If President Obama strikes a major debt deal, it will reshape the contours of the 2012 election at every level
If Congress passes something resembling the $3 trillion deficit-reduction deal that President Obama and John Boehner appear to be angling toward -- still a very big "if" at this point -- it could do quite a bit to shape the contours of the 2012 election at the presidential and congressional level, although more the latter than the former, I suspect. The biggest effect would be to improve the fortunes of incumbents in both parties. Right now, Congress is about as unpopular and unproductive as it's ever been, to the point that experts think there's an increased likelihood of another wave election.
A historic deficit-reduction deal would change that perception, even if -- as I assume will be the case -- it winds up being hugely controversial and opposed by Tea Party hardliners for not going far enough. In the end, they'll campaign on it: $3 trillion is a hefty cut and too great an accomplishment not to tout if you were elected to Congress on a promise to cut spending. (Besides, they're hardly immune to Washington hypocrisy.) And if, as expected, the deal includes reforms (cuts) to social insurance programs, it will blunt Republicans' vulnerability after they adopted the Ryan budget with its attempt to dismantle Medicare. Nancy Pelosi will have a much harder time regaining the Speaker's office.