MUTH'S TRUTHS 12/22/2012

Beware of ‘fiscal cliff’ pessimism
By Aaron Blake of The Fix
Updated: December 28, 2012

To hear Hill staffers and top negotiators tell it, it’s very likely that the country is headed over the “fiscal cliff.”

Take that with a grain of salt.

The last days of any high-stakes deadline situation in Congress are fraught with these kind of doomsday prophecies. That’s not to say House and Senate leaders are lying when they say the cliff may be unavoidable; indeed, getting something to pass this late in the game remains very difficult. But it’s also true that these things often seem hopeless until, well, they don’t.

Both sides have little motivation to budge in the final days of a negotiation. After all, the longer you hold out, the more time you give your opponents to become the first to blink.


That’s the stage we’re at right now — the “blink” stage.

Both the debt ceiling and government shutdown situations last year took on similar flavors toward their ends, with some predicting there would be no agreement in time. In both cases, the two sides came together eventually to produce something.

On the eve of the shutdown in April 2011, Senate Majority Leader Harry Reid said he had lost faith that the shutdown could be averted, and House Majority Leader Eric Cantor (R-Va.) — and most experts – agreed.

“But I am not nearly as optimistic, and that’s an understatement, as I was 11 hours ago,” Reid (D-Nev.) said the day before the deadline.

Similarly, when the debt ceiling fight went down to the final days in mid-2011, some were predicting there would be no deal, including Sen. Lindsey Graham (R-S.C.) and former senator and debt commission co-chairman Alan Simpson (R-Wyo.). When talks broke down late in the game, President Obama said “we have now run out of time” and House Speaker John Boehner (R-Ohio) swore that an agreement was not as close as people thought.

Now, the “fiscal cliff” could very well be different. And it’s notable that many of the major players — rather than just a few — are professing pessimism about striking a deal.

But we also need to recognize the importance of gamesmanship and deadlines in this whole debate.

Politicians are smart, disciplined messengers, and the things they say are designed to elicit reactions from the other party. So when they predict there will be no deal, what they’re really saying is, “We’re not budging, and the ball is in the other side’s court.”

At the end of a potential crisis, that can change rapidly. And given Washington’s track record, it’s hardly surprising that this is coming down to the very end, when disaster is much more imminent than it is four days out.

It’s quite possible there will be no deal, but it’s also quite possible this will be resolved at the 11th hour — or soon thereafter.