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Over the Fiscal Cliff, by Hugo First (and Betty Won’t)

- October 3, 2012

Okay.  So, I have an insatiable weakness for corny fiscal cliff puns.  Hopefully this 1915 Clifford Berryman cartoon makes up for it.

In any case, I thought I’d weigh in briefly on the incessant Washington discussion about the likelihood that Congress and the president will be able to avoid going over the so-called fiscal cliff during the upcoming lame duck session of the 112th Congress.   With lawmakers unwilling to address the expiring tax cuts and impending sequester before they left town to campaign for the November elections, Congress has left the question to the lame duck session.  When lawmakers return, the emerging consensus goes, they will take their cue from the voters.  As the venerable Cokie Roberts put it the other day,

“Elections have consequences, and the immediate consequences of this election will be felt in the lame duck session of Congress….How the election is interpreted will affect the actions of the lame duck.”

This view appears repeatedly in coverage of the anticipated lame duck session, such as the Roll Call headline “Voters Will Likely Resolve Fiscal Cliff.”  The implication is that we can expect politics in lame duck and regular sessions to differ.  For example, the emerging wisdom suggests that if Obama is re-elected, Republicans will finally bend to cut a deal that raises taxes on upper income taxpayers; and if Romney wins, Republican resolve to extend the Bush tax cuts and to unwind at least the defense portion of the sequester will increase.

Political scientists certainly recognize the impact of elections on lawmaking and have explored the importance of electoral interpretations– most thoroughly perhaps in Grossback et. al.’s Mandate Politics.  But Grossback and his co-authors conclude that electoral mandates are rare and their legislative effects ephemeral.  Moreover, if we focus exclusively on a message from the voters, I think we risk losing sight of equally important electoral dynamics that are likely to play a role in the lame duck session.  Assuming for starters that the elections re-produce the status quo (Democrats in White House and Senate, GOP holding House), consider the following:

One often cited scenario maintains that Obama will be in a stronger position to generate support for a bipartisan plan, as House and Senate GOP– hearing the message from voters– will be chastened to break their pledge on raising taxes.  Observers envision a deal that includes a small “down payment” on the deficit, plus instructions to relevant committees to fast-track a plan in the new Congress that couples new revenues and entitlement savings.

An alternative scenario holds that Democrats– emboldened by their interpretation of the elections– might stick to their guns and let all of the Bush tax cuts expire in December.  In theory, this could be an attractive strategy for Democrats as it could enhance their party’s bargaining position come January: Allowing the tax cuts to expire would de-couple the fates of middle and upper income tax cuts, making it harder for the GOP to hold middle class tax rates hostage to their demands for extending upper income tax cuts as well.

That said, I think the barriers to either scenario– lame duck deal or Democrats diving off the cliff– are far higher than the emerging wisdom suggests.

First, reaching a deal in the lame duck session requires partisans to behave differently in lame duck and regular sessions: Freed of constituency ties (or reading the electoral tea leaves after a Romney loss), the House GOP would be expected to have a change of heart to agree to Democrats’ demands for new revenues.   But recent studies of voting in lame duck sessions (here and here) cast doubt on such expectations.  Modern lame-duck sessions, Jeff Jenkins and Tim Nokken have argued, “are more accurately characterized as extensions of regular sessions, with party leaders’ ability to pressure members and exercise negative agenda control remaining virtually constant across sessions.”  Jenkins and Nokken attribute this consistency to the low levels of turnout in the contemporary era, which “enables party leaders to carry over regular legislative strategies into the lame-duck sessions.”  Recall, for example, the Republican filibuster in the lame duck session in 2008 that killed an auto bailout deal that Democrats and the Bush White House had negotiated.   Obama’s impending move into the White House did not signal to the GOP that they should support a plan they viewed as too lenient on the automakers (and autoworkers’ benefits).  In short, legislators– even those losing their seats– tend to be guided by a mix of constituency and ideological influences across both lame duck and regular sessions.

Second, reaching a deal in the lame duck requires a sufficient number of House Republicans to vote for raising revenues.  Keep in mind that it is not enough for the House GOP to simply match Democratic votes for a deal.  Given what we saw throughout 2011 and 2012, Speaker Boehner is unlikely to bring any deal to the floor without the support of an extremely broad super-majority of his conference.  To do otherwise would risk his speaker ship– which must also be renewed by the GOP conference during the lame duck.  Given that we can expect partisan alignments from the regular session to be largely replicated in the lame duck, I’m hard pressed to see Boehner convince enough of his conference to concede so soon on Democrats’ demands for matching revenue increases with spending cuts.

Third, I’m somewhat skeptical that Democrats would have the political fortitude to go over the cliff.  Democrats could have stuck to their guns in the lame duck of 2010, forcing Republicans (still in the minority) to swallow an increase in upper income tax rates as the price for extending the middle class tax cuts.  That’s not the strategy Democrats chose then, and it strikes me as equally unlikely in 2012 with a GOP House majority.  Going over the cliff requires Democrats to take ownership of raising taxes on the middle class at Christmas.  That might be the strategically wise move for bolstering Democrats’ leverage come January.  But it also strikes me as an electorally doubtful holiday gift to voters.

Finally, if Romney wins the White House, the chance that Obama can seal a deal in the lame duck seems even lower.  Republicans would have little incentive to cooperate with Democrats on a deal, given their impending control of the White House.  Their priority in the lame duck would likely be to buy time by pushing to extend the tax cuts and to defer the sequester.   Nor would I expect Democrats to push to lead the country off the cliff, assuming Democrats would still be reluctant to raise taxes during the holiday season.

In other words, another round of kick the can seems the more likely outcome– regardless of who wins in November.  If the terms of a framework for a 2013 deal were sufficiently vague, then perhaps a re-elected Obama could secure GOP votes for a deal in the lame duck.  Still, after the elections, I’m skeptical that lawmakers will be able to agree on what message was sent by the voters, particularly if the status quo persists.  The 112th Congress couldn’t agree on very much; little reason for them to surprise us now.