The United States will go over the “fiscal cliff” on January 1st if Congress and President Obama are unable to reach a deal to prevent automatic tax increases and cuts to defense and domestic spending. The economic consequences of going over the fiscal cliff are widely thought to be severe, likely pushing the US into another recession.
Reviewing the congressional votes that set up the fiscal cliff helps explain the ideological divides that impede the possibility of an agreement. The parties appear to remain far apart on the mix of tax increases (or, additional tax revenues) and spending cuts to entitlement programs that should be used to address the ballooning national debt.
Below we use Optimal Classification (OC) in R to plot the House and Senate votes on three important votes: extending all of the Bush-era tax rates through 2012, raising the debt ceiling, and extending the payroll tax cuts and unemployment through 2012.
During the 111th Lame Duck Congress in December 2010 — after the Republican wave in the 2010 midterm elections — Congress and President Obama negotiated a deal to extend all the expiring Bush-era tax rates through the end of 2012 as well as extending the payroll tax cuts and unemployment benefits. Many Congressional Democrats opposed the extension of the Bush tax cuts for the top income bracket. Indeed, House Democrats split 139-112 on the vote, narrowly supporting the bill. As can be seen in the plots below, Democratic opposition to the agreement — especially in the House — was concentrated among the most liberal members (with liberalism and conservatism measured by position along the first, ideological dimension shown in the plots). Senate Democrats were more likely than their counterparts in the House to support the agreement, although 13 Democrats (and independent Bernie Sanders (I-VT), who caucuses with the Democrats) voted “Nay.”
About six months later, over the summer of 2011, President Obama, the Republican-controlled House and the Democratic-controlled Senate sparred over raising the debt ceiling. Eventually, a deal was reached to increase the debt ceiling but cut federal spending and create a 12-member joint select “super committee” charged with reaching a bipartisan agreement to make more drastic reductions ($1.2 trillion over 10 years) in the national deficit. To spur an agreement, a trigger was added to the agreement to require automatic cuts (sequestration) in the same amount ($1.2 trillion) to defense and domestic spending if the super committee failed to develop a proposal. The super committee did fail, and sequestration now looms (for a plot of the ideological positions of members of the super committee, click here).
The August 2011 House and Senate votes that passed this agreement are discussed in more detail here, but the main plots are shown below. The divide in these votes occurred not on the first (liberal-conservative) dimension, but on the second dimension. We have suggested that the second dimension may have come to represent an “establishment/anti-establishment” continuum. Recall, for instance, the difficulties faced that Speaker John Boehner (R-OH) faced in corralling support for an agreement to raise the debt ceiling among the Tea Party-affiliated members of the House Republican caucus. Eventually, Tea Party Caucus members in the House split 32-27 in favor of the bill. On the left, opposition was more pronounced among members of the Progressive Caucus (who voted 14-57 against the bill). In both cases, opposition to the debt ceiling agreement was considerable and was concentrated primarily among those with low second dimension scores.
Finally, in February 2012 Congress extended the payroll tax cuts and unemployment benefits through the end of 2012. Those votes are detailed in a separate post. As can be seen in the plots below, opposition to this bill was concentrated among Congressional Republicans who wanted offsetting spending cuts. Accordingly, more conservative House and Senate Republicans were more likely to vote “Nay.” As with the vote to raise the debt ceiling, the second dimension is also important Here, again, the second dimension is important in modeling voting patterns, cross-cutting the Republican caucus between those low on the dimension (and more likely to oppose the bill) and those with high second dimension scores (more likely to support it).
Hence, there are both ideological and establishment/anti-establishment fault lines seen in these votes and at play in partisan wrangling over the fiscal cliff.