The debt ceiling deal: What should we have expected?

by James Fearon on August 2, 2011 · 20 comments

in Legislative Politics,Political science,Presidency

This is basically a small plea for insight from the Monkey Cagers and commenters who know more about US politics than I do (it’s not my field of study by a long shot).

I’m seeing tons of assessments of “who won” the debt-ceiling bargaining, with basically every single one saying the Republicans did much better.  The analyses stress that the Republicans got no tax increases (or even loophole closures) and lots of cuts, thus not anything like the more balanced deal the President had argued was fair and best for the country.  Even commenters who think the Dem’s didn’t do as badly as the consensus view seem to believe that the administration would be just terrible at buying rugs in Morocco.

But I’m wondering, What should we expect in terms of bargaining power here? 

Isn’t it the case that when it comes to making laws, the Constitution gives “Congress” the power to make take-it-or-leave-it offers to the president?  (That is, the president’s only formal power over legislation is the veto.)   That’s all the structural bargaining power.  “Congress” should be able to extract all the surplus if it wants to, which is to say it should be able to make an offer that makes the president just prefer not to veto it.  In this case, since a veto could have had terrible economic consequences and probably saddled Obama with a lot of the public blame for them, “Congress” could get practically anything it wanted.

Ok, it’s not “Congress,” instead it’s two chambers.  So the law that gets through has to get the median dude in the House, and 60th most liberal senator.  The 60th most liberal Senator is not all that liberal, no?  Is the argument that even that guy preferred some increase in tax revenues, but lousy bargaining skill meant that the Dem’s didn’t get that?

Or is the idea that Boehner was able to use an implicit threat that he would be deposed by his caucus if the deal had tax increases (or other stuff hated by his radicals) to credibly commit to only pass a bill somewhere off to the right of the House median?   If so (or under some other party cartel sort of story), the argument would be that the administration could have extracted more from Boehner because they were misjudging what his red lines were?

I know another common argument out there is that Obama didn’t have to choose between veto and sign—he could have invoked the 14th amendment or made some other emergency claim, or have just threatened  to invoke it.  Again, I’m no American Politics expert, but I’m wondering if that’s actually realistic.  In addition to setting a terrible precedent, everyone could see that that could be a very messy course for Obama, so it’s not clear that it would have been a particularly credible threat.

Further, suppose he had made such threats anyway, in attempt to gain bargaining leverage.  Mightn’t this have made some on the other side even more intransigent, since if Obama dropped the bomb it could relieve them of responsibility for raising the debt ceiling?  (I’m guessing that’s one reason why the administration was so insistent about rejecting the 14th amendment route; they wanted to keep the pressure on Congress.)  If so, then not so clear he could have gotten much bargaining leverage out of that move.

So I don’t know, maybe Obama is bad at legislative poker, but I’d like to know more about how the argument works.   Seems to me that he has very little bargaining power to begin with in a legislative situation like this one. And this is not so much because the economy is terrible and his favorability ratings are low, but because the U.S. Constitution has it that Congress organizes its own procedures and makes the laws, basically.




















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