The White House and the Obama campaign get a lot of guff for resting their second-term hopes on the idea that the GOP will self-moderate after another disappointing loss. I get that this seems absurdly naive on its face. Romney’s the squish who, if Obama wins, will have lost along with Tommy Thompson and Scott Brown (most likely) in what Republicans could construe as the failure of moderation as a political strategy.
But I think one post-election event will force Republicans to grapple with the moderation question.
If the Bush tax cuts expire at the end of the year, it’ll give President Obama about $4 trillion in revenue over the coming 10 years. That’s way, way more than he’s asked for, more than he presumably wants, and more than the economy can easily bear — so everyone will have a big incentive to negotiate backwards from it.
Alternatively, House Democrats and Republicans could pass legislation Harry Reid maneuvered through the Senate a few weeks back to extend all the Bush tax cuts, except those benefiting higher income people. Yes, that would require Republicans to fully cave and affirmatively vote for higher revenue during the lame duck. But by giving Obama the bare minimum he’s asked for, it would limit the damage — to about $800 billion over 10 years. Thus far and no further.
Politically, that would be a very heavy lift for John Boehner — which helps explain why Harry Reid’s pushing so hard for it and why Boehner himself recently said he won’t support it even if Obama wins.
But if you’re a conservative and your ultimate goal is to keep federal revenues as low as possible, it’d be the easiest and smartest move, even if it’d also be a symbolically distasteful gesture. Moreover, since Senate Democrats already passed the bill, Mitch McConnell et al might not mind the idea of leaving everything up to the House.
Those are the two likeliest scenarios. Both would require Republicans to come to grips with higher revenues. But both also point toward a more cooperative Republican Party. If Boehner cuts the tea party loose and allows higher taxes through the House during the lame duck that’ll be a huge break from past practice, with unpredictable down-the-line consequences for legislating in the next Congress. On the other hand, if all the Bush tax cuts expire, Democrats will find themselves with more negotiating leverage than they’d have if Republicans preemptively gave them a big piece of what they’re asking for right away. If taxes go up by $4 trillion, conservatives will demand large tax cuts. But suddenly they’ll have to cut deals with Obama to get them — perhaps the sort of deals Obama imagines when he talks about “breaking the GOP’s fever.”
Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight, and the debt limit fight. He can be reached at firstname.lastname@example.org.