We are facing a moment in Washington. Both Republicans and Democrats have decided, in poker lingo, to go all-in on the same hand, the looming set of mandatory across-the-board cuts known as the sequester. Both sides agree it is bad policy, which will be unnecessarily harmful to the economy, and both believe this bad policy once enacted in all of its ugliness will be politically beneficial to their team. Both cannot be right.
As it happens, these moments do not come along all that often. Most beltway theatrics are bluffs followed by folds. Someone gives a speech, calls for some reform, and then lets it die on the vine. Someone else expresses outrage, muscles an investigation, and it fizzles out. Republicans hold the debt ceiling hostage, and Obama agrees to deal of spending cuts with elaborate conditions. (Indeed this was how the sequester was created in the first place.) Obama threatens tax increases on all Americans, and Republicans give him tax increases on some of the rich ones.
For those tired of the constant talk of crises in Washington, be aware that this time is different. The chances of an 11th hour fix are incredibly small, in part because the stakes are lower than the last several showdowns. Even after the sequester is triggered, it’s impact will not be immediately traumatic and these effects will be easily reversible when the White House and Congressional Republicans cut a deal to replace the cuts with more sensible ways to address the deficit. But the longer it takes for a deal to be cut, the more the pain, especially if the squabbling stretches from weeks into months and is joined by the sequester’s dysfunctional doppleganger, a late March failure to agree on a new budget, which could force a government shutdown of non-essential federal services. Economic confidence is likely to be sapped. GDP could take a haircut. Unemployment will go up. Government employees will be furloughed, or might lose their jobs. Government services may be reduced, and military readiness could be sacrificed.
So the nation is likely to lose. The unanswered question is who will come out of the process politically ahead, or losing less. So for those watching at home, sit back and try to restrain your rage. Here is a quick scorecard for watching the machinations over the coming month.
The White House walks into the sequester with an unmistakable advantage in the polls, and a conviction that it has the upper hand. Obama’s approval is at three years highs, in the mid-50s, while House Republicans continue to tread water in the teens. His call for a combination of tax hikes and spending cuts to replace the sequester is favored three to one over Republican calls to only have more cuts. (In a recent Pew Poll for USA Today, even a majority of Republicans favor a balanced approach.) By a margin of 49% to 31% in the Pew Poll, Americans are prepared to blame Congressional Republicans over President Obama if the sequester goes into effect. Perhaps most importantly, the public continues to believe—by a margin of 49 to 44 in a recent Bloomberg poll–that Obama’s plan for more short term investment in education, energy and infrastructure has a better chance of creating jobs than the Republican calls for more spending cuts and lower taxes. Advantage: Obama
Congressional Republican leaders, meanwhile, are telling themselves that the national polls don’t matter. Republicans kept control of the House in 2012, despite a huge turnout of Obama voters, and 2014 is almost certain to be more friendly terrain, given the fact that Obama will not be on the ballot. As electoral odds-maker Charlie Cook recently pointed out, the number of genuinely up-for-grabs Congressional seats has been dwindling steadily for a decade, meaning most Republicans in Congress simply don’t have to worry about the national numbers. Their fortunes back home may in fact be far more dependent on bucking the political winds. That means that Republicans can, for the moment, may not have to worry about the short term hit they take as long as they can make the case in 2014 that the President was more responsible for whatever mess the country finds itself in at that point. Advantage: Congressional Republicans
Framing the Debate
Republicans are, of course, killing the messaging war on conservative talk radio, but that only goes so far. President Obama can still command a megaphone that none of them can muster, and he has a credibility with a broader swath of the American people. On Monday, Obama appeared at the White House with first responders he said would be hurt by the cuts, and Speaker John Boehner was forced to respond with an op-ed in the Wall Street Journal. In the coming weeks, White House aides are promising a full court press, with Presidential travel and lots of photo ops and outrage, to seek to define the still poorly understood sequester in the public mind. If it is seen as hurting core government functions, like education funding, food safety and military readiness, pressure will grow on Republicans to cave. But if Republicans can frame the sequesters as an antidote to the government waste, like video game research studies, and free cell phones, that most Americans suspect is rampant, their hand will be strengthened. History suggests that President has a distinct advantage on this one. Advantage: President Obama.
The Do-Nothing Scenario
History also tells us that when it comes to these sort of showdowns, the legal playing field matters a great deal. Twice in recent years, Obama has forced Republicans to blink, first by pushing through a continuation of a payroll tax cut without other spending cuts, and second by pushing for an increase in marginal tax rates for the wealthy when the Bush Tax Cuts were set to expire. In both cases, if Congress did not act, taxes would have gone up, something Republicans hate seeing happen. So they were forced to deal. In this case, however, the do-nothing scenario forces spending cuts, albeit badly designed ones, which Capitol Hill Republicans believe puts Obama naturally on defense. It tends to matter, in other words, whose hostage you are threatening to shoot in governing, and on this score, Republicans have a clear incentive to sit on their hands, even as they continue to argue that the actual cuts involved in the sequester are bad for America. Advantage: Congressional Republicans
Just because I scored this two-to-two does not mean this is an even fight. Talking to Republicans and Democrats drafting strategy, there is a clear difference in morale. Republicans are fighting a battle they never wanted to be fighting, with little momentum, a smaller soap box and the most fragile unity within their own caucus. Obama and the Democrats, by contrast, feel ascendent, buttressed by high polls and a recent ballot box win, and are ready to mark what they will believe to be the next body blow to the Republican no-new-taxes-ever vision of shrink-the-beast governing. That said, nothing is certain, and eventually, whether it be four days, four months, or a couple years from now, someone will have to blink. Anyone still could.