Wednesday, July 13, 2011

Would a Deal Help Obama?

John Sides has an excellent post up discussing the effects of a budget deal on Barack Obama's chances in 2012. I basically agree with him (no surprise there), but with a couple of caveats.

The first is about how John frames the question. John sets up his post as a series of possible outcomes, and fair enough. But it's important to keep in mind what happens if Obama does nothing. The outcomes John lists -- default, a deal that's bad for the economy, a deal that has no effect on the economy -- may be the options available to the president, but not be his own choice; they are, to the contrary, the choices presented to him, basically, by the outcome of the 2010 elections.* So when we talk about Obama's choices, it's in the context that presumably one of those things (default, some sort of deal) is going to happen. That's not to disagree with John's point (which is, as you should read when you click through, that some of what's said about a potential deal and 2012 isn't really right); just to stress that if we're looking at it from the president's point of view, there aren't really a lot of great choices. Barring, that is, a complete GOP surrender (i.e. the McConnell gambit), or invoking the 14th amendment, which does have some dangers to the White House, too.

The second caveat is about John's comments on a government default:
Assume there is no deal and then assume, as Geithner and others have warned, that there are serious consequences for the economy when the debt ceiling isn’t raised. This will hurt Obama. And it will hurt him more than it will hurt the Republican Party. Presidents suffer the consequences of a bad economy. Divided government does not change this. Beware pundits who see silver linings for Obama in this scenario.
To which I'd say: probably. Most likely. And do read John's previous excellent post about divided government.

But...I think I'd want to qualify this one a bit. Yes, voters generally hold the president responsible for the economy, regardless of whether his policies are actually being implemented. But I can't think of any precedent for what we're talking about here: a severe economic hit linked very specifically to one government high-visibility action, and one that (potentially) would be considered an action of the opposition party in Congress. Of course, there's no guarantee that a default would in fact be blamed on Congress and not Obama. And I'm certainly not saying with any confidence that even if most voters did associate an economic consequence with default and default with Congress, that even then they would ultimately reward Obama and punish Republicans. All I'm saying is that I'm not convinced that the evidence we have to date is sufficient to be certain.

Now, if I was advising Obama, and thinking purely about the 2012 elections, I'd go with what John wrote -- I'd certainly advise him to avoid default or anything else that might hurt the economy. Better to stick with extrapolating from what we know than speculating that this case might be different. But, you know, it's possible that it could be.

Although personally, as much as I like it when life provides good data for political scientists to learn from, I think I'd prefer avoiding this one.

*Yes, it's probably true that Obama could have insisted on a debt ceiling increase as part of the post-election tax deal, or for that matter could have asked Congress for an increase that would have taken him through the next ten years back when Democrats had 60 Senators. But even without the debt limit, the Republican House would have threatened a government shutdown in the fall, which would also threaten the economy.

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