Earlier today, Democrats utilized the nuclear option for the first time.  They pushed through the nomination of Mel Watt to head the Federal Housing Finance Agency (FHFA).  Now, one of the biggest supporters of affordable housing mandates will guard the hen house at Fannie Mae and Freddie Mac.  Additionally, Democrats pushed through the nomination of two more liberal judges to serve on the D.C. Circuit Court of Appeals, the second most important court in the country.

Instead of responding by shutting down all bipartisan deals on outstanding legislation (which are still subject to a filibuster), Rep. Paul Ryan, without any protest from leadership, handed Democrats the biggest legislative victory in months.  Let’s examine the ramifications of the deal:

• Under this agreement Congress would reinstate more than half the sequester for the next two years.  Budget caps would be set at $1.012 trillion in 2014 and $1.014 trillion in 2015; current law is $967 billion & $995 billion respectively.  It’s interesting how establishment Republicans argue that we can’t use the budget process to repeal Obamacare, but we evidently can use it to repeal the sequester.  Paul Ryan said tonight that he is forced to “deal with things the way they are.”  But that is not true.  The default position was that the sequester was the law of the land.  This will set a precedent to reverse that default, paving the road for future tax increases in order to offset the inevitable spending increase.
• The sequester was one of the few battles in which Republicans successfully overcame liberal demagoguery.  Obama tried to make the sequester as painful as possible by gratuitously shutting down popular services.  It didn’t work.  They claimed the economy would tank.  The economy actually got stronger.  Why would they throw this away?
• The most important outcome of this bill is the long-term effect on fighting Obamacare.  Rather than work out a one-year deal, Ryan essentially killed our leverage for the next two years.  So even if Obamacare becomes more catastrophic and the public rises up against it, we will not have any leverage to fight it in the budget process for next year.
• The spending offsets are a joke.  Most of them are very intangible.  The only thing definitive is an increase in airfare taxes to fund the TSA.
• Mitch McConnell is directly responsible for this.  He likes to say that he supports keeping the sequester, and indeed, he might vote against this deal, but he was the one who cued it up with his sabotage deal in October with Harry Reid.   Hence, McConnell will secure his optimal outcome – all budget confrontation will cease for two years, but he won’t have his fingerprints on the deal, enabling him to keep his legislative scorecard high enough to hoodwink conservatives.  Even as other leaders publicly supported the deal, McConnell said he would not be commenting on it tonight.  Remember, he is the GOP Senate Leader, and has obviously known about the deal for quite some time.
• And why would Republican leaders want to jettison all budget confrontation for two years?  As we noted yesterday, the only plausible explanation is that they want a clear lane to drive through an amnesty bill without fights over Obamacare moving their prized issue to the back burner.

House conservatives should push for a clean CR until Democrats agree to isolate funding for Obamacare by passing all 12 appropriations bills separately….the way the budget process is supposed to work.