How the 2014 elections tip prospects for a 'grand bargain' on US deficits
Whoever wins the White House – President Obama or Mitt Romney – will need help from the other side of the aisle in the Senate to reach a deal on meaningful debt- and deficit-reduction. But key senators up for reelection in 2014 face wrenching tradeoffs.
If President Obama wins a second term, a top White House aim is to work with Congress to strike a “grand bargain,” a massive debt-reduction deal that would shore up the government's finances for the next decade or more.Skip to next paragraph
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Members of Mitt Romney's presidential transition team, too, recently said a grand bargain would be a goal of their man's first term in office.
But any deal Mr. Obama or Mr. Romney strikes – if either can get one at all – may be shaped in important ways by ... you guessed it, lawmakers looking ahead to Election 2014. At least a dozen senators facing reelection that year may well size up their options this way: vote for legislation that contains some politically explosive provisions and face fury from certain constituents, or risk the nation’s credit rating and continued economic malaise by punting pressing fiscal issues down the road once more.
At the center of any deal would be nine Democratic senators from red and purple states, and five Republicans in conservative states who might see a primary challenge if the debt-reduction package includes tax hikes.
How this group acts will do much to shape what either president can achieve. If Romney wins the White House, and even if Republicans also manage to seize control of the Senate, he would still have to attract enough Democratic senators to get the vote total for a GOP-shaped grand bargain to 60. The same holds for Obama, assuming a Republican-led House and a slim Democratic majority in the Senate.
Republicans face antitax backlash
Many independent economists and budget analysts insist that the US needs to reduce debt by $4 trillion over the next decade to stabilize its financial situation for the long term. Getting to that number would almost certainly require both parties to surrender cherished ground. For Republicans, that boils down to one word: taxes.
If Obama is president, he has vowed to veto any extension of the Bush-era tax rates for annual household incomes over $250,000. If he prevails, those higher taxes on the wealthy would boost government revenue by almost $1 trillion over 10 years. That $1 trillion number fits snugly into the formula, offered by several bipartisan panels, of roughly $3 in spending cuts for every $1 in higher tax revenues as the way to reach $4 trillion in debt reduction.
If that $1 trillion in new taxes is part of any eventual deal, there are five GOP senators up for reelection in 2014 who potentially could vote for it. Two – Sens. Saxby Chambliss of Georgia and Mike Johanns of Nebraska – are members of the “Gang of Eight,” a bipartisan group of senators looking to flesh out a grand bargain-esque agreement in backchannel talks. Three others – Sen. Lindsay Graham of South Carolina, Sen. Lamar Alexander of Tennessee, and Sen. Susan Collins of Maine – have supported bipartisan deals in the past.
But what's the risk that the GOP's base of antitax adherents would revolt, perhaps targeting those incumbent senators for primary challenges? Pretty good.