Can we do tax reform and immigration reform in an election year with a divided government and a lame duck president?

Why Yes! Yes We Can! 

There is only one catch...

We could do it in 1986, and maybe in 1998, but not in 2014. That's the thesis of  John Harwood's article in the New York Times: "When a 2nd-Term President and a Divided Congress Made Magic".

First Harwood explains why it worked in 1986:

"In 1986, President Ronald Reagan sat in the White House. Fellow Republicans controlled the Senate but not the House — a mirror image of the alignment President Obama governs with today. That September, strong bipartisan majorities in both houses of Congress passed a drastic revision of the tax code that eliminated valuable tax breaks while lowering the top rate to 28 percent from 50 percent. The following month, less than three weeks before Election Day, bipartisan majorities transformed the federal immigration code as well, with amnesty for some already in the United States, penalties for businesses hiring illegal immigrants, and more money for border enforcement...  All of them accepted two stipulations that, by narrowing the range of disputes, made getting to yes easier. They agreed that the new tax code would raise the same amount of money as the old one (making it “revenue neutral”), and that it would get that money from the same groups of earners (making it “distributionally neutral” as well)."

Then Harwood explains why it won't work in 2014:

"Mr. Obama and his party want more tax revenue and more progress against income inequality, which has widened since Mr. Reagan’s time. Republicans have more difficulty selling reductions from a top rate of 39.6 percent than from 50 percent as in 1986...  What controlled the action was what the congressional scholar Norman Ornstein called “the problem-solving caucus” — driven more by issues than partisan imperatives. Today, Mr. Ornstein said, that caucus “has dwindled dramatically.” That’s in part because the number of truly competitive districts — where voters selected a member of Congress from one party and a presidential candidate from another — has dwindled from 45 percent of all House seats in 1986 to only 6 percent, or 26 seats, today.  The crucial ingredients for bipartisan action, former Senator Bradley said, are “independence of thought and capacity to listen.”

A good article, but I think Harwood missed a couple of points. President Reagan prioritized doing a deal ahead of ideological or partisan concerns. Don't get me wrong. Reagan was a partisan and an ideologue. But he made doing deals a priority and was willing to suffer the slings and arrows from his own party to get a deal done. As Harwood points out in the article "Republicans like Phil Gramm of Texas... called granting permanent residency to some immigrants who had crossed the border illegally “outrageous.” Nevertheless, Reagan got the immigration bill passed.

Carnival of Divided Government LVI Excessum et Renatum Special Last Carnival & 2014 New Year Edition

Welcome to the Carnival of Divided Government Excessum et Renatum - Special 56th and Final 2014 New Year Edition.

As noted before, the whole "Blog Carnival" concept is well past its "Sell By" date, eclipsed by Facebook, Twitter, and other social network aggregation schemes. Blog Carnivals were popular when the Dividist started this blog in 2006. The idea was to solicit and compile posts and articles contributed to the carnival on a particular subject then periodically share the content and links on the blog. Social media fulfills that function now.

We've not received much relevant content contributed to the carnival for a few years. This feature morphed into a simple compilation of topical posts and articles that caught the Dividist's attention as he wandered about the 'sphere. The format was as comfortable as a old shoe, so we just kept it going.

As we return from an extended sabbatical, kick off an election year, and attempt to insinuate this blog into social media platforms, the time has come to put this obsolete format to bed. This last effort will help the Dividist "prime the pump" after the long layoff, but the Oblogocare Death Panel has spoken. Without further ado, here the Carnival of Divided Government swan song....

When Bipartisanship Happens to Good Partisans A meditation on debt ceilings and deficit reduction.

In the dark days before the debt ceiling compromise vote, with the doomsday "debtapocalyspe" countdown dominating the media, several polls struck a common theme: The public demands bipartisan compromise! Taegon Goddard's Wire summarized the gestalt of the moment:

"A new Pew Research poll finds 68% of Americans say that lawmakers should compromise on the debt ceiling debate, even it means striking a deal they disagree with. Just 23% say lawmakers who share their views should stand by their principles, even if that leads to default."

So it follows that when our representatives and leaders in Washington D.C finally got together and crafted a truly bipartisan deal, the country cheered wildly. Or not:

"A majority of Americans disapprove of the deal struck Sunday by President Barack Obama and congressional leaders that will raise the country's legal borrowing limit, and three out of four believe elected officials have acted like "spoiled children."

