Given the asymmetrical advantages for the Democrats, a second Obama administration is in a good position to play hardball in any negotiations during the lame duck session of Congress, which will begin after the November election and is likely to run into early January of next year.  He might even allow the tax increases and budget cuts to come into force on January 1 if the Republicans in Congress refuse to budge on tax increases.  Some Republicans have expressed doubt that Obama would remain firm regarding the expiration of the Bush-era tax cuts.  After all, he ultimately gave in during the 2010 budget talks.  This time is different, however.  Obama would not have to run for reelection, so he would no longer need to fear the consequences of alienating middle class voters.  The Obama administration could also manage the budget cuts so as to minimize the pain they inflict at the outset.

Taking a hardline position would also aggravate a fault line within the Republican Party, a bonus for Democrats.  Staunch Tea Party anti-tax proponents would insist on no tax increases whatsoever in talks with the Obama administration, even if it meant accepting a Thelma and Louise outcome for the economy in the short run.  Pro-defense Republicans, however, would be willing to accept some tax increases as the price to pay for avoiding substantial defense cuts.  Obama could forge a minimum winning coalition with the latter group that would trim entitlements at the edges (e.g., increasing the eligibility age for Medicare to 67), but use substantial tax increases on families earning more than $250,000 per year as the main vehicle for achieving fiscal consolidation.  Intense fire from the defense sector and other private sector businesses dependent on government contracts would most likely break down the Tea Party lines.  The resulting compromise would force hundreds of Congressional Republicans to renege on Grover Nordquist’s no-tax pledge, which they had signed.  Democrats would have effectively defanged the tax issue.  A compromise that eliminates a significant share of the sequestrations would also restore a sufficient amount of domestic demand to stave off a severe downturn.  The end result would be game, set and match to Obama.

If Mitt Romney were to prevail on November 6, the outcome would be quite different.  Romney has given all indications that he intends to push Paul Ryan’s 2012 budget proposal as the centerpiece of his economic policy.  Passing the Ryan budget would be easier than first meets the eye, even if Senate Democratic leadership passes from the ineffectual Harry Reid to the pugnacious but effective Charles Schumer and the Democrats hold on to a majority in the Senate.  Ryan’s budget calls for a sizable drop in income tax rates, increased defense spending, large cuts in social programs, and the eventual conversion of Medicare for people currently younger than fifty-five into a voucher program.

Paul Ryan has carefully crafted his budget to avoid a filibuster by limiting its content to items that fall under the budget reconciliation procedures in the Senate, which only require a simple majority for passage.  Even if the Republicans fall short of capturing the Senate, all they will need is two or three wayward Democrats to reach a working majority.  In the past, both Bushes and Ronald Reagan had little trouble finding a handful of pliant Democrats in swing states who were willing to play ball.  Although the picking has become thinner as the country has become more ideologically polarized over the past few decades, Romney and Ryan are likely to meet with similar success.