The shiniest such prize would be the achievement of a grand bargain on entitlements and tax reform: a bipartisan agreement that would put the nation’s fiscal house in order for years, and maybe decades, to come. The extent to which Obama pines for this was illustrated by his ardent pursuit of such a megadeal in 2011, which ultimately fell apart when House Speaker John Boehner proved unable to move the tea-party faction in his caucus to accept new revenues.
But now, with the potentially disastrous consequences of the so-called fiscal cliff looming large and with the Republicans’ collective bell having been deafeningly rung by the voters on Election Day, the prevailing circumstances are considerably riper for (grand) bargaining than they were back then. That Boehner, to begin with, is ready to deal was screamingly apparent from the conciliatory tone and softened substantive posture he adopted late last week. And while the Senate minority leader, Mitch McConnell, driven by his own fear of being primaried from the right in 2014, assumed a more typically recalcitrant stance, the presence of sane conservatives such as Lamar Alexander, Bob Corker, Mark Kirk, and Rob Portman will likely be sufficient to counteract the hard-right elements in the upper chamber and make legislating possible.*
Taxes remain a tricky issue with Republicans, to be sure. Having campaigned relentlessly on raising rates for the wealthy, Obama continues to insist that any deal do that. And though Boehner says he’s open to new revenues, he remains opposed to hiking rates. In truth, the speaker may be engaging in Kabuki here. If nothing is done, all of the Bush tax cuts would expire on January 1—which would almost certainly be followed by a restoration of the cuts for earners making less than $250,000. This would be Nirvana for Republicans: spared voting for a tax increase and then allowed to vote, in effect, for a new tax cut. Democrats, meanwhile, would get exactly what they wanted in the first place. A nifty solution all around, no question.
To bring home a grand bargain, Democrats will have to compromise, too. But among the party’s congressional leaders, “the fact that there is going to have to be entitlement reform has been internalized,” says one of the savviest Democratic lobbyists in the capital. And while there will no doubt be some resistance on the left, this person adds, “Obama doesn’t give a damn about those people—he will happily throw them under the bus. That’s what reelection really means for him: He no longer has to worry about his base, about labor, about his left flank.”
For Obama, the political appeal of striking a grand bargain is easy to see, for it would make an ideal bookend to health-care reform—the latter a long-held liberal dream, the former a centrist fantasy so delicious it might bring Pete Peterson to climax. But it is also essential to the country’s economic health, and not just in terms of taming our deficit, but in freeing up resources for the kinds of investment in human capital and infrastructure that are critical to America’s global competitiveness and domestic prosperity (and that should be priorities for any sane progressive, unless they believe that a government that boils down to nothing but a wealth-transfer system from the young to the old is somehow desirable).
Because of the impending fiscal cliff, we will know very shortly whether a grand bargain is in the cards. Either way, the question is, what happens then? And the answer is in plain sight: immigration reform. Indeed, Senate Democrats are already talking about moving on legislation shortly after Obama’s inaugural. During the campaign, the president described the lack of action on this front as one of his biggest first-term failures and pledged to take up the cause “in the first year of my second term.” But the action of consequence here is taking place on the other side of the aisle, where, in the space of 24 hours late last week, comprehensive immigration reform was endorsed loudly by Boehner, Rupert Murdoch, and Sean Hannity (who, like Obama on the topic of gay marriage, proclaimed he had “evolved” on the issue).
It would be difficult to envision, without the aid of psilocybin, a more vivid sign of the GOP’s dawning recognition of the peril it is now facing. With Democrats having gained a potent hold on the coalition of the ascendant, Republicans find themselves in a situation like the one their rivals met in the wake of the 1988 election: markedly out of step with the country, shackled to a retrograde base, in the grip of an array of fads and factions, wedded to an archaic issues agenda. As Matthew Dowd, George W. Bush’s chief strategist in 2004, put it on Good Morning America, the GOP has become “a Mad Men party in a Modern Family America.”
And so, like the Democrats in 1988, the task before the Republicans now is to undertake a root-and-branch redefinition of their party—and not just as a matter of image or “branding,” but on substance and policy. The Daily Caller’s Matt Lewis argued last week that what Republicans need is “modernization, not moderation,” and while I might object that they actually need some of both, an important point lies here. The project the GOP must embark on need not and should not entail a wholesale abandonment of conservative principle. But there is nothing necessarily conservative about ultra-restrictionist positions on immigration, as Bush 43 (who won north of 40 percent of Latinos in 2004, compared with Romney’s 26 this year) would tell you. There is no necessary incompatibility between being pro-life and pro-contraceptive; to the contrary. There is nothing conservative about denying the science of climate change; better to admit the problem is real and advocate market-oriented solutions rather than government-imposed regulations.
Pulling off the Republican modernization project will require institutional resolve and policy innovation, but also something else: individual leadership of the kind that Bill Clinton brought to the Democratic Party a little more than twenty years ago. Who will be the Republican Clinton, the champion of the GOP’s Third Way? Chris Christie? Jeb Bush? Marco Rubio? Bobby Jindal? It’s too early to say, but the maneuverings of these men and others will be fascinating to behold in the days and months ahead.
The stakes for both sides as we forge ahead are immense. For Republicans, a failure to adapt the new demographic realities would risk not just irrelevance but extinction; as Lewis puts it, “a modern political party cannot exist if it concedes the young, the urban, and the educated.” For Obama, the challenge that awaits is to become something more than a transformational historical figure—a great president. It would be easy to predict that, as each side pursues its ends in competition with the other, both projects will end in tears. But what if these projects prove to be as much complementary as competitive? What if each side, for reasons of its own, edges toward the middle and they wind up meeting there to get some business done? I know it sounds crazy. But crazier than Obama winning every battleground state but one? I think not. So bring on the black swans, baby.
*This article has been corrected to show that Mitch McConnell is the Senate minority leader, not the majority leader.