Since that legislation was signed, nothing but cries, lamentations and the rending of garments has been heard across the land. The animus from the right, left and center for the debt ceiling compromise is quite extraordinary. Q&O had a good survey of the early reaction and little in the popular assessment has changed in the weeks since.

Congressional and presidential approval levels plunged to new lows. When describing the debt ceiling deal and the process and the process to get there, the pejorative of choice is : Our government is... OMG ! DYSFUNCTIONAL! And it must be true. I mean ~750,000 Google search hits on "debt ceiling dysfunctional" can't be wrong. Who am I to argue with that? But maybe, just maybe - dare I say it? Our government is working exactly as it was designed to work, and our representatives are doing exactly what we, the voters, sent them to Washington to do.

For all of the lip service paid to the virtues of bipartisan compromise from pundits and bloggers across the political spectrum, there appears to be very little support for a picture perfect example of a bipartisan centrist compromise when Congress does enact one.

Consider the actual vote for the debt ceiling legislation:

Senate Vote: 74 For 26 Against
Republicans: 28 For 19 Against
Democrats: 46 For 7 Against
House Vote: 269 For 161 Against
Republicans: 174 For 66 Against
Democrats: 95 For 95 Against

There is simply no way to characterize this vote except as an overwhelming bipartisan compromise victory. Moreover, to the extent that “Centrist” actually means anything in concrete policy terms, this was a purely Centrist piece of legislation. The extremes of both parties voted against it. It required a bipartisan coalition of more moderate, centrist, practical Democrats and Republicans to pass this legislation. Liberal votes were not needed. Tea Party votes were not needed. It passed overwhelmingly. It is exactly this model that future deficit reduction legislation will follow.

SPOILER ALERT! How the debt ceiling "crisis" ends.

Well played gentlemen!

Kabuki Theater - a traditional form of Japanese drama characterized by highly stylized postures and exaggerated gestures accompanied by familiar songs and plots rooted in historical tragedy (or comedy). The audience knows the story and knows how it ends. The art is in the quality of the performance and not in the plot. In the United States, this art form is more easily recognizable as "The Debt Ceiling Crisis." A few weeks ago the Dividist commented on the Outside The Beltway blog, describing the show we were about to witness:

"The only thing that provides political cover for a compromise for both sides is the dire consequences of missing the deadline. So there will be a compromise. The compromise will include some formula for revenue increases, (probably in the form eliminating deductions while reducing rates), it will include cuts to the military, and it will include deep meaningful and substantial cuts in spending in the overall budget. And the compromise will be agreed on the brink of default to no one's satisfaction. In the meantime, we have six weeks of Kabuki theater to enjoy while the eventual compromise is hammered out. Both tribes will have ample opportunity to point at the feckless hypocrisy of the other. Enjoy the show."

While the Dividist is not ready to take a victory lap, he does not see any reason to change that prediction. The debt ceiling will be raised, because all leadership on both sides of the aisle say it will be raised. There is no politician of consequence in Washington who is saying otherwise. We know how this story ends. It is all about the performance that takes us there.

This is not to say that the performance is unimportant. Quite the contrary. The performance will determine public opinion and the final shape of the compromise. Whether looking at the more recent temporary measures proposed by Reid, McConnell and Boehner, or the "Grand Bargain" that was being negotiated between Obama and Boehner - the fact is that the two sides are very close, as Ezra Klein explains:

"Now, remember that the deal Obama offered Boehner about a week ago now, or maybe a little bit less than that was $1.2 trillion in tax increases for $4 trillion in deficit reduction total. Boehner walked from that. but Boehner did say he would be okay with an $800 billion tax increase if there were $4 trillion in debt reduction total. So in some strange way, the two aren't as far apart as you would think, but they can't bridge that final gap. so now Boehner's arguing for no tax increases at all, but Obama is sort of held to that same deal and is trying to continue to offer it to Boehner."

The "Grand Bargain" is still on the table. That became clear in the dueling press conference "arias" sung by the two principal actors Monday evening. Despite Harry Reid proposing a plan with no revenue increases earlier in the day, Obama ignored Reid's plan in his speech and continued to make the case for his version of the "Grand Bargain" - including revenue increases. Despite Boehner himself proposing a stop-gap measure earlier in the day - he spent most of his press conference arguing the case for his version of how the "Grand Bargain" negotiation broke down. Conclusion - they are still negotiating the big deal in earnest.

Boehner is playing his supporting role exceedingly well in the shadow of Obama's scene stealing dramatics. Still - the President has an edge, successfully portraying himself to the press and most of the public as the more reasonable party in the negotiation. Last week he attempted to press this advantage to push for full $1.2 trillion in revenue increases. That was when negotiations broke down. He pressed it again on Monday with a call for public support to apply pressure in the House. Boehner played his last best move, exiting stage right, proposing a stopgap, knowing that Obama really wants the "Grand Bargain". But Obama knows that Boehner wants it too. The plot thickens.

The simple fact is that the $400 billion difference is not all that significant in the context of the complete $4 trillion deficit reduction plan. These last few moves are about how that last $400 billion will be split. So far - advantage Obama - but it's not a big advantage. The Dividist predicts Boehner will move off of his $800 billion "revenue enhancement" cap, but it will stay under $1 trillion.

The problem - both now and throughout the process - is that this "blink contest" negotiation cannot be settled except on the brink of a looming disaster deadline. Neither side can satisfy their constituency with the inevitable compromise. Our representatives on both sides take considerable political risk if they compromise too early - i.e. before a doomsday deadline. We've seen this every time the sides get close. Liberals and Democrats are furious at Obama and Reid. Conservatives and Republicans are furious with Boehner and McConnell.

The compromise solution requires a hard deadline. The key variable determining when an agreement is reached will be when we - The People - agree whether the deadline is real and exactly when it takes place. This is part of what we heard last Friday, with both sides upping the rhetoric to make the case that the deadline was really on Monday. Nobody bought it. So we are back to the August 2 deadline, except that may not be a real deadline either. Boehner's stopgap plan moves the deadline ahead another six months. Nobody really wants that either. The Dividist continues to believe the most likely scenario is that we will get a real compromise by Monday.

A suggestion: Instead of assuming that one side or the other are intransigent hypocrites, consider the possibility that both sides are arguing from principle (i.e. sincerely believing they are fighting for a position that their constituency holds dear). If you accept this framing, then it follows that both sides must maintain the posture that they are willing to walk right up to the brink of a debt ceiling default rather than compromise their principles. To do otherwise would undermine their negotiating position and be a betrayal of the people who elected them.

Monday night the President said - "The American people may have voted for divided government, but they didn’t vote for a dysfunctional government." A good line, but it misses the mark. We have a divided government because we have a divided country.

There is a significant faction of the electorate who would like to see our country more closely emulate a European style social welfare democracy. There is an equally significant faction of the electorate who would like to see our country move back to the more limited government concepts on which it was founded. To a large extent the Democratic and Republican politicians we elected to represent us are doing exactly what we expect of them - representing our views - just the way we want them to. Our government is not dysfunctional, it is behaving as designed to resolve conflicts between large and opposed factions in the populace.

Oddly, The Dividist is filled with optimism and almost euphoric watching this peformance. It reinforces his belief that he does not need to put any faith in the motivations of the politicians of either party. It is enough to know that we have a system that was designed to anticipate this kind of political conflict - in fact - to insist on it and institutionalize it. As James Madison said in Federalist #51 when arguing for our constitutional division of power: "Ambition must be made to counteract ambition." Out of the conflict inherent in a government run by men and not angels we get better results than we would in the absence of the checks they put on each other. Madison again in Federalist #10:

"The influence of factious leaders may kindle a flame within their particular States, but will be unable to spread a general conflagration through the other States. A religious sect may degenerate into a political faction in a part of the Confederacy; but the variety of sects dispersed over the entire face of it must secure the national councils against any danger from that source. A rage for paper money, for an abolition of debts, for an equal division of property, or for any other improper or wicked project, will be less apt to pervade the whole body of the Union than a particular member of it; in the same proportion as such a malady is more likely to taint a particular county or district, than an entire State. In the extent and proper structure of the Union, therefore, we behold a republican remedy for the diseases most incident to republican government."

The time to worry is when the factions are not fighting each other to a standstill. That usually means the system is not working as it should and power is too concentrated. Or it means we are going to war.

The Dividist's primary rationale for supporting divided government is that it leads to more fiscal responsibility and spending restraint in our federal government. The Dividist is interested in the result, not the histrionics that are necessary to get there - no matter how entertaining. The kind of giant cuts envisioned in the "Grand Bargain" can only happen when we are teetering on the brink and can only happen with a divided government. Pay attention to the result - not the performance. Divided government may be winning and winning big.

Bravo, gentlemen. Play on.

Divided and Balanced.™
Now that is fair.