Obama pulls a trigger -- and takes two hostages

After the deal that become the Budget Control Act was announced on July 31, I repeatedly voiced the fear that Obama would go wobbly on the $600 billion in defense cuts that would allegedly be triggered if the supercommittee failed:

My fear is that Obama will once again turn the trigger on himself -- in this case, the large (if back-loaded and ultimately unenforceable) defense cuts that go into effect automatically if the supercommittee can't agree on a package. Would any president really suffer the defense budget to be cut by fiat, even notionally?  Not this president, I fear.  Look again at his rationale for not squeezing another trigger last December -- the scheduled expiration of the Bush tax cuts:

And the reason is because this is a very unique circumstance. This is a situation in which tens of millions of people would be directly damaged and immediately damaged, and at a time when the economy is just about to recover.

A mandated $750 billion reduction in projected defense spending over ten years is also "a unique circumstance." I can just hear it: "I cannot allow the security of the United States to be compromised..."

Wrong!  While Panetta forms a contrapuntal-but-harmonious* chorus warning that the "sequestered" cuts would "tear a seam in the nation's defense," Obama has declared that he's perfectly ready to let those cuts go forward if Congress does not replace the automatic cuts with a "balanced" plan for equivalent or greater reduction. That's a two-fer: he is trying to make Republicans feel the brunt of the pressure to avoid a) the sequestered defense cuts and b) the expiration of all the Bush tax cuts. Now his own counterproposal comes into play: $1.5 trillion in new revenue combined with a very different package of cuts, including to Medicare. That, incidentally, should put paid to the "lack of leadership" charges: he has set the parameters, and can afford to wait until the GOP begins to approach them.  He has exposed the Nov. 23 deadline as an illusion; the only deadlines that matter are November 6, 2012, and December 31, 2012.

Question now: if Republicans hold the Norquist Line on taxes, will Obama let all the Bush tax cuts expire? And if Republicans deal, will Obama hold out for an adequate amount of new revenue -- say, the $1.5 trillion over ten years outlined in his September plan -- or settle for the measly $800 billion he was headed for in the busted deal with Boehner, or worse?

After listening to Obama last night, I'm more sanguine than I've been for a long time.  He sprang a masterful trap on multiple levels. Maybe he really is playing multidimensional chess. More on his statement later.

*Panetta's warning was in sync with Obama's statement. The Defense Secretary "said he backed Obama's "call for Congress to avoid an easy way out of this crisis. Congress cannot simply turn off the sequester mechanism, but instead must pass deficit reduction at least equal to the $1.2 trillion it was charged to pass." Obama said last night, "We need to keep the pressure up to compromise -- not turn off the pressure. The only way these spending cuts will not take place is if Congress gets back to work and agrees on a balanced plan to reduce the deficit by at least $1.2 trillion. That's exactly what they need to do. That's the job they promised to do. And they've still got a year to figure it out."