The party that loses by winning

On July 4, 2011, when the Republicans were in the process of nailing Obama to the debt ceiling, David Brooks wrote:

If the Republican Party were a normal party, it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred billion dollars of revenue increases.

With about $4 trillion in deficit reduction over ten years the agreed target, Obama was ready to settle for just $800 billion in new revenue, a roughly 4-to-1 ratio of spending cuts to revenue . But the GOP passed up Brooks' 'deal of the century.' A four-fifths win for the no-new-taxes-ever crowd wasn't good enough for them.

They did "win," though, by forcing Obama to swallow, under threat of national default, the Budget Control Act, which purported to match every dollar of debt ceiling increase with a dollar of deficit reduction, with no concession on the Republicans' part that any of that reduction would come through tax increases. Nor has it, now that Republicans have learned to love the sequester, or professed