Tuesday, July 30, 2013

Obama girds for nuclear budget war, cont.

So Obama has repackaged and linked two old proposals -- revenue-neutral corporate tax reform and a package of jobs stimulus measures. The tax reform would be revenue neutral over the long term, cutting rates and reducing loopholes, but would yield a one-shot revenue boost as the loopholes are closed, paying for teh short-term jobs measures.

This mini "grand bargain" is part of Obama's announced series of economic speeches and proposals.  The purpose, as I see it, is twofold. First, to shift the national agenda in the upcoming budget battles from deficit reduction to jobs (short-term stimulus and long-term investments). Second, to present Republicans with a series of manifestly reasonable programs and compromises to reject. That way, when they shut down the government or threaten national default because Obama won't agree to obscenely large spending cuts, he can say, "I offered to compromise six ways to Friday, but my opponents won't agree to anything but more spending cuts and more tax cuts." 

It's true, of course, as Steve Benen points out, that every presidential offer, every proffered combination of new stimulus, new targeted spending spending cuts and new revenue, is grist for a possible compromise with Senate Republicans who want a deal:
Of course, if recent trends are any indication, the White House no longer cares what Boehner's office is whining about on any given day. Rather, Obama apparently thinks the real action is in the Senate, where he thinks he can strike governing deals with Sen. John McCain (R-Ariz.) and his allies, that, at least in theory, isolate the House GOP and pressure the far-right House majority to do something.
"At least in theory"...but if the House proves impervious to pressure, overtures to McCain & co. help lay the blame where it belongs in the event of a crisis -- shutdown or default. If he can stand firm as Clinton did -- a big if -- the goal would be either post-crisis budgeting more on his terms, or a steep electoral price for the Republicans in 2014. Or both.

See also:
Is Obama preparing for nuclear budgetary war?

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