They lost. They lost and they know they lost. They lost and they've even been through most of the stages of grieving over the loss. So how come the Republicans in the lame duck Congress are still acting as though they have any leverage in the negotiations over tax and spending policy that have to happen between now and year's end if we're to avoid the automatic tax increases and spending sequestration that will kick in if Congress and President Obama can't make a deal? Well, they don't have any leverage, and they know that too. They're behaving the way they are for a different reason. They've painted themselves into a corner.
It isn't that Boehner and Co. can't stand the idea of making a deal. It isn't even that they're so afraid of Grover Norquist -- he has had to appear publicly more and more frequently lately, and the more he does, the more obvious it is that his intellectual and emotional development stopped around the time he wrote that pledge, at age 12. The problem is that if they agree to a reasonable deal, and the economy responds favorably, then even their low-information base may realize that the Republicans' whole low-tax, small-government premise has been, in a word, a lie.
Today's Republican Congress members have a real problem. Many are professional politicians, accustomed to the privileges and power that come with their position -- a position they want to keep. Their party, of course, is in the thrall of the Tea Party, the conservative think tanks, and the aforementioned overgrown twelve-year-old. That position led to the strategy that Mitch McConnell so eloquently laid out at the beginning of the President's first term. The Republicans would fight for outlandish tax cuts to provide a return for their investors, enact punishing spending cuts to shrink government and mire the economy in recession, and blame the resulting deficits and economic malaise on President Obama. As part of their strategy, they cranked up their whole propaganda apparatus -- Fox, Beck, Rush, and even the Wall Street Journal -- to sell the idea that tax cuts for the rich are the only medicine that could save us from catastrophe. If it had worked, even Mitt Romney would've had a chance to unseat the President.
But it didn't work. So now Mr. Boehner, Mr. McConnell, and their Republican colleagues have a problem. The Murdoch complex (mostly Fox and the WSJ) repeated the tax-cuts-for-the-rich canard so loudly and so often that even some reasonably intelligent people have begun to believe it. By some alchemy I don't fully understand, the deranged rantings of Rick Santelli on CNBC have made schoolyard libertarianism a topic that might come up somewhere other than a college dining hall. But as the calm, moderate and liberal voices that have taken up the matter have steadily reminded us, the whole Republican economic program is just smoke and mirrors. If Boehner and McConnell cut a reasonable deal and the economy responds well, then even their base will realize they've been had. So the Republican "leadership" in Congress has every reason to try to cut a crappy deal, and hope the economy takes it badly so they can somehow pin the blame on the Democrats.
The President and the Democratic Congressional leadership have a choice. They either have to let the Republicans out of their corner, or trap them in it permanently. I'm not sure which way to expect them to go. The way to let the elephant out of the corner is to allow the Bush tax cuts -- all of them -- to expire, and then allow the Republicans to claim some credit for a partial restoration of the cuts to some income level in the President's preferred range. The main risk is that this course could result in accidental cuts to Social Security and Medicare, which may be why Ms Pelosi has been so firm in declaring that those programs are not up for negotiation. So for now, I think our leaders are following the right course. They're pushing for a straight-up, sane deal, designed to place our public finances on a sustainable path and to avoid driving the economy back into the soup. But they'll do well to realize that their adversaries are in a corner, so they're even less likely than usual to act rationally.