Post-Election Post 3: The Election and the Failure of Fiscal Commissions

For the last week, the media has been focused on the Petraeus scandal (which, admittedly, is a pretty solid sex scandal, complete with a classic New York Post headline, although “Cloak and Shag Her” does not quite reach the epic heights of, say, the Post’s Spitzer scandal masterpiece.) Now it is focusing on the conflict in Israel.   But attention will soon return in full to the impending “fiscal cliff” or the huge amount of tax increases and spending cuts that will automatically occur in January unless legislation is passed.  I won’t venture any thoughts about the substance of these negotiations, but I will discuss what the election can tell us about the likely success of different procedures Congress might use to come to a deal.

One solution that frequently gets made to either the tax or spending parts of the cliff is a “kick the can” solution, in which some cuts and tax increases are made today and then a commission of some sort – a blue ribbon panel of experts or congressional leaders – will propose a more lasting solution in due time.  Over the past 30 or so years, we have seen some version of the same strategy in lots of areas (perhaps the most famous is the BRAC base closing commission) in lots of different procedural forms.  The concept is that the commission will bring some proposal to Congress that it would not have come up with on its own but that will be able to get a majority vote.  Of course, the fiscal cliff is a product of such commissions – first Simpson-Bowles and then the Super Committee – each of which were tasked with coming up with some kind of grand bargain on taxes and spending but failed, the latter despite the upcoming unattractive to both sides sequester spending cuts that were intended to drive them to make a deal.  Yet the idea of a successful commission, full of sober gray-haired wise men, still dominates the fantasies of at least some of Washington’s budget elite.

One lesson we can take from the election is that such a fiscal commission is unlikely to solve the problem.  The argument – continued below – requires a little bit of positive political theory.  But the basic idea is pretty simple.  The success of commissions is predicated on the idea that there exist latent majorities in Congress that are not reached because of the agenda control of Speaker and Majority Leader.  Whether this is due to Arrovian cycling or Weingast-style distributive politics or something else, commissions are meant to create a focal point or new cycling choice that Congress would not reach on its own but that can get a majority vote.   In the 1970s and 80s, there was a great deal of space for these types of commissions to work because the differences between the parties on most major issues were not so clearly defined, party line voting in Congress (and the electorate) had ebbed, and preferences on a number of issues did not track the main dimension of partisan competition.

But the election produced more polarized parties and majority (and minority) caucuses in Congress with Members that are very similar to one another and that agree on a greater number of issues (i.e. preferences are more unidimensional).  The result of this is that there are likely few latent majorities.   While Congress may decide to create a commission or a panel of experts, or some binding targets or some other fixed procedural tool, such methods are unlikely to create a long-term deal.  The election (and the several elections that proceeded this one) created a very strong party system.  And the result of such a system is that there are few (and maybe zero) deals other than those that President Obama, Sen. Reid and Rep. Boehner can make, on the fiscal cliff or anything else.  Commissions, Gangs of Senators, etc. are tools that may have worked in previous Congresses and on certain types of issues, but they are unlikely to play a useful role in today’s Congress.

The idea that legislative majorities are unstable is central to work on positive political theory.  Arrow’s impossibility theorem shows that there are no voting rules that can stop cycling, or situations where the legislative prefers A to B, B to C and C to A.  Further, Barry Weingast showed that legislatures can end up in a Prisoner’s dilemma like problem, where each member prefers low taxes to high taxes, but prefers spending in her district in all situations.  When preferences take this form, a “distributive politics” norm can emerge where no member challenges the pork project of another for fear that her own pork project will be cut, and the legislature ends up passing budgets with an excessive amount of spending and taxes.

Political parties inside legislatures are a solution to these problems, as Mat McCubbins and other have shown.  Members of a party caucus avoid cycling and distributive politics problems by giving agenda control to a leader, say the Speaker of the House, and by giving the leadership the power to punish deviations from the party line.  Why would legislators do this if stops them from proposing amendments that would pass and would achieve their ends?  They do so because being a legislative leader is more attractive than being a back-bencher, and as a result the leader has the proper incentive to maximize the joint electoral gains to members of the caucus (and to expand the caucus).  The leader does so through maximizing the value of the party brand – something that all members of the caucus use in the elections – by proposing generally attractive policies.  This provides electoral benefits to the caucus, and has the added benefit of making informed voting easier, as voters only have to learn the meaning of the party brand rather than the individual stances of legislators.  (In legislatures without parties, like Nebraska’s unicameral legislature, there is little electoral accountability.)

Thus, the function of parties in legislatures is to suppress potential majorities from forming in Congress.   When parties fail to suppress distributive politics on certain issues– base closing, or trade before 1932 – commissions or executive control of legislative procedure become an attractive model for imposing something like party control. As Lawrence Becker has shown, commissions or executive control of the generally work by providing a focal point and stopping amendments from being proposed, thereby ensuring that the cycling stops where the proposal is.  Commissions can also work by accessing majorities that were suppressed by party leadership.  To the extent that the Speaker and the Majority Leader can’t agree, we might imagine that giving agenda control to a third party will allow the passage of bills that fit the preferences of a moderate majority, or one that doesn’t fall along the ordinary axis of politics.

But a major trend in Congressional elections over the last 30 or so years has been the nationalization and polarization of the parties.  There are will be no Democrats in the Senate more conservative than the most liberal Republican, and the House is even more polarized.   Further, much Congressional candidate behavior is today explainable by party, as Steve Ansolabehere, James Snyder and Charles Stewart have shown, and not by anything to do with districts.   In 2012, we saw lots of races between liberal Democrats and conservative Republicans, as Boris Shor’s data makes clear, although the separation among candidates isn’t quite as clean as the separation among actual Members.  Geographic difference – distinct tribes of northeastern or western democrats or republicans – is just a much weaker force than it once was.   (You are more likely to find Waldo than a Blue Dog in the next Congress.)  Further, dimensionality – roughly  the degree to which issues do not track the main right/left cleavage in Congress – has decreased continuously since the 70s.

For voters on election day, this has made our lives much easier – we need very little information about the individual candidates in order to vote.  And when we had one party controlling both Houses, we saw a record amount of legislating.  But the polarization, nationalization and the move toward unidimensionality has meant that commissions are unlikely to work.  The composition of the party majorities is that there are just fewer latent majorities inside the House or Senate.  There are not a sufficient number of moderates, or even Members differentiated in their preferences in any way from other Members of the majority.   The coming together of party candidates has meant that parties there are fewer latent majorities and the parties are more successful in organizing the legislature, as Aldrich and Rhode show.

There may yet be a deal between the leaders of each party that involves some fall off from Members worried about primaries or who can’t be whipped for some reason.   But the idea that Boehner, Pelosi, Reid and McConnell are holding back some deal that a blue ribbon commission or a Gang of Senators could access is quite unlikely.

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