Articles

The Treacherous Politics of the Fiscal Showdown

October 02, 2013

They said they wanted to avoid it, but at the stroke of midnight Monday, four people got the government shutdown they wanted.

President Barack Obama and Senate Majority Leader Harry Reid wanted a shutdown to restore the president's sagging approval ratings, cost Republicans House and Senate seats in the 2014 midterm election, and get their way in the fights over a continuing resolution and debt ceiling.

In the CR battle, Mr. Obama and Senate Democrats want to increase spending by $91 billion this fiscal year above the levels set by the 2011 budget agreement. Also, the president doesn't want to offset a debt-ceiling increase with future spending reductions.

On the Republican side, Sens. Ted Cruz and Mike Lee assumed that a shutdown, or at least a threat of one, would cause five Senate Democrats to support defunding ObamaCare, and that Mr. Obama would sign such a measure. That was never going to happen.

House Republicans have landed on more defensible ground, offering on Monday to fund the government at current levels while making two important changes to ObamaCare. First, the House approved a one-year delay for the individual insurance mandate. The president already delayed the employer mandate, saving businesses $12 billion next year.

A delay in the individual mandate will save $15 billion. It is politically popular. A Sept. 26 American Action Network poll of 18 swing congressional districts showed that 55% of voters favored a one-year delay of the individual mandate, with 35% opposed.

Second, the House would revoke the ObamaCare waiver Mr. Obama issued in August that allowed members of Congress and their staffs to keep their generous insurance subsidies. All but nine Democratic congressmen and every Democratic senator opposed the GOP proposal. (Every Republican present voted for it.) Instead they protected special privileges for Congress, reminding voters of the arrogance and hypocrisy of the Washington they hate.

There's been little polling on this question, but Americans want Congress to live under the same laws it passes for the rest of us. By failing to accept the final House proposal, the president handed Republican candidates, especially Senate candidates, powerful arguments with which to batter Democratic incumbents long after the shutdown ends.

There's something else at play here. When Mr. Obama refuses to negotiate with Republicans or Mr. Reid refuses to appoint conferees to work out a compromise with the House, it reveals Democrats as inflexible, unreasonable obstructionists. This is a vulnerability Republicans can and should exploit. Indeed, Mr. Obama's Wednesday invitation to congressional leaders to discuss the shutdown may reflect the president's understanding of his political vulnerability.

There's a bigger fight coming this month: the debt-ceiling vote. Mr. Obama wants a deal that kills the sequester, allows for higher spending, and paves the way for taxes. His problem is that voters back Republican insistence that any debt-ceiling increase be accompanied by spending reductions. A Sept. 20-23 Bloomberg National Poll found 61% saying that it's "right to require spending cuts when the debt ceiling is raised even if it risks default."

Some Senate Republicans are discussing bundling the mandatory and discretionary spending cuts in the president's own budget with an equal amount in Republican suggestions for future spending cuts, and offering to increase the debt ceiling by that amount. The thinking here is that Mr. Obama could hardly object to a debt-ceiling increase offset by his own proposed spending cuts.

Whether or not this idea catches on, Republicans must have a serious debt-ceiling plan ready quickly. Otherwise, Mr. Obama and the Democrats—or a faction within the GOP's own ranks—can whipsaw the party. The stakes are high. The public is increasingly impatient, even enraged, with Washington's dysfunction. Whoever misplays the debt-ceiling debate may sustain the most enduring political damage from these back-to-back fiscal showdowns.

A version of this article appeared October 3, 2013, in the U.S. edition of The Wall Street Journal, with the headline: The Treacherous Politics of the Fiscal Showdown and online at WSJ.com.

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