A bit of fiscal filosophy before running up to NYC for meetings and TV tomorrow.

Rep Paul Ryan has described his budget as a “vision document.”  A very dark vision, IMHO.  But OK, I can see where instead of a more pragmatic set of ideas that might see the light of day, he’s laying out the sharply diminished government vision that he and Mitt Romney ran (and…um…lost on).

In this sense then, the President’s budget should perhaps be thought of as less visionary and more strategic.  It’s a budget that offers both sides some of what they want and what they don’t want—a compromise package that, in more normal times, could find its way into a debate that could lead somewhere useful.

Where would that be?  Away from fiscal cliffhangers every few months, away from years of mindless sequestration cuts, towards some near term jobs measures, some additional revenues, and a better budget path.  For that, the cost would be the much touted cuts to Medicare and Social Security (chained CPI), a very high cost by many progressives’ estimation.

I agree, but a number of points to consider.  First, assuming what we see for Medicare is much like what was in his last budget, those savings mostly come from delivery efficiencies that progressives should support, like letting Medicare use its market clout to bargain for lower drug prices.  There will likely be higher premium costs for wealthier recipients.  I’ll hold my fire here too until I see the income levels at which higher contributions kick in, but that doesn’t seem too odious either.

The chained CPI is, of course, a huge bone of contention.   My colleague Bob Greenstein has an interesting post on this today, in which he offers a strategic (that word again) analysis wherein we accept what he acknowledges is a policy with clear drawbacks–“the chained CPI probably does not more accurately measure inflation for the elderly; in fact, it may well be less accurate”—in exchange for a) a benefit increase for those most vulnerable to the shortcomings of the new index, and b) a budget agreement that stabilizes the debt by balancing revenue increases with spending cuts, “one that replaces sequestration and includes substantial revenue from scaling back wasteful, inefficient, or low-priority tax deductions, exclusions, and other tax expenditures.”

So here’s the tradeoff, as Bob sees it:

Progressives who strongly dislike the chained CPI proposal should consider whether there is any chance that congressional Republicans will agree to raise revenues by curbing tax expenditures without some significant entitlement changes.  And if (as I believe) there is no real chance, what’s preferable:  the chained CPI with protections for the very old and the poor, or measures such as converting Medicare to premium support, raising the Medicare eligibility age to 67 and risking having some 65- and 66-year-olds go uninsured, and cutting Medicaid deeply and making ours more of a two-tier health care system based on income?

If, as Bob and I see it, those are the dynamics in play, then the President’s budget is a strategic offer to advance the debate, given its cramped and conservative parameters.  He’s playing the hand he and his team believe they’ve been dealt, and they think they can maybe snag a few other, diverse players to join the hand.  Meanwhile, Paul Ryan is sitting at an empty card table in the corner of the room cheered on by a few Tea Partiers, espousing a vision that a solid majority of the nation has rejected.

Many progressives disagree, however, and see a very different set of dynamics in play.  In their view, we advance the causes of lasting retirement security, adequate revenue collection, and the protection of other social spending, without compromise, especially on social insurance.  That may be right, but that path is not clear to me, or more importantly, to the President.

Again, I say with not a trace of snark, progressives who disagree with the tradeoffs for which the President is making a play may be right.  I too have argued that I wouldn’t start out the negotiations where I hope to end them, especially not with this Congress.  This “come on, guys, we’re all grown-ups here so let’s cut the crap and hammer out a deal” stuff doesn’t work with these folks.

But the better question, one I suspect we can all agree on, is how the heck did we get stuck within these “cramped and conservative parameters” and how do we get out?!  There are no good paths forward on this budget debate (which is not the same as saying there are no good budgets, e.g., the CPC one).  Obama’s trying to find one that helps in ways noted above, though it’s unlikely he’ll get very far with it.

So, in the words of the great philosopher Donny Rumsfeld, when you can’t solve a problem, make it a bigger problem.  When it comes to good fiscal policy, we may well not be able to get there from here.  So we need to start from somewhere else.