want to tackle the deficit, after sequestration cuts, there’s just not that much more you can cut out of the discretionary part of the budget to solve the problem and stay in office. You can only get deficit reduction of a significant size from the tax code or entitlements, and in a divided government that means deal making.
A final grand bargain only happens if the president can build what he calls the “common sense caucus” in the Senate. He was on the phone with Republicans over the weekend trying to start the negotiations. The White House thinks there are enough Republican senators open to reason.
The president’s pitch is that while the sequester does nothing to reform entitlements, nothing to reform the tax code, and ultimately does little to reduce the deficit, the big deal the president wants cuts spending, finally takes on entitlements (though not fully), and all for the price of revenues that Boehner has put forward before. On the Democratic side, there are several senators up for re-election in conservative states who need to show that they are cutting spending and reducing the deficit.
A bipartisan, group of senators might give Boehner cover to allow the House to take a vote and not require that it pass with a majority of Republicans. He’s already taken that route three times since the election—on the fiscal cliff deal, Hurricane Sandy relief, and the Violence Against Women Act.
Maybe this case proves the difficulty of being an optimist in Washington today better than the underlying reasons for optimism. Retaining faith requires some breath holding, self-delusion and, in the end, prayer.