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So here we are at the end of the GOP's delusional, quixotic and extremely disruptive and costly strategy to shutdown the government for 2 weeks and threaten a credit default in order to cut the salaries of their staffs. The final Reid-McConnell bill was overwhelmingly supported in the US Senate 81-19 (all 19 no's were GOPers. Cruz, Cornyn, Toomey and Johnson were the most notable). The President made brief remarks following the Senate vote, was gracious but truthfully stated that the US Congress needed to earn back the trust of the American people.  That annoyed the sensitive tea partiers (who all voted no btw so who really cared what they thought!), but the House voted anyway to pass the bill 286 – 154. Nancy Pelosi demonstrated her supreme leadership skills by delivering 198 yes votes and 2 abstentions.  Boehner only managed to get 85 yes votes. The overwhelming number of 'yes' votes came from blue state GOPers plus the KY delegation (probably to support McConnell). The 'no' votes overwhelmingly came from deep Red America.  Paul Ryan voted 'no', and seemed oblivious to the fact that he was basically ignored and weakened in this process (a good thing for the country).

So the bill extends the debt ceiling until Feb. 7th, 2014 with extraordinary measures for Treasury to extend it effectively until the summer. It re-opens the government and funds it at current sequester levels until January 15th, 2014. It also convenes a new budget committee, which Democrats had demanded for months, to negotiate a new budget with timelines to report to Congress (mid-December).

In addition to these measures, the bill includes a number of interesting tidbits. First, all furloughed workers receive back pay (GOPers had resisted this last week). Second, the income verification requirement does little more than to ask HHS to certify that it has the ability to verify income of potential ACA subsidy recipients. This was in the works already and seems to be little more than an IT fix with reporting by the Secretary and the auditor during 2014.

Third, and most interesting to me, are the list of goodies in the bill.  

-    Mitch McConnell received the ‘Kentucky Kickback’ to increase funding for a major federal dam project in Kentucky (over $2 billion increase).
-    SSA appears to receive additional money, $273 million, for redeterminations of benefits eligibility and $470 million in additional budgetary authority
-    The Privacy and Civil Liberties Oversight Board gets $3.1 million
-    John McCain appears to have won an increase of $36.6 million or thereabouts for wildfire suppression activities.
-    Frank Lautenberg’s widow receives $174,000.
-    No COLA adjustment for members of Congress’ salaries for 2014.
-    Veterans Affairs gets an additional $2.5 billion for general operating expenses.
-    Department of Transportation gets an additional $9.2 billion, with $450 million set aside to assist Colorado with its recent flooding disaster.

There are other provisions which require a bit more research and time to accurately describe, but you get the picture. This is the old politics of give and take. Reid and McConnell have basically started the conversation of how to get around the sequester for discretionary spending. Some may be up in arms about the earmarks, but I much prefer it to the heightened influence of well-funded ideologues like the Koch Brothers. As long as we have a Supreme Court that is so hostile to campaign finance limits, earmarks are necessary to keep members somewhat reasonable.  

President Obama and the Democrats are obviously big winners. They were willing to take risks to fend off a hostile takeover of our government by a group of extremists.  Obama has probably put an end to this type of brinksmanship for the remainder of this term because the GOP now knows that they will pay a political price.

Among the Republicans, Paul Ryan is a big loser. None of his ideas made it into the final bill. He was the architect of the default strategy (which was actually more radical than the tea party defund strategy) and his plan was hijacked by Ted Cruz.  Ryan was never able to inspire members to get behind his vision of taking political risks and imposing hardship for the cause of entitlement reform.  He also didn’t lend his support to Boehner to fend off the tea party. Imagine if you planned a big event for 1 year and then someone crashed your venue, took it over and and had their own party in the hall that you paid for. That’s Paul Ryan today. I don’t think he will get his way in the budget talks without the credible threat of a government shutdown or default, and I would not be surprised if he chose not to run for re-election in 2014.

Ted Cruz is a big political winner, from his perspective. Yes, everyone hates him. He’s ok with that. He used this manufactured crisis to weaken the Gingrich era GOP establishment. He undermined Paul Ryan, embarrassed Boehner, and unnerved Mitch McConnell. He raised a lot of money for his PAC, diverted money from the GOP party machinery and is now the de facto leader of the tea party. He wanted a civil war within the GOP and he has it now. There is a bit of an Emperor Palpatine from the Star Wars epic (who was a Senator before he politically positioned himself to undermine the Jedi Republic and impose a dictatorship) in him. Cruz needs to be watched because he has specific long-term aims. I believe he wants to take control of the GOP and then subversively undermine the foundations of our representative democracy to establish a republic that is governed exclusively by his group of true believers. He is scary.

Mitch McConnell definitely helped himself. He was not afraid, unlike Boehner, to go against the tea party even though he is facing a challenger. Rand Paul tacitly approved his negotiations (even though Paul himself voted no on final passage). It tells me that he thinks Alison Grimes is a real threat and perhaps Kentucky might be a purple state with the right candidate.

John Boehner is perhaps solely responsible for this crisis dragging out as long as it did.  His leadership took a real hit.  He came across as weak.  However, within the GOP world, he is earning some appreciation for being willing to work with those who wanted to fight the good fight (whatever that means). With Ryan diminished, Boehner could have more power at least among the 85 GOPers who voted 'yes'. However, only 85 members voted yes.  A solid majority of the House GOP caucus voted to default.  This means that he can never get anything done without Nancy Pelosi’s support.  Though I initially thought Boehner would resign, it doesn’t seem that anyone else wants the job.  He'll stay on, but is basically in the same position he was before. He can’t get a deal done.

As we turn to the budget talks, it is unclear how those will turn out. I doubt that we will see another shutdown or default. The tea party caucus will support it, but as we get into an election year, self-preservation will push the GOP away from such tactics. Obama and Reid have an effective game plan to deal with these threats and the GOP knows it.  There is no point in pushing a shutdown/default if you can’t get anything for it.

I do believe that the Republicans will be less united around the sequester and are unlikely to muster the passion and commitment required to push through medicare cuts and other entitlement reforms in an election year. The only reason they want to cut spending is to hurt Obama, not because they actually believe in Paul Ryan’s theories. Now, they have learned that hating Obama is not an effective governing philosophy. In fact, for a lot of Republicans, this shutdown/default confrontation represents the first time that they have acknowledged that Obama beat them.

If the GOP wants a deal, it will have to be mostly on Obama’s terms.  Obama does want a mini-grand bargain that increases domestic spending on key initiatives, eliminates the sequester, and puts in some tax reform and entitlement reforms as a trade-off.  The GOP will object to anything that raises revenue, but political reality might push Boehner to take the deal that Obama is offering and use Democratic votes to get it done. At worst, we will have more sequester cuts take effect but no shutdown or default and will have to fight it out in the 2014 election.

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