It’s increasingly unlikely that Congress will work out a deal to solve the so-called “fiscal cliff” before the December 31 deadline.
This time two years ago, the ink was drying on the President’s signature of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.
The clock is ticking and by most public accounts, we are nowhere close to a deal. Especially now that the House couldn’t get the votes together for a deal.
Earlier this month, press secretary Jay Carney said that Speaker Boehner’s oddly named “Plan B” isn’t acceptable to President Obama because “it can’t pass the Senate.”
One wonders whether or not the President’s proposal can meet his own Senate passage test. What’s more, it’s worth asking whether Boehner’s Plan B can even pass the House — since it already failed once.
With less than a week left until the end of the year, this is pretty much where we are: the sides are talking, but no plan seems to exist that is guaranteed passage in either chamber.
Details are scarce. We’re only offered broad descriptions about rates and income thresholds. Specific line items are being kept out of the public eye to avoid a thousand side debates over the necessity of a certain program, or whether or not current funding levels are justified.
In 2010, a similar deadline loomed. A select group of lawmakers huddled in secret to work out a deal on expiring tax rates and other provisions. The details of the negotiations weren’t public, but the names of the negotiators were.
This time around, it appears no such secretive group exists.
Which means that either the only people doing the negotiating are the President and Congressional leadership or a super-secret group of lawmakers negotiating exists. The latter is doubtful, since secrets like this are too big to keep in a gossipy place like Congress.
In 2010, a deal was struck with time to spare. But not after weeks of deliberations behind closed doors. Once it was struck, it was swiftly passed by the Senate by a large margin, and eventually passed in the House by a vote of 277 – 148 (with mostly Democrats and a few conservative Republicans voting Nay).
The sentiment in 2010 was that most people wanted a deal. For a deal to happen, consensus had to be reached, and consensus is hard to build when you go through the normal process, since Congress has a tendency to pick things to death.
Thus, why the details were hashed out in private. Prying eyes will try to kill a deal. They tried. And failed.
Hundreds of lobbyists and activists converged on the hill to see if their sacred cows would be spared or slaughtered. Multiple calls, emails, impromptu office visits to this secretive cadre of elected officials took place on a daily basis. Usually in vain.
Most of those inquiries were ignored by those officials and their staff. Even confirming to a party that their provision was in the clear would make it more clear to others that their interests were at stake. Washington is a small town, and word travels fast.
Revealing much of anything would cue a flood of further lobbying — not that it wasn’t happening already in the form of spam emails from CapWiz . So the way the 2010 tax compromise happened was because people kept a tight ship, and a take it or leave it deal was presented to the rest of Congress.
Neither side seemed very happy with the 2010 deal, but compromises often yield ugly results. They took the deal.
In 2012, neither side seems to want a deal, or at least a deal like the one struck in 2010. Back then, the House was about to change hands and Democrats had to worry about whether or not a new Republican majority would be more insistent on getting their way. The incentive was there to compromise.
Like in December of 2010, an election has recently taken place and the voters have spoken. A “status quo” election as Fred Barnes described in THE WEEKLY STANDARD, since no chamber lost its majority and the President retained his job.
The President and his supports think this means voters sided with them. House Republicans think since they kept the House, the voters sided with them. Not a very propitious climate for a compromise.
Which leaves us with a few possibilities:
Boehner and Obama are closer than we think and a deal is close to being reached. This would probably require bi-partisan passage in both bodies, since the more polarizing members in each chamber are likely to eschew compromise.
We are going off of the cliff and a deal comes in January. If either side holds out in an attempt to cash in on an imaginary mandate come January, markets will crash and voter discontent will soar. It’s a risky gamble for either side, but it has the potential to pay dividends and can’t be ruled out.
No deal is in the works in the short-term. If enough members hold out, and the newly-elected 113th Congress can’t muster a deal, we could go over the fiscal cliff and stay there for months. Some conservatives want voters to see the real cost of a big government is – despite the fact deficits would still likely exist even under this scenario. Others don’t believe a compromise will truly cut spending and put the country on a path to fiscal sanity. Some liberals want to hold out for imposing even higher tax rates on high income earners and on capital gains, while others want to see deep cuts to defense spending.
A super-secret group of elected officials is working on a ‘Hail Mary’ like 2010. It is unlikely such a group could exist without some spurned member blowing its cover, but it’s always possible. There are retiring members like Senators Kyl, Conrad, Lieberman and Hutchison who are known deal makers and would avoid the pains of re-election. But retiring members don’t hold as much sway as Party leadership does with people who still have to be re-elected.
Will we get a deal? It’s always possible, but the incentives have changed for the worse since 2010.
And from the little we do know, there’s not much promise.