RSS Feed MenuThe Republican lead in the Gallup generic ballot survey stands at 10 percent and there is a growing consensus that a wave is, indeed, building that will flip the House back to the Republicans. An increasing number of observers are also hinting Republicans have a good chance to capture the Senate as well. These outcomes are not written in stone but it is increasingly worth asking: Beyond politics, what is the short- and medium-term policy future if the GOP gains control of the Congress for the session that begins in January? The short answer is that Washington, DC is facing a complex, fiscal policy tri-lemma of spending, taxes and healthcare that almost makes one wonder whether the election’s winners could end up envying the losers.
Republican fears of a robust lame-duck session in November and December may be misplaced. The number of incumbents taken down in primaries means Senate Minority Leader Mitch McConnell will have a lot of leverage over moderates who might consider siding with Democrats on spending bills or major policy changes. In addition, the Delaware and Illinois contests for U.S. Senate seats are special elections. Like Scott Brown, the winners of these races will be sworn in almost immediately. If Republicans win one or both, McConnell will have 42 or 43 votes to block legislation rather than his current 41.
The big immediate challenge before Republicans is what to do about the Fiscal Year 2011 budget. All the regular annual appropriations bills funding the federal government are stalled. With the September 30 fiscal year deadline approaching, Congress must either pass a Continuing Resolution (CR), probably through November 2, extending all federal programs or let the federal government shutdown. Extending the pre-election CR into mid-January would be the first, and perhaps only, order of business for the lame-duck session.
After the new Congress convenes in January, a Republican majority would have to choose between engaging in a protracted budget fight with the president and passing a CR for the balance of the fiscal year. A full-year CR would normally be considered a victory for spending hawks because it would essentially enact an across-the-board freeze on non-entitlement spending, a big change from the rapidly escalating budgets of the Bush and Obama years. The problem with a full-year CR is that the elections are likely to shift power not just between parties but within them producing a large, influential bloc that will probably want cuts below current spending. This approach would risk being denounced as a betrayal by Republican activists inside and outside the Beltway and tend to depress energy in the conservative base leading up to 2012. Unless Boehner and McConnell are far more agile than Gingrich and Dole were under analogous circumstances, the GOP could find itself caught between a White House campaign to defend its domestic build-up and a conservative base that wants immediate (unpopular) federal spending cuts.
Extending the 2001 and 2003 tax cuts is the second leg of the fiscal tri-lemma. Most polling indicates the public wants the cuts extended – but mostly for the middle class. Republicans will seek an across-the-board extension of the tax cuts out fear that hiking rates on households and investors will further reduce incentives for economic expansion opening them to Democratic charges of heartless plutocracy. Since neither side will be able to force its will on the other, the most plausible outcome is a partisan tax scrum followed by an unsatisfying policy compromise.
On the healthcare reform, to paraphrase Speaker Pelosi, the legislation has passed and the public is finding out what’s in it. So far, the returns are mixed. A July, 2010, Washington Post poll of adults found a bare majority in support of the program including 73 percent of Democrats and 48 percent of Independents. Sixty-nine percent of Republicans were against the bill. By contrast, Scott Rasmussen’s polls of likely voters show that 63 percent favor full repeal of the health reform legislation. Some elements of the law, like the individual mandate and Medicare cuts, are radically unpopular while others, such as the ban on health insurance policies with pre-existing condition exclusions, enjoy high levels of support. My guess? If you think the healthcare law is unpopular wait until the White House and the media have dissected the Republican legislation to repeal it.
The outcome on all of these issues depends greatly on President Obama’s willingness and ability to maneuver. If he really is the ideologue his conservative critics contend he is he might decide to fight openly for his principles and programs. From a political standpoint, the GOP could scarcely hope for more as it plays directly into the Republican need to sustain political energy and would continue to alienate independent voters. The President and his party would probably be better served through a triangulation strategy that seeks to preserve the core of his agenda while drawing Republicans into compromises on spending, taxes and healthcare.
So far, this all reads like a replay of 1995 when President Clinton deftly out played the Republican Congress and set up for his 1996 re-election campaign. There are, however, two large variables present in 2010 that were absent in 1995. The first is the state of the economy. In 1994 a strong recovery was already underway that crested in time to sweep Clinton to re-election. It is unlikely that anything approaching the Clinton boom is going to happen before 2012. President Obama will probably face re-election swimming against the economic tide.
The other big “what-if” is the potential reaction of the financial markets to a protracted fiscal struggle between the White House and Congress. James Carville famously said that he wanted to be reincarnated as the bond market because then he could intimidate everybody. The question is whether a tax-spending-healthcare fight between President Obama and a Republican Congress might undermine confidence and destabilize the credit and stock markets forcing the White House and Congressional leadership to the negotiating table. Call it “Andrews Air Force Base II” or “Son of TARP” but a shot-gun compromise of this kind – or even discussions toward it – would have unpredictable consequences for the president’s re-election campaign, both parties, and, last but not least, the future of the country.
llbroo49 // Sep 2, 2010 at 10:48 am
Like most Americans, I want to see improvement in the economy and am more than willing to see Republicans take over the House and Senate if they could offer the solutions needed. However, I have not heard anything that gives me confidence that Republicnas have the slightest ideas to improve the economy.
mlindroo // Sep 2, 2010 at 11:15 am
Orrell wrote:
>[...] almost makes one wonder whether the election’s winners could end up envying the losers.
Indeed! I have said before and I’ll say again that the “ideal” result from a conservative point of view would be an impressive gain of 38 seats… That way the Republicans will be able to block anything they want, but Speaker Pelosi and her majority party will get all the blame.
On the other hand, a Tea Party fueled showdown between the GOP (Angle, Paul, DeMint etc.) and Obama probably helps the latter.
MARCU$
easton // Sep 2, 2010 at 11:24 am
As to the tax cuts, Democrats are in far stronger position than the article indicates. Most Democrats who lose will be blue dog Democrats, Democrats only need to hold off on this until after the election. The blue dogs who lost would have no reason to side with Republicans so they could then present a united front and because doing nothing results in across the board tax increases they can present Republicans with a take it or leave it option. (tax cuts only for the middle class) if Republicans leave it, they will get the blame. And with the new congress Obama can push for, push for, and push for tax cuts for the middle class.
As to 2012, Republicans have their own headwind they are sailing into. The projected crop looks terrible. Romney is a Mormon flip flopper who had his health care plan be the basis for Obama’s. Palin is toxic. Pawlenty has the charisma of a dead hedgehog. Jindal is too young but will take the VP post. Huckabee is interesting but he is hated by the Club for Greed types.
Lets not forget, McCain has charisma, but compared to Obama looked terrible. It looks like we will be having a repeat of the Clinton Presidency. 2016 looks to be the Republicans year, since Obama and Hillary will be out of the picture.
Fairy Hardcastle // Sep 2, 2010 at 11:25 am
llbroo49, other than adjusting its own role as a buyer of goods and services in the market and adjusting taxes, what exactly can any government do to “improve the economy?”
sinz54 // Sep 2, 2010 at 12:41 pm
mlindroo:
Having dominant political power is always better than not having it.
Because the majority party controls the committee assignments, the perks, as well as what legislation gets out of committee to the floor of the House (or Senate).
And if nothing else, that’s a lot of fun.
If the GOP takes over the House, Nancy Pelosi will have to bring her own toilet paper from home from now on.
Rabiner // Sep 2, 2010 at 3:51 pm
Considering I know Republicans will get no legislation passed if they gain power the only things I’m worried about are the following:
1. Darrel Issa’s crusade to hold hearing after hearing on the smallest of things in order to make the administration appear bad.
2. Congress wasting time on investigations instead of moving this country forward on many serious issues.
that’s really it. Republicans will just waste 2 years until Obama is reelected in 2012 at this rate. We’ll get a repeat of 1998-2000 except we’ll be in a Recession at the same time.
Oldskool // Sep 2, 2010 at 4:25 pm
Along with a bad economy, another difference from ‘94 is the grade of GOP leadership. Back then, Clinton turned Gingrich into a buddy. That won’t happen now. It’ll look more like the late 90’s, The Impeachment Years.
armstp // Sep 2, 2010 at 4:59 pm
I think it is very very far from certain that the Republicans are going to win the house and the senate back.
The generic poll, although it points more favorably to Republicans, is not necessarily a good predictor of the house. Congressional seats are chosen on a very local level. There is also still 2 months, which in this political season means there is time for things to change from here.
Although possible to take the senate, Nevada, Alaska and now possibly Delaware may make it impossible to take the senate back. Even without these states, it was far from certain the numbers added up to a Republican senate win.
The Democrats still have some strengths to play (money) and the nation is not particularly enamored with the Republican party. I suspect voter enthusiasm will be up for both parties and not just for the Republicans.
llbroo49 // Sep 2, 2010 at 10:51 pm
Fairy Hardcastle // Sep 2, 2010 at 11:25 am
I agree with your position. Therefore, I see no pressing need to elect a new group of politicians just for the sake of doing so.
Plus Size Homecoming Dresses - What are some cute plus size dresses for homecoming? // Sep 3, 2010 at 1:28 am
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FosterBoondoggle // Sep 3, 2010 at 11:24 am
“…the GOP could find itself caught between a White House campaign to defend its domestic build-up and a conservative base that wants immediate (unpopular) federal spending cuts.”
Um… What’s the actual evidence that the base wants spending cuts. This crowd has been polled on what they want cut. Social Security? Nix. Medicare? Keep your government hands off it. The military? Gotta increase that one. The only thing they want to cut is foreign aid – sum total, about 1/2% of the federal budget, a large fraction of which is aid for Israel, which of course also can’t be cut.
The last time the GOP had full control of the government they passed Medicare Part D, unfunded, and with the fed strictly prohibited from negotiating reduced prices with Big Pharma. Why anyone would think there’s any evidence that the GOP (or its base) actually wants to reduce the deficits is completely beyond me. The screamers in the Tea Party just echo any old sound bite they get fed by Beck, Limbaugh, etc. that makes the Democrats sound bad. The content doesn’t actually matter once their candidates get elected.
CAPryde // Sep 3, 2010 at 1:39 pm
Amen, Foster. I continue to find it simultaneously amusing and amazing that anyone believes that a Republican-controlled Congress would make moves to reduce the deficit or control spending. There is just no evidence that the GOP is actually about fiscal responsibility and a wealth of evidence to argue the opposite–that they are the party of big spending and exploding deficits.