Wednesday, June 29, 2011

Dog day afternoon on Capitol Hill

Yesterday, Vermont Senator Bernie Sanders -- one of the most left-wing members of the entire US government, and a bona fide socialist -- offered a dramatic new solution to debt ceiling gridlock: a 50-50 compromise on deficit reduction. Half the revenue for debt reduction would come from tax hikes, and the other half would come from spending cuts. It's hard to imagine a proposal that more thoroughly embodies the spirit of bipartisanship and mutual sacrifice towards a common goal.

He was, of course, promptly laughed out of the room.

Steve Benen says it best:
We have a Democratic Senate and a Republican House, but the notion of an equitable, 50-50 split is thought of as fanciful nonsense backed only by liberal extremists. When Republicans demand a 100-0 split in their favor, meanwhile, and failure to do so will mean they cause a recession on purpose, this is somehow just routine and predictable.

I suspect if a senator suggested a 100-0 split in the other direction — no job-killing spending cuts, only tax increases — GOP officials would simply faint, en masse, at the very idea.

It's actually worse than Benen says: out of the two elected branches, the Democratic party controls 1.5. If we go by that, the eventual split should be, if anything, closer to 70-30 in favor of the Democrats. But right now, any negotiated outcome to the debt ceiling standoff seems likely to favor Republicans by something more like 90-10.

In his post above, Ezra Klein attributes the unevenness of the negotiations to a debate that has "shifted far to the right." And that might part of the reason. But it's only part.

The main reason the debt ceiling debate favors the Republicans so heavily is because it's not a traditional debate or negotiation at all, where both sides want something different, and they each compromise in order to get as much of what they want as possible. Instead, it's very much a hostage situation. The Republicans want something (spending cuts), and in order to get it they've taken a hostage (America's economic stability). The Democrats want nothing in particular, other than to prevent Republicans from blowing up the economy.

Here's the thing about hostage situations: they're all-or-nothing affairs. They're binary. So long as the hostage-taker controls the hostage, he has all the leverage. Because nobody is going to negotiate for the life of half a hostage, the hostage-taker can continually make demands and the more reasonable people in the room are forced to consider them. On the other hand, as soon as the hostage-taker loses his captives, the negotiation's over. There's no reason left to talk to a hostage-taker without any hostages.

So really, there are only two outcomes to any hostage situation.
  1. The guy with the gun gets what he wants: the plane to Fiji, the million dollars in unmarked, nonsequential bank notes, the full pardon and release of nine members of the Asian Dawn movement in Sri Lanka.
  2. The SWAT team comes through the front door and it's game over, man. Hopefully, no one shoots the hostages before this happens.
You know how it never ends? The negotiator and hostage-taker agree to a 50-50 split. The hostages go free, but so does the guy who took them.

So really, it's little surprise that so far, negotiations have favored the Republicans. If it were any other way, the Democrats would be playing them for suckers. After all, what would the Democrats even say? "If you don't give us tax hikes, we won't raise the debt ceiling -- just like you're threatening to do yourselves." It's just not credible. In these things, concessions can only go one direction.

But it's a dangerous game for the GOP to play. Because if they lose, they're left with nothing. And if it goes right down to the wire, and it turns out they're not willing to pull the trigger, they're left with nothing. And if Democrats find some way to take the hostage away from them, they're left with nothing. Look, I've seen the movies -- these things never end well for the bad guys. Let's just hope it ends alright for the hostage.


  1. I really think you took the wrong message from Dog Day Afternoon and the Dems could actually learn a lot from the way the film played out.

    In DDA there were two hostage takers, Sonny (Al Pacino) and Sal (John Cazale). Pretty early on in the film it is clear that Sonny is the ringleader who is intelligent and has specific goals in mind. He wants the money for his lover's sex reassignment surgery. Sal on the other hand is an unhinged lunatic. Sal makes two remarks that confirm this. First, he mentions that he's willing to start killing hostages. Second, he says he's "not going back to prison".

    Right before the bus arrives the detective in charge of the scene makes a remark to Sonny that seems to tip him off to the fact that the hostage situation will end with a bullet in Sal's head and Sonny in cuffs. I havent seen the movie in a while but I recall Sonny implicitly agreeing to this outcome with the understand that his lover doesnt get blamed for the robbery.

    The cops were real smart in understanding that Sal needed to get a bullet in the head because he was really willing to start killing hostages. Sonny, on the other hand, was not willing to actually execute a hostage and so didnt really have any bargaining power and could be arrested.

    Without going to crazy with this I think Sonny is Boenher, Sal is Cantor and the Detective is Obama. Obama needs to figure out who is really willing to blow up the US economy (Cantor and co.) and who isnt (Boenher and co.). He needs to find a way to exploit this difference like the cops did in DDA. Im not sure how to do this, but I think hostage situations (and DDA) are a little more complicated then u seemed to indicate.


  2. The Huffington Post's legal analysis leaves a bit to be desired. It's an interesting question who would have standing to stop the President if he borrowed funds not authorized by law, but the fourteenth amendment clearly swings the *other* way. The debts that *are* authorized by law, and only those debts, need to be paid before anything else authorized by law, leading to the real danger in the confrontation -- not that the country defaults on the debt, but that social security checks stop getting mailed out.

  3. The argument, as far as I understand, goes something more like this: "The debt ceiling can be ignored as an unconstitutional legislative device, because, regardless of how we actually prioritize debt repayment, its mechanism allows Congress to force the country into default, contrary to the 14th Amendment." Ordinarily, I'd say the logic seems a bit, uh, attenuated -- but there's one persuasive bit of evidence in its favor, which is that we're currently at risk of this exact scenario playing out.

    Anyway, I'm probably going to blog on this in the near future, but the tactical benefits of the constitutional approach may exceed its legal virtues. If Obama just keeps on borrowing, that puts the onus on the GOP to argue that the United States can be (and depending on the timeframe, may already be) in effective default. Who wants to stand in a court and make that case?