Which leads us to one of the paradoxes of this election: Democrats have implemented Keynesian stimulus and called for more (Obama’s proposed American Jobs Act, which House Republicans have blocked), while Republicans have denounced it in apocalyptic terms. But a Republican win offers by far the more likely prospects for immediate Keynesian stimulus, partly because Democrats in Congress have shown no taste for the kind of economic sabotage that the Republican caucus has engaged in. The strange alchemy of political self-interest dictates that the best prospect for boosting the recovery, through elevated short-term deficits, requires handing the reins of government over to the party that has blocked exactly this possibility.
Obama tends to leave the contours of his second term pleasantly vague, which has fueled the general impression that he is tapped out and has no particular achievable goals in mind. He often posits that, should he win reelection, Republicans will abandon their strategy of total opposition, citing Senate Minority Leader Mitch McConnell’s unusually frank confession back in 2010 that his top priority was to block Obama’s reelection. “Now, after the election, either he will have succeeded in that goal or he will have failed at that goal,” Obama has said. “And I’m hoping that after the smoke clears and the election season’s over that that spirit of cooperation comes more to the fore.”
There’s little reason to share this profession of faith. Republican obstructionism is not only a strategy to deny the president a second term. Some Republicans genuinely fear Obama, and others fear a right-wing primary challenge if they compromise with him. What’s more, the political calculation that undergirds his opponents’ strategy will not disappear: His popularity is the single biggest factor determining Republican prospects for enlarging their control of Congress and winning the White House. Cutting bipartisan deals increases Obama’s standing and thus reduces theirs.
You might surmise from all this that Obama is simply living in a dream world. That is the conclusion drawn by several of the smartest liberal political analysts I know. I have a different conclusion: Obama does have a plan to break the legislative impasse and settle the long-term struggle over the scope of government. It does not rest on the GOP’s coming to its senses and thinking of the national good. The plan is the very opposite of naïve. And he can put it into effect even more quickly than Romney could enact his own plan.
Here is how it will happen. On the morning of November 7, a reelected President Obama will do … nothing. For the next 53 days, nothing. And then, on January 1, 2013, we will all awake to a different, substantially more liberal country. The Bush tax cuts will have disappeared, restoring Clinton-era tax rates and flooding government coffers with revenue to fund its current operations for years to come. The military will be facing dire budget cuts that shake the military-industrial complex to its core. It will be a real-world approximation of the old liberal bumper-sticker fantasy in which schools have all the money they require and the Pentagon needs to hold a bake sale.
All this can come to pass because, while Obama has spent the last two years surrendering short-term policy concessions, he has been quietly hoarding a fortune in the equivalent of a political trust fund that comes due on the first of the year. At that point, he will reside in a political world he finds at most mildly uncomfortable and the Republicans consider a hellish dystopia. Then he’ll be ready to make a deal.
Leading up to the New Year, there will be a concerted effort to preempt this policy shift, by bringing the two parties together to consummate a version of the endlessly touted (but little-understood) Bowles-Simpson agreement that GOP House members rejected. This is already under way, and is being described in the press as a noble bipartisan effort to avoid something terrible. But it is more accurately understood to be a conservative attempt to avoid a massive shift in leverage in Obama’s favor. Some Democrats get this. (Charles Schumer is one of the few willing to take a hard-ass line against Bowles-Simpson). I also believe that, despite his silence on the matter, Obama gets it, too.
One reason I believe Obama will stand firm and refuse to make a deal in 2012 is that I know what Obama-land looks like when it’s under the spell of bipartisan delusions. After Republicans swept the 2010 elections, they decided to take the regular occasion of raising the debt ceiling, a necessary step to avoid fiscal calamity that had evolved into an opportunity for the opposition party to posture symbolically against the president, and hold it hostage. I spoke with high-level administration policy-makers several times off the record, and they consistently expressed a belief that Republicans would compromise with them on a plan to reduce the budget deficit by agreeing to some form of higher revenue in return for spending cuts.