Thursday, March 31, 2011

Shutdown Odds and Bluffing

My post yesterday over at Plum Line emphasized the extent to which the fact that everyone in the budget negotiations has an incentive to bluff, and otherwise conceal their true position, makes a shutdown more likely.

I should add, though, as sort of a viewer's guide for those who are watching the negotiations, that it also makes it mostly pointless to pay a lot of attention to the minute-by-minute accounts of how the bargaining is going.

Pointless, that is, if one has only a purely passive interest in what's going to happen. For those who are outside of the negotiations but have interests at stake in the results, it's well worth paying attention to information that leaks out -- because those "leaks" may well be deliberate trial balloons, sent up to gauge the reaction of allies to the possibility of giving ground on specific points. That might be what happened with rumors today (now, for what it's worth, shot down) that Democrats were willing to agree to policy riders restricting the EPA. Or maybe not! Maybe it was just misinformation of some sort or another. That happens too.

I continue to think that the odds of a shutdown are very high. Basically, for two reasons: one is because it seems fairly likely that quite a few Republicans in the House want at least a brief shutdown in order to show Tea Partiers they're tough, but more importantly because the policy riders, and to some extent the location of spending cuts, are very difficult to compromise. And I believe those who say they won't allow another short-term CR that (on the one hand) continues spending cuts at a higher rate than Democrats want and on the other is "clean" with respect to those riders. Mostly, however, the point now is that we really won't know more until something definitive happens, one way or another. My advice is not to be taken in by reported "momentum shifts" and the like in negotiations.


  1. The Democrats aren't executing their PR on this as well as they can. They should make clear 3 things. 1) They don't want any budget cuts. It will disrupt the recovery. This was the GOP's argument for extension of Bush tax rates. Polls show the GOP has deceived the public into thinking spending cuts are good for the economy. (2) They're willing to compromise because a shutdown would be even worse (3) The deficit is largely driven by the Great Recession (invited by inadequate financial regulation), the urgent need to stave off it turning into a true catastrophe, Bush tax cuts, wars, spiraling health costs. Their position is that after the recovery has more momentum, all these issues should be bargained on together.

  2. Jonathan (and in partial rebuttal to Anonymous above):

    Oh. I think I get it now.

    If the Dems' expectation roughly matches yours, then all this kvetching from our side of the aisle about the Dems preemptively surrendering is beside the point.

    If NO MATTER WHAT THE DEMS OFFER it will be in the Repubs interest to force a shut-down, or if the Repubs have situated themselves such that they must have a shutdown to establish unity, then it doesn't matter what the Dems offer.

    Once a shutdown actually happens, though, the politics and public-perception dynamics will change. Soon, the public will be demanding compromise and the Dems will be in a better position to exploit that dynamic.

    After all, who up 'til then would have the image of wimpy compromisers and who the image of unbending ideologues?


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