Lessons Learned from The Budget Showdown

Right From the Start

In the aftermath of the recent congressional showdown over the budget resulting in a partial government shutdown, it appears that everybody but the Republicans knew that, in the end, the Republicans would cave and give President Barack Obama everything he demanded.  Mr. Obama knew it.  Senate Majority Leader Harry Reid (D-NV) knew it.  House Minority Leader Nancy Pelosi (D-CA) knew it.  Virtually every member of the press corps knew it even though they insisted on listing the parade of horribles that would befall the nation anyway.  Political pundits on the right and left knew it.  Even dumbass retired lawyers like me knew it.

They all knew it because it is always that way and not just on the national scene.  The Oregon Republicans have been caving in to Democrat administrations for decades.  And there is a good reason.  The Republicans apparently do not know the first thing about negotiations.   Let me give you a few “for instances.”

First, know your opponent.  The Republicans always view themselves as the “adults in the room.”  Rightly or wrongly they believe that the public views them in that fashion also.  As a result they are expected to “do the right thing” – to act responsibly.  In contrast the Democrats are expected to be volatile, emotional and given to brash and outlandish acts – always to be forgiven because “their hearts are in the right place” – the children in the room.

My son-in-law has a great view of adults dealing with children.  He notes that when “reasonable” meets “crazy” there is always a chance that “reasonable” will prevail.  However, when “crazy” meets “crazy” the outcome is guaranteed to be disastrous.  (For those of you forced to endure a teachers union dominated Portland public school education that means when Republicans act as irresponsibly as the Democrats the outcome will always be disastrous.)

Second, know your supporters.  Republican support is drawn primarily from small and medium size businesses – the people who are working hard to succeed and still see a path to upward mobility in an increasingly complex and burdensome government environment.  They are the people who look to the future and make sacrifices today for the opportunity tomorrow.  They did not see the federal sequester as particularly disturbing and did not believe the Democrats and their public relations machine in the mainstream media about the impending doom from reduced government spending – they were right.  Similarly they were not particularly concerned with the partial government shutdown and viewed any inconvenience as a minor, and politically inspired, annoyance.  Again they were right.  However, the prospect of a default on the nation’s debt – real or perceived – and the ripple effect in the financial community set small and medium size business on edge.  Having just survived the effects of restrictive financing availability due to the 2008 Bush-Obama economic downturn, they were not anxious to tempt fate a second time.  The Republicans had very little support in their core constituency as they approached the deadline for dealing with the impending federal debt ceiling.  (Understand that these same people believe that the solution lies in reduced spending instead of increased debt; however, they also understood the immediate effects of “default” and were rightly reluctant to accept the short term hit when a long-term solution was necessary.)

Third, understand the supporters of your opponent.  The Democrat party draws it support in large part from those who are dependent on the government, in whole or in part, for their livelihood.  The Democrats are financed by an odd coalition of unions (primarily public employee unions) and the super wealthy (Hollywood and Wall Street) who pay handsomely primarily to be left alone by the government.  In a government shut down, the people to suffer first are the public employee unions.  Why then was the first act of the Republican dominated House to pass a resolution ensuring that the 800,000 “non-essential” furloughed federal employees will be paid in full?  (Understand that they were furloughed, not terminated, so their gold-plated pension and healthcare plans continued unabated.)  In essence, they were immunized from the acts brought on by the Democrats refusal to negotiate.  (In some states, including Oregon, the furloughed federal employees were further rewarded by collecting unemployment thus making their “hardship” a three week paid vacation with bonus.  More importantly, the taxpayers will now have to foot the bill for overtime so that the work left undone – and unnecessary in many instances – can be “caught up” at time and one-half pay.)

And finally, understand your “achievable goals”.  In this instance the achievable goal was (is) a reduction in the growth of federal spending.  That goal finds broad public support.  The achievable goal is not the actual dollar amount of the federal debt.  So long as the federal debt does not grow as a percentage of the Gross Domestic Product (GDP) economic recovery will continue and accelerate.  At a point in time, reduced federal spending coupled with economic growth will first eliminate the federal deficit and then reduce the federal debt.  (That occurred during President Bill Clinton’s terms at the insistence of the Republican House led by Speaker Newt Gingrich (R-GA.)  Had the Republicans focused on this goal, without distraction, they would have been successful – even through an extended partial government shutdown.

But the Republicans were distracted.  They allowed themselves the foolish luxury of thinking they could destroy Mr. Obama’s signature and singular legislative achievement – Obamacare.  How they could delude themselves into thinking this when they do not control the Senate, the presidency and lack the two-thirds vote needed to override a presidential veto is beyond me.  Trying to use the budget process to undo a substantive legislative act never works unless the party attempting it controls both houses and the presidency.  The destruction of Obamacare is a good thing – but only if you have something viable to replace it.  However, it is simply not an achievable thing given the current makeup of the Congress and the presidency.

It is for these reasons that everyone but the Republicans knew that, in the end, the Republicans would cave.  Add to that the naked personal ambition and egos of some of the prominent Republicans who are more than willing to sacrifice substantive progress for personal aggrandizement and you ensure the failure that occurred and the back-stabbing that preceded and followed it.  (Count among those such luminaries as Sens. John McCain (R-AZ),  Lindsay Graham (R-SC) and Ted Cruz (R-TX)).

A recent Wall Street Journal  article by Peggy Noonan struck me as particularly apropos.  No, not the whole article, since Ms. Noonan took significant liberties by inventing a conversation with long-deceased Sen. Robert Taft (R-OH).  Rather a particular description of Mr. Taft:

“In his personal style he was cerebral, courtly, and spoke easily, if with limited eloquence.  The secret of his greatness was that everyone knew his project was not ‘Robert Taft’ but something larger, the actual well-being and continuance of America.  His peers chose him as one of the five best senators in history, up there with Daniel Webster and Henry Clay.”

The actual well-being and continuance of America.  Think hard and tell me whether you can apply that standard to any of the major players in this most recent drama.