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Ruth Marcus: The no-big-deal deal

BY RUTH MARCUS Published: January 4, 2013

There were two avenues available for the president and Congress in crafting a deal: big/big, maximizing tax increases and spending cuts, and small/small. In the end, the negotiators chose the route of small/nonexistent — insufficient tax revenue coupled with no spending cuts.

Whose fault is this? You could lament a failure of presidential leadership. What was the president's plan — not just eliminating tax cuts for the wealthy but reforming entitlements as well?

Still, the ultimate blame lies with the House Republican caucus, which spurned two deals (the collapsed Obama-Boehner plan during the debt ceiling fight in 2011, and the collapsed Obama-Boehner plan to avoid the cliff) that were far better, from the point of view of debt reduction, than what ended up passing.

The most effective communicator wielding the bulliest of pulpits could not prevail with a crowd this entrenched in anti-tax craziness.

History offers scant basis for optimism about the prospects for success with the coming cliffs: the postponed sequester, the return of the debt ceiling, the expiration of the continuing resolution to fund the government.

The White House theory is that these forcing mechanisms will provide the spur for additional tax revenue, obtained through tax reform, coupled with spending cuts in the form of changes to entitlement programs. Hence, if not a grand bargain, a good-enough one, just down the road.

But where does the deal leave the administration's leverage to obtain more in tax increases? Certainly not increased from where it was before.

The president can say all he wants that he will not negotiate over the debt ceiling. But there are more negotiations to come — over the sequester and expiring spending bills, and those discussions will be taking place during precisely the same time period as the debt ceiling non-negotiations. If this doesn't make you nervous, you haven't been paying attention.