During his first term, President Obama faced a wicked problem: How do you govern in a highly polarized, evenly divided country with House Republicans who seem unwilling to compromise? Obama never really solved that one, and he was forced to pass his agenda on partisan lines (during the first two years) or not pass it at all (the final two).
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Now re-elected with Republicans still in control of the House, Obama faces the problem again. You might say the success of his second term rests upon him solving it.
Some on the left are suggesting that he adopt a strategy of confrontation and conquest. The president should use the advantages of victory to crush the spirit of the Republican House majority, they say. Reject the Grand Bargain approach. Instead, take the country over the so-called fiscal cliff. Blame it on the Republicans who are unwilling to even raise taxes on the rich. Wait until they fold, and then you will have your way.
The first thing to say about this strategy is that it is irresponsible. The recovery is fragile. Europe may crater. China is ill. Business is pulling back at the mere anticipation of a fiscal cliff. It's reckless to think you can manufacture an economic crisis for political leverage and then control the cascading results.
Second, it's terrible politics. Obama could probably triumph in a short-term confrontation, pushing through higher tax rates on the rich that wouldn't even produce enough revenue to cover a tenth of the deficit. But he'd sow such bitterness that it would be the last thing he'd pass for the rest of his term. The Republican House majority isn't going to magically disappear.
Finally, it misunderstands the state of the G.O.P. This is not the Republican Party of 2010. Today's Republicans no longer have an incentive to deny Obama victories. He's never running again. Most of today's Republicans understand that they need to decontaminate their brand. They're more open to compromise, more likely to be won over with deal-making than brow-beating.
The liberal left wing, like the Tea Party types, has an incentive to build television ratings by fulminating against their foes. But President Obama and John Boehner have an incentive to create a low-decibel businesslike atmosphere. The opinion-entertainment complex longs for the war track. The practitioners should long for the deal-making track.
Before he gets lost in the mire of negotiations, the president could step back and practically describe the task ahead. Between 1947 and 2007, the U.S. economy grew an average of 3.3 percent a year. But over the next few decades, according to forecasts from the Congressional Budget Office, it's projected to grow only at 2.3 percent per year. The task ahead is to make the sort of structural changes that will get America back on its old growth trajectory.
Then the president could remind everyone that there's lots to do. Some of the things on the to-do list are things Democrats relish doing: investing in infrastructure and basic research; reforming immigration to attract global talent; investing in student loans and community colleges; trimming the annual $1.1 trillion in tax loopholes, many of which go to corporations and the rich.
Other things the Republicans will surely relish doing: simplifying a tax code that has bloated to 74,000 pages; streamlining the Code of Federal Regulation that has metastasized to 165,000 pages; slowing entitlement spending.
But the point is the only way to get things done in a divided polarized country is side by side — an acceptable Democratic project paired with an acceptable Republican one.
The fiscal-cliff talks are just the first chapter in this long process. In this first episode, the Democrats should get higher revenues from the rich (elections have consequences) and the Republicans should get some entitlement reform. But the main point is to lay the predicate for the bigger deals to come.
This is about horse-trading. It's about conducting meetings in which people don't lecture each other; they deal. It's about isolating those who want an economic culture war. It's about making clear offers and counteroffers.
If you want a great example of how these deals might work, check out a new paper at Third Way called The Bargain. It offers a perfect model of how you might structure a series of big trades to move the country back on the growth path — on innovation policy, tax policy, spending policy and so on.
The more you put on the table, the more trading is possible, the better the atmosphere and the more you might get done. If you only put one idea on the table at a time, then everybody gets gridlocked and nothing gets done.
The economic crisis interrupted him last time, but President Obama still has a chance to build a great middle-class economy. It'll take a dealmaker, not a warrior.
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