Getting ready to talk jobs on CNBC so just a brief note on the big news out this AM on the President’s budget, due on next week.
President Obama next week will take the political risk of formally proposing cuts to Social Security and Medicare in his annual budget in an effort to demonstrate his willingness to compromise with Republicans and revive prospects for a long-term deficit-reduction deal, administration officials say…
[His budget] will embody the final compromise offer that he made to Speaker John A. Boehner late last year, before Mr. Boehner abandoned negotiations in opposition to the president’s demand for higher taxes from wealthy individuals and some corporations.
That offer included the chained CPI, applied to both Social Security (ergo the cuts to benefits noted above) and the tax code (thus adding over $100 billion in revenues over 10 years) along with new cuts to discretionary spending, so this is pretty different then what I hoped to see. Still, as I stressed, the Times piece reports that the WH won’t budge on the spending cuts without new revenues (mostly from the 28% deduction cap on high income households). BTW, I’ve been waiting to learn about the the payfor for the preK program–it’s a tax on cigarettes.
There are two ways of looking at the strategy here. The one that I see most clearly is that they’re once again starting the negotiations on their opponents’ side of the field. But there’s another way to see it that’s more inside baseball: they know they’ll never get anywhere with the R’s leadership–Boehner in particular can’t deliver the troops, and McConnell is in a similar boat in the Senate. So this looks like a strategy that says, “let’s go around the R’s leadership and pick off reasonable R’s, especially in the Senate. If we get enough of them, we ought to be able to bring along reluctant D’s who don’t like the entitlement cuts but are willing to compromise.”
OK…let’s see what happens. But I still worry that they’re beginning the negotiations where they want them to end, and that’s a risky strategy. On the other hand, if the R’s continue to stonewall on new revenues, which is extremely likely, this ain’t going anywhere anyway.
More to come…