The Work-Around Strategy of the President’s Budget

April 5th, 2013 at 7:50 am

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…

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9 comments in reply to "The Work-Around Strategy of the President’s Budget"

  1. Th says:

    From a purely political standpoint, this is horrible news. 2010 should have awakened the Dems to the fact that SS/Medicare is still the 3rd rail. I don’t think I will go so far as to say Pelosi would still be speaker without the Medicare cuts in Obamacare, but it didn’t help. Voters didn’t know who they could count on to protect what was the Dems’ signature issue.

    With poll after poll showing that even the Republican base doesn’t want cuts, anything other than steadfastly standing against even talking about cuts gives away a clear competitive advantage in ’14 and ’16. We have the Republicans on record supporting privatization of Medicare and our strategy is to disarm? NO! Make a Norquistian pledge never to cut SS and Medicare and make it a national campaign. (I don’t care if this is irresponsible because you can’t do responsible things if you lose elections)

    I predict the 2016 Democratic nominee will be determined by how they react to this proposal. This is Clinton’s opening to bury Biden if she has the killer instinct. She should use her floor speech when the Bush administration wanted to pretend the SS Trust Fund didn’t exist as a template for her response.

    • urban legend says:

      It is the sheerest of sheer stupidity. Not only is it stupid from a policy standpoint to lower the most modest middle class incomes in a time when it’s a struggle to raise demand, but it is beyond stupid as politics. The only possible way Democrats can make headway in Congress in 2014 is with high turnout uncharacteristic of mid-term elections. The only possible way to get high turnout of the party’s core constituencies is by keeping the base — you know, the people who actually do the work of knocking on doors — in a state of high morale and energy. Nothing could possibly be better calculated to deflate the enthusiasm of the base than proposing to cut Social Security benefits. It’s just been done, however, and the damage may be unrepairable. The Democrats who snuck through in 2012 are toast, thanks to the Obama team.

      It seems clear that the Obama team from top to bottom cares not one whit for the success of the Democratic Party, and has given up on achieving anything worthwhile for the rest of their Presidency. No amount of vouching to the contrary by former insiders, some of whom unfortunately have been enablers of this policy and political stupidity, and no amount of “revenue increases” or other goals achieved as offsets to this most visible cave-in, can overcome this obvious demonstration that what Obama cares about is his post-Presidency legacy with the clueless opinion leaders in the Big Media and the Wall Street money machine.

      “Revenue increases”!! There’s a hell of a rallying cry for 2014. What a tragedy! “The only adult in the room” is even worse.

      • Procopius says:

        I’m thinking this will motivate a high turnout of the Democratic base in 2014 — to vote Republican. For the last two years Obama has been begging the Republicans to help him cut Social Security benefits, and for two years it’s been the Republicans who saved us. I haven’t voted for a Republican since 1964, but I think 2014 could be the year (depends how Debbie Stabenow votes on this issue).

  2. Fred Donaldson says:

    Lowering the living standard for the middle class is not statesmanship, when real corporate tax revenues are the lowest in recent history, and among the lowest in the world.

  3. SeattleAlex says:

    Amen Fred ^

    I hate this JB… how long until the R’s start cranking out the ‘Obama wants to cut your benefits’ ads?? Just like how they tried to twist the ACA into a medicare/benefits cut. Ughhh!!

    • urban legend says:

      If the Republican leadership plays it right, they will get Republicans in the potentially contested to come out against any cuts in Social Security. That will keep at bay any Democratic challengers with the slightest degree of association with the Social Security cutter, Barack Obama — who also happens to be the leader of the Democratic Party. Meanwhile, the only thing Republicans in safe districts need to worry about is Tea Party primary challengers. They can calibrate their response to the President’s proposal to choke off this danger without risking the general election.

  4. PeonInChief says:

    Given that the boomers have been prepaying their retirement for 30 years or so, we should call this what it really is–thieving. That it is also taking from the poor to give to the rich just makes it worse.

  5. CDW says:

    Social Security and Medicare should never ever be used as bargaining chips. Seniors are feeling like footballs being kicked from one end of the field to the other.

    I repeat SS and M should never ever be used as bargaining chips. Period.

    • Procopius says:

      I’m not persuaded these are bargaining chips. The explanations from “high White House sources” are totally unconvincing. Offering this, which the Republican leadership has said they want (the Republican leadership has demonstrated over and over that they DO NOT want this) just so you can show that they are unreasonable is stupid, stupid, stupid. Nobody who does not already see the Republicans as unreasonable is going to be convinced by another display. I believe the real motive is that Obama wants this so badly he will keep proposing it until eventually he wears the Republicans down to saying, “OK, since you want this so much, but we still won’t accept any revenue increases and you’ll have to pass this with Democrat votes because most of our caucus won’t vote for it.” And then they will destroy the Democrats in 2014.