Note: a road map is in order. I first describe what happened tonight in the House of Representatives.  Then I discuss one game theoretic take on Boehner’s “pulling of `Plan B’…”

Tonight, the House of Representatives passed a rule, H.Res.841, that called for the consideration of two measures, HR 6684, and H.J.Res.66.  Both of these bills are illustrative in terms of how the House Republican leadership is dealing with the fiscal cliff “crisis bargaining” situation.  The rule passed the House by a vote of 219-197, with 13 Republicans voting against it and no Democrats voting in favor of it.

The first business brought up by John Boehner under the rule was HR 6684.  The bill, titled “Spending Reduction Act of 2012,” puts off the sequestrations (spending cuts) component of the fiscal cliff and makes some other cuts.  Aside from the sequestration aspect, the bill is a bit of a hodgepodge.  Some of the various items are potentially important and subtle, but beyond the scope of this post.

(As an aside, the CRS summary of HR 6684 describes the bill as containing this doozy:  “Amends the Congressional Budget Act of 1974 to authorize the chair of the Committee on the Budget of the House of Representatives or the Senate to make adjustments to any legislative measure to conform to the discretionary spending limits of this Act.”  I have a hard time seeing the Senate agreeing to that.)

HR 6684 was considered under a closed rule, with all points of order waived.  After an hour of debate, as specified in the rule, HR 6684 passed the House by a vote of 215-209, with 21 Republicans voting against it.  Note that 7 members did not vote (with Rob Bishop (R, UT) voting “present” and 6 other members not voting at all): the bill duly and properly passed…but just barely. (My friends at Voteview, as usual, provide a timely and interesting take on this vote.)

After this nailbiter, maybe Boehner headed out to have a cigarette and calm his nerves, leaving the House to consider and agree (in a nonunanimous but bipartisan way) to a conference report dealing with the 2013 Defense Appropriations bill and then suspended the rules to

1. Name the VA medical center in Spokane, Washington, the “Mann-Grandstaff Department of Veterans Affairs Medical Center” (which Scott Rigell (R, VA) bravely stood alone in opposing),
2. Designated the VA facility located at 9800 West Commercial Boulevard in Sunrise, Florida, as the “William ‘Bill’ Kling VA Clinic” (which was unanimous), and
3. Designate Mt. Andrea Lawrence. (which 6 Republicans and 1 Democrat opposed)..

The House then went into recess for 2 hours, during which Boehner met with his GOP colleagues behind closed doors.  He then issued this press statement:

“The House did not take up the tax measure today because it did not have sufficient support from our members to pass.  Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff.  The House has already passed legislation to stop all of the January 1 tax rate increases and replace the sequester with responsible spending cuts that will begin to address our nation’s crippling debt.  The Senate must now act.”

Now the game theory.  It is interesting to consider Boehner’s incentives (as well as those of GOP members as a whole) at this juncture.  As I wrote earlier, even if Boehner can reliably command/deliver the votes of a majority of the House, he nonetheless has a strategic incentive to appear to lack control of his caucus conference.  In addition, as I also pointed out earlier, some GOP members may have an incentive to appear to take a hard line.

As The Hill’s Russel Berman put it tonight, Boehner “argued that his fallback plan was the best the House could do in the absence of a broader deficit agreement with the president.” I now come to the point of this post: tonight’s vote was strategic.  The possibility of a vote on Plan B happening tonight was brought up voluntarily by Boehner. As is now obvious, he didn’t have to take this vote today. More importantly, he didn’t have to suggest that he would take this vote today. (Also, note that while Boehner may have spent the day twisting arms, counting votes, and trading horses, the consideration of “Plan B” began just in time for evening news on the east coast.)

So, maybe Boehner was surprised by the vote on HR 6684 and backtracked out of necessity.  Or, perhaps he knew/suspected that he didn’t have the votes for one or both bills.  By bringing up a vote and then canceling it (and by perhaps coincidentally doing it during the evening news), Boehner got a public spotlight on “Plan B” and, arguably, now made a point that, among some of his conference, even exempting millionaires from a tax cut is simply a bridge too far for his conference.

The “math of politics” here is a second-order application of Boehner’s incentive to appear to not have the ability to deliver votes.  That is, purposely staging a vote that will ultimately not happen can be a strategic response to (for example) Democrats labeling claims that Boehner “does not have the votes” a bluff.  (Here, a “second-order application” means applying knowledge of the first-order incentives to figure out what your incentives become once others realize your first order incentives.  See my link at the end of the post for a far better illustration of this.)

In game theory, there is an important distinction between what are called “costly signals” and “cheap talk messages.”  In a nutshell, cheap talk messages are like me telling you that I really think the Pittsburgh Steelers will win the 2013 Super Bowl and costly signals are like me betting $100 that they will. (And, sadly, no, I’m not betting the $100. Also, consider this point the next time you hear someone say “if I were a betting man…”)

From a game theoretic point of view, cheap talk messages can not credibly reveal certain types of information. For example, suppose that you’re in a watering hole on Carson St. before a Steelers game and, like everyone else in this watering hole, you want to impress everyone that you are truly the most confident/optimistic Steelers fan.  Well, if simply saying that you think the Steelers will win the Super Bowl would impress everyone in this way, then everyone else would say this, too.

On the other hand, if you bet $100 on the Steelers and some of those present aren’t as optimistic as you, then some or all of those people will not mimic you and accordingly not send as strong a signal as you do about your faith in the Steelers.  As a result, you will (or should) accordingly be viewed as a greater Steelers fan by your fellow patrons.

A similar analogy for what Boehner might have done tonight is as follows.  When I tell you that I love you and nobody else is around, that’s cheap talk.  When I tell you the same thing in front of thousands of people, that’s a costly signal.  It’s costly in the second case because the presumption is nobody likes to be rejected in public. So, when observers describe tonight as “a major defeat for Boehner that will give significant leverage to Obama in talks on a deal to prevent looming tax hikes and spending cuts,” say that Boehner “had hoped to demonstrate Republican unity by passing a bill through the House,” or conclude that “any bargaining power Boehner had with Obama — or hoped to have — is gone.  … What happened on the House floor tonight made a bad bargaining situation for Boehner that much worse,” my natural contrarianism leads me to pause.  Boehner set this situation up for himself.  Boehner knows how to count votes.  And, importantly, Boehner and the GOP had this “problem” before during the Boehner-Obama-Cantor “Grand Bargain” drama that eventually led to the fiscal cliff, and it is interesting to note that the last time, some pointed to whack-a-mole dynamic hiding in the failure of the Grand Bargain, with John Bresnahan, Jonathan Allen & Jake Sherman writing at the time that

Details of the potential “big deal” with President Barack Obama leaked before House members were briefed on the broad outlines of any agreement. “That was a huge problem,” acknowledged a top House Republican aide. “Boehner got way out in front of where he should have been. He pulled back because he had to do so.”

So, in conclusion, I agree with Chris Cillizza that tonight’s drama “was a gambit by Boehner designed to be a show of force to President Obama. This was Boehner putting himself out on a limb in hopes wavering members would follow him. This vote mattered to Boehner.”  Oh, yes, this vote mattered.  But I think it’s too early to conclude like he does, that Boehner “lost it.”  Good signaling games often have more than touch of irony.  Such is the case here.  In particular: losing can be better than winning but only if you do it in public and people think you don’t want to lose.

I leave you with this classic moment of game theory in film.