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Thursday, November 17, 2011

Bargaining Imbalances and the Supercommittee

Matt Yglesias has a post up today titled Ozone and the Fundamental Asymmetry of American Politics.  In it, he looks at the Obama Administration’s decision a few months ago to overrule the EPA and not implement tighter regulations on smog and ozone emissions. 

Yglesias explains that for all the effort to muddy what happened, the bottom line is simply that the business lobby didn’t want to see these stricter rules imposed and the business lobby won that argument.  Yglesias goes on to point out that

You simply cannot imagine the reverse scenario playing out in a Republican White House.  It’s inconceivable that environmental groups would win an internal debate in a Republican administration. . . .

. . . .  American democracy is characterized by “interest group pluralism.”  But business has a “privileged position” in the pluralist dynamic.  It’s perfectly conceivable for corporate managers and business lobbyists to dream of a world in which there are no labor unions or environmental pressure groups.  But neither the AFL-CIO nor the Sierra Club nor anyone else to the right of Lenin is actually prepared to wage a root-and-branch war against the existence of large and powerful business enterprises in the United States.   In fact, progressives are counting on the existence of such enterprises every bit as much as conservatives are.  The upshot is to create an imbalance in the interest group bargaining process.  (emphasis in the original)

I think that assessment is spot on the money, but I’d like to point out that this type of imbalance does not apply just to the business community but extends throughout our policy debates.

* * *

Take the so-called Supercommittee, which right now is failing to reach agreement on a deficit-reduction plan (good!).  If it fails to reach an agreement, then budget cut “triggers” get invoked which automatically result in $600 billion in cuts to domestic programs – which supposedly Democrats would really hate – and $600 billion in cuts to defense spending – which supposedly Republicans would really hate.  The idea behind this plan was that pulling these triggers would be so unthinkable that the Democratic and Republican negotiators on the Supercommittee would be forced to come to an agreement to avoid these terrible cuts.

But, again, there is a fundamental imbalance here.  While it is true that the Republican Party is more invested in dealing government largesse to its military contractor big money donors, most Congressional Democrats don’t want to see big cuts to the military either.  On the other hand, the Blue Dogs and a number of other conservative-leaning Democrats don’t particularly care about preserving entitlements and domestic spending and seem to think that by slashing such programs they’ll be hailed as “fiscal policy tough” by the voters back home.

So we are now seeing precisely what one would expect to see.  The Supercommittee is not going to reach an agreement, and then both parties will work together to rejigger the “triggers” so that military spending does not get cut.  I will genuinely be surprised, however, if the domestic spending trigger gets modified.  I fully expect domestic spending to be cut after the Supercommittee fails to come up with a plan but for military spending to be just fine.  And call me cynical, but I kind of suspect that this was the plan all along, from the very moment this bogus “Supercomittee Plan” was first announced.

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