Traps and Snares

Unease is growing in the nation with the mounting national debt. Tension is Washington is rising as Republicans and Democrats try to find agreement on what to do about it. Democrats persist in arguing for the need to increase revenue, something they should have thought of before they went on a spending spree. Republicans insist on cutting spending. The zealous in both camps are reluctant to compromise even though, by most accounts, without a compromise nothing will be done. Meanwhile, the debt clock is ticking. If the debt limit is not raised by August the United States could go into default.

So badly have the talks gone so far that Republicans have walked out on negotiations. Their prospects are looking increasingly poor. They have refused to consider any tax increases. They are making a stand on cutting spending. The Democrats have expressed willingness to cut spending but only over the long term and in conjunction with increased revenue, i.e., higher taxes. Score one for the Democrats. Their willingness to "compromise" portrays them as pragmatic and flexible while the Republicans' principled opposition casts them as rigid and doctrinaire, even in the face of catastrophe. If the Republicans persist in their objections it is likely they will be seen as the ones responsible for any financial collapse. After all, if a deal is not reached it would be because the Republicans refused to budge. Should budget talks break down it is quite possible that the Republicans will be left holding the bag. That is the trap.

The Republicans came to victory in the last election largely due to their opposition to higher taxes and government spending. To give in to any tax increase or go soft on government spending would be to give up their single greatest weapon and undermine virtually everything they ran on. If they accede to a budget compromise that raises taxes or fails to reduce spending in any significant way what will they be able to run on in 2012? If government spending is firmly taken into hand republicans will be able to acquiesce to some tax increases. They might even burnish themselves and gain a touch of political responsibility for doing so. But in the absence of any significant cuts in spending the only result of a tax increase will be to allow the government to continue in its profligacy. In that event Republicans will have accomplished nothing. They will have abandoned their principals simply in order to buy some time. That is the snare Republicans face.

Democrats have few good options themselves. To unilaterally proceed to raise taxes would be to take the ire of voters upon themselves. To give in on spending would jeopardize their standing with the many millions of Americans who count upon government spending, not just to keep themselves above water, but for their livelihoods as well. There is also the more subtle threat reduced spending poses to progressives. To reduce federal spending is to hinder federal power. Without the velvet glove of money, only the iron gauntlet of law remains.

When it comes to raising taxes, republicans and democrats are in very different positions. Democrats can raise taxes without jeopardizing their political base. Republicans cannot. Because of this, democrats have more room to maneuver on the issue. Democrats can support increased taxes and keep their base content, as long as those taxes fall on the usual suspects. Republicans do not have that luxury. Most republicans oppose higher taxes of any kind. Unless a deal can be reached where only democrats will pay higher taxes, republicans will need something big to abandon their anti tax position. Simply keeping the government running will not be enough. If Congress cannot step up and do something to avert a train wreck perhaps Republicans should consider just getting out of the way.

The real test of the political resolve to address the debt will come in the fall of 2012. That is when we will learn how determined politicians are to tell the public the truth about spending and find out how willing the public is to accept what it will take to get the national debt under control.

Many years ago I learned the lesson that the first thing you should do if you find yourself in a hole is stop digging. Just digging more slowly won't help. That is a lesson that Congress and the president need to learn.