Sunday, July 28, 2013

By reframing national agenda, Obama hopes to "force a different result" in budget negotiations

When Obama came his speech urging a national refocus on jobs and the foundations of long-term economic growth last Wednesday, the first in a series on the economy, I suggested that he was positioning himself to win a budget showdown should the Republicans shut down the government or seriously threaten a debt ceiling default if he does not agree to radical new spending cuts or the defunding of Obamacare. He is trying preemptively to reframe the argument, to convince the public that jobs and investments that foster long-term economic growth should be the national priority -- not spending cuts,.

In a long interview with the Times' Jackie Calmes and Michael Shear, conducted while he was at Knox College in Galesburg, IL to deliver that speech, Obama continued his bid to shift the agenda:
NYT: [House Republicans] are still embracing sequestration and who are still willing to use the debt limit to go to the mat. 

MR. OBAMA: Well, this is what they say. On the other hand, we also have a number of very thoughtful and sensible Republicans over in the Senate who have said that we should not play brinksmanship, that we should come up with a long-term plan. I met with a couple of House Republicans over the last several weeks who would like to see that happen. They’re not the loudest voices in the room at the moment. 

And part of what I’d like to see over the next several weeks is, if we’re having a conversation that’s framed as how are we growing the economy, how are we strengthening the middle class, how are we putting people back to work, how are we making college more affordable, how are we bringing manufacturing back -- the answer to those questions I think force a different result than if we are constantly asking ourselves how can we cut the deficit more, faster, sooner.
Like refusing to negotiate over the debt ceiling, shifting the conversation to government action to foster long-term growth is a bid to correct past errors.  As Calmes and (or) Shear suggested, though they did not press the point, Obama was complicit in placing deficit reduction at the center of the national agenda -- notwithstanding that he always understood, and stated clearly in 2009, that controlling healthcare costs was the alpha and omega of long-term deficit reduction. In 2009, the administration's mantra was "healthcare reform is entitlement reform" -- and given that principle, the Affordable Care Act was its best shot at establishing long-term fiscal health. Four years later, Obama made the point in the Times interview:
Point number two, every economist will tell you that if we are being smart about growth and we’re thinking about jobs and we’re thinking about the middle class, but we’re also thinking about fiscal responsibility, then what we should be doing is making sure that the drop-off in government spending on vital things like education and infrastructure don’t go down too fast, and that rather we look at what the real problem is, which is long-term health care costs. 

Because of the Affordable Care Act and a lot of changes that are taking place out there among providers, we’re starting to see health care costs slow. That’s a positive. If we can build on that, then we can capture the same amount of savings that we’re capturing through the sequester and use those to make sure that we’re not cutting vital investments that I talked about today, and we can help middle-class families.
In between, however, he started talking about the nation tightening its belt like an overextended family in 2010, to Paul Krugman's eternal frustration, and embraced ten-year budgeting negotiations under threat of national default with Republicans who vowed relentlessly not to raise taxes as "a unique opportunity to do something big."  Now, to release the country from the sequestration strait jacket, he might have to be the one to trigger a government shutdown by refusing to sign appropriations that leave the sequester in place, as the Times reported he is considering.

Personally, I doubt he'll draw that hard a line. But he is laying elaborate groundwork for portraying continued obsession with spending cuts as counterproductive, hurtful to the middle class and the nation's long-term economic prospects.

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