What’s the Matter with the Supercommittee?

Nov 21 2011

That’s Right, I’m Calling You a Chicken.

With only three days left before the November 23rd midnight deadline, it looks increasingly likely that the Supercomittee will fail to put forth a proposal for the whole of Congress to vote on.  Some eyes are looking for an end-game miracle “Hail Mary” (or should that “Hail Murray”?), but most of the dialog seems to have degenerated into posturing for the expected game-day loss.  (Forgive the football metaphor, it’s Sunday.)

With real skin in the game for both Democrats and Republicans in the form of automatic cuts to beloved medicare and defense spending (respectively), why are the chances so slim for the Supercommitee to produce a deal?

The initial idea was that Congress as a whole would not bring themselves to do the dirty work of targeted spending cuts and revenue increases.  No Member wanted to risk being the subject of a campaign commercial accusing him of being the reason that Grandma can’t afford her medicine or why troops aren’t getting the equipment they need.  So the theory went that a smaller, bi-partisan committee, with a gun to their head, would be able to share the “blame” and make the hard choices that Congress as a whole could not.  The deal would then get an up or down vote in each chamber of Congress with no amendments and no filibuster (that’s the “super” part, by the way).  It seems like this approach would have a reasonable chance of producing a result, right?  So what happened?

Chicken.  That’s right, Chicken happened.  Recall that the supercommittee is a direct result of the debt ceiling crisis where both parties were playing a game of Chicken.  Chicken, as seen in “Rebel Without a Cause”, is a game where two players drive their cars at high speeds towards the edge of a cliff.  The first player to stop or bail out of the car is “chicken” and the other player wins the game and the respect of all of his teenage friends.  Needless to say, going over the cliff is the ultimate loss.  So Congress played Chicken with the debt ceiling in an effort to gain the respect of their metaphorical teenage friends and as a result, they created another game of Chicken in the form of the Supercommittee.

So how do you win a game of Chicken?  Easy: you have to convince the other player that you’re going to drive off the cliff no matter what.  And by what means to you accomplish this ruse?  Simple: act as crazy as possible.

During the debt ceiling crisis, the Republicans had everyone convinced, whether a ruse or not, that they would put the petal to the metal until they hit the bottom of the canyon.  Credit the tea party freshman with adding significantly to their credibility.  But before either player reached the cliff edge, they both agreed that they could save face by postponing the game to a later date with a few concessions handed out to the GOP (such as the floor debate and vote on the Balanced Budget Amendment).  This postponment agreement became the Supercommittee.

And so the game was recreated, except instead of US default, automatic spending cuts were substituted as the cliff.  At first the rhetoric did not indicate that Chicken was being played,  in that no Member of the committee was talking about the process.  But once each party released their initial plans, it was clear what was to become of the effort: Chicken.  This time, though, the Democrats would be the crazy ones: an initial plan to cut $5 trillion instead of the required $1.2 trillion, Obama and Democratic Members promising to hold Congress to the automatic cuts as agreed to, and the Democrats even leading on that the cuts to their beloved programs wouldn’t even be that bad (i.e. “My car has airbags”).  All this while Republicans are already talking about stopping the triggered cuts and submitting to possible revenue raisers (i.e. “I have flammable materials in my trunk”) .

The problem with Chicken is that there is no collaborative solution.  The equilibrium of the game is in fact a mixed strategy where you sometimes drive off the cliff, and sometimes bail.  But of course, with the stakes so high, and both players sharing the same car, you only get to drive off the cliff once.

So how do you really win a game of Chicken?  Don’t play, change the game.

 

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