Who’s Bluffing Whom?

I have a confession to make: I love reading liberal policy blogs. For two reasons. First, because they give you lots of information. Second, because they give you so much information it’s easy to tell when they’re being totally clueless. Take this example from the New Republic’s Jonathan Chait. When he wants to, he can be a sharp observer of Washington politics. But often he doesn’t seem to want to — especially when the subject is the Democrats and what they’re really up to.

Today Chait noted some recent comments from Senate Majority Leader Mitch McConnell about the ongoing budget talks. I’ll reproduce Chait’s post in its entirety:

Mitch McConnell continues to send out confusing signals about a deficit agreement. On the one hand, he invokes the tradition of the grand bipartisan compromise:

“I actually think it would be easier to pass a comprehensive plan,” McConnell said. “The American people also want us to tackle the problem. And if we do it together, there will be no political price to be paid for it whatsoever. Let me give you a couple of examples. Ronald Reagan and [former House Speaker] Tip O’Neill fixed Social Security in 1983. It’s lasted for a generation. Reagan carried 49 of 50 states the next year. They did it together. Reagan and O’Neill did tax reform in 1986, Bill Clinton and Republicans did welfare reform in 1996, and Bill Clinton and Republicans actually balanced the budget for a number of years in the late 1990s.

“All of those efforts had significant political problems attached to them, but when you do it together, which one of the great opportunities presented by divided government, serendipitously nobody pays a price for it the next year because neither side can take advantage. So this is the perfect time for a grand, significant package on deficit and debt, and I hope that the president will not miss the opportunity.”

That’s clear enough. Both sides meet halfway and end up with something that neither regards as perfect but both consider an improvement over the status quo. That would be a deficit deal with a balanced mix of spending cuts and revenue increases. The 1983 Social Security agreement was exactly in that mold. The 1986 tax reform lowered rates, which Republicans liked, and increased progressivity, which Democrats liked.

But McConnell also says the deal must consist entirely of spending cuts:

“I can say pretty confidently, as the speaker has, that we are not going to raise taxes in this agreement,” McConnell told National Journal during a lengthy interview in his Capitol office. “And what the president ought to say to his own political left is, ‘Those crazy Republicans won’t let me raise taxes, but we need to do this for the country.’ ”

Well, okay. Maybe he can hold the debt ceiling hostage to making policy changes that McConnell approves of but Obama doesn’t. That would means that Obama is free to go to the public and denounce the cuts he was forced to make — i.e., “take advantage.”

McConnell seems not to understand the difference between a hostage negotiation and a normal political compromise. But it’s Obama’s responsibility to correct this confusion, and it seems increasingly likely that he has failed to do so.

It seems as if Chait didn’t read the McConnell quote that he himself posted. Let me point out the key sentence: “And what the president ought to say to his own political left is, ‘Those crazy Republicans won’t let me raise taxes, but we need to do this for the country.’ ”

Bingo. That’s what these negotiations are really about. Now, I actually tend to assume the final budget deal will include something that can be portrayed as a “tax increase” — i.e. removing loopholes and exemptions from the tax code (which the House Republicans have now decreed should not be counted as a tax hike). But there’s lots of other nasty stuff that Obama may want to do that it would be convenient to blame on “those crazy Republicans” who are threatening to take down the economy. Like, for example, gutting Medicaid.

Chait seems unable to process this. In a normal “grand bargain,” the Democrats give the Republicans cover to cut spending and the Republicans give the Democrats cover to raise taxes. Each side gets something, and in return each side protects the other side from the political consequences. But in these negotiations, as McConnell says, there’s an additional element: the Republican leadership is trying to give Obama cover to get less in return than his liberal base thinks he should get. By blaming it all on “those crazy Republicans,” Obama can then sign off on a savage budget deal that puts substantive meat on the anti-big-government image he’s been rhetorically building for himself over the past year and a half.

The liberal policy blogs can process the idea that Obama is a bad negotiator. What they can’t wrap their minds around is the idea that his blundering might be a bit of an act.