When a Democratic President proposes to cut Social Security benefits, it surely counts as drama—especially when he does it up front, rather than at the end of a tortuous negotiation in which he has extracted some big concessions from the other side. No wonder the A.F.L.-C.I.O., Robert Reich, and the editors of the Nation are up in arms about what they see as a premature and self-defeating cave-in to the Republicans. “That’s exactly the problem,” Reich wrote other day. “The President throws things on the table before the Republicans have even sat down for dinner.”
The White House, of course, views things differently. As usual, the Washington Post’s Wonkblog has the scoop. According to a post by Ezra Klein and Evan Soltas, the President’s advisers see his gambit as a no-lose proposition. If it brings the Republicans to the table and leads to a “grand bargain” that embraces entitlement reform and tax increases, the President will achieve his big ambition of resolving the nation’s long-term fiscal crunch. And if it doesn’t work, what the heck? To quote Klein and Soltas: “it proves to the press and the public that Republican intransigence is what’s standing in the way of a grand bargain.”
You can see the attractions of this strategy to Obama’s brain trust, which isn’t exactly short on self-confidence. At best, it checkmates the Republicans. At worst, it gets a winning draw. Maybe that’s right: Obama is a dangerous fellow to underestimate. At the start of the year, I and others were skeptical about the fiscal-cliff agreement, which raised taxes by about six hundred billion dollars over ten years. But with the economy seemingly holding up despite the tax hike, and with the Republicans still fulminating over being forced to agree to any revenue increases at all, the deal isn’t looking quite so bad.
Clearly, though, the strategy of trying, once again, to engage with the Republicans has risks. Speaker Boehner’s immediate reaction was to say that if reforming entitlements is such a good idea, why doesn’t the President just go ahead and do it without demanding a quid pro quo? At this stage, any suggestion that Boehner and Mitch McConnell will sign onto the type of deal the President is offering looks like wishful thinking. As far as the G.O.P. leadership is concerned, the White House got its revenue increase in January, and, despite initially promising $2.50 in new spending cuts for every dollar in new revenues, he hasn’t delivered any real spending reductions. As a factual matter, this argument doesn’t really hold up. The new White House budget lays out $1.2 billion in savings from Medicare and other programs. But, as we were all reminded by Paul Ryan’s budget, not all G.O.P.ers live in a reality-based community. And, as of now, there doesn’t seem to be any prospect of the Party, especially the Party in the House, relenting.
Assuming it doesn’t, the political cost of the gambit on entitlements could be considerably higher than the White House is assuming. Although Democratic senators and congressman have gave been less vocal in their criticisms of the budget than liberal pundits, they share many of the same reservations. With the 2014 mid-term elections already looming in their minds, Democrats were treated on Wednesday to the sight of Representative Greg Walden, an Oregonian who chairs the National Republican Congressional Committee, accusing the President of laying out “a shocking attack on seniors.” Six months ago, the idea of trimming Social Security benefits by adopting a new inflation index and means-testing Medicare were G.O.P. ideas. Now that they’ve received Obama’s imprimatur, they may well feature prominently in Republican attack ads next year. It ain’t right, but that’s the way it is.
One possible White House response to this line of argument is: So what? The President’s job is to do what’s right for the country, not to get Democratic congressmen reëlected. And what the country needs are some limits on the growth of entitlement spending, so it doesn’t consume the federal budget over the coming decades, causing funding to shrivel up for things like education, infrastructure projects, and scientific research. This is a powerful argument, and one I’m sympathetic to. But the right economic strategy will only be enacted if the political strategy works, too—and that’s the issue. When you are dealing with today’s Republicans, is the best idea to try and cut deals with them, which was what Obama tried in 2011, or just keep pounding away at them for the next eighteen months and try to win the seventeen seats it would take to restore a Democratic majority in the House of Representatives?
At this stage, nobody in the White House will be too worried by the hostile reception afforded the budget, which they will have fully expected. In accordance with the President’s wishes, they pride themselves on playing a long game. Ultimately, they believe that they can override opposition on the left, and they are betting on the impact of the sequester to bring around the Republicans. During the coming months, as many federal agencies introduce layoffs and service cuts, and, particularly, as the Pentagon is forced to consider base closures and cancelling weapons projects, the political climate will change, the White House thinks, and Republicans will be ready to negotiate.
We shall see. My own hunch is that, in the fiscal-cliff deal and the sequester, we’ve already seen the last big fiscal-policy changes of this two-year political cycle. With the deficit coming down pretty rapidly in any case—according to the White House’s new estimates, it will be just 3.9 per cent of G.D.P. next year and 3.4 per cent in 2015—and with neither side eager to instigate another debt-ceiling crisis, much of the urgency has gone out of the situation. Unless something horrible happens to the economy, or the markets go haywire, I find it hard to see either party moving beyond the positions they’ve staked out. And that points to a continuing deadlock, although not one that presents an immediate threat of economic disaster. But what do I know? I’ve always been better at checkers than chess.
Original Article
Source: newyorker.com
Author: John Cassidy
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