If Obama accepts the kind of "grand bargain" that has been laid out for him, this will have been the least consequential election of our lifetime.
In a nutshell, here's the proposed trade:
Republicans will allow Obama to eviscerate Medicare, Social Security, and Medicaid - and you know full well who will take the blame - in exchange for Obama giving them the continued tax breaks for the rich that they desperately desire.See the problem here?
Its stupid policy. Its stupid politics.
Here are three hypotheses to mull:
1. The expiry of the "Bush" tax cuts will hurt the overall economy more, and blue states more
(Blue states already contribute a disproportionate share of taxes, and therefore increasing taxes will likely hit blue states harder.)
Addressing this immediately is arguably a top political priority.
(It is also, by the way, long past time to stop reinforcing Republican bullshit branding with constant reference to "Bush" tax cuts. Lets introduce a nice, new, simple, clean set of retroactive, but "permanent" tax cuts for those making less than $250K - and call it something new.)
2. The beginning of the "sequester" will hurt red states more
The famous Republican K Street Project has, over the last 20 years, erected a grand, baroque spoils system in the form of elaborate pork sluices to steer blue state tax dollars to red state agricultural conglomerates, oil companies, and military manufacturers in the form of contracts and subsidies.
Interrupting the pork flow will therefore hurt red states more.
The longer this drags, the more red state politicians should be willing to accept a reasonable longer-term bargain on spending priorities and cuts.
3. Trying to address the taxing and spending problems simultaneously as part of a "grand bargain" will result in Republican posturing and dragging out of negotiations until the last minute... when they'll once again light the molotov cocktails and start the filibusters.
This is the defining modus operandi of modern Republican politics, seen everywhere from the Iran-Contra investigation findings 20 years ago on down to the health care reform clusterfuck.
In game theory, what do you do when the counterparty always defects?
You retaliate, if you can (partly what the sequester does).
But more fundamentally, the obvious counter-measure is to push smaller, simpler bills.If the Administration lets this turn into a comprehensive tax overhaul negotiation, it will take forever, and Boehner will once again get 94% of what he wants.
Obama should let the tax cuts expire and then introduce a simple bill, not linked to anything else, to reinstate all the tax cuts for those making less than $250K.
Let's have a huge public fight with Republicans about this
And there will be consequences if Boehner gets what he wants.
Cheesing off seniors with Medicare and Social Security cuts will not only increase inequality (hurting the economy), but will very effectively roll back the supposed demographic advantage that everyone is so excited about the last few days for another election or two.
Gouging Medicaid would be more politically expedient, but how ironic would that be? Obama would be selling out women, minorities, and young people - who collectively comprise something like 75% of Medicaid beneficiaries - the keystones of the coalition that just put him over the top.
Romney would have made savage cuts and given huge tax breaks to the wealthy out of ideology. Obama seems to be threatening to do something similar out of some mistaken concept about how his "legacy" will play out.
If he does dive into the swamp of trying to negotiate a grand bargain, this will arguably have been the least consequential election of our lifetimes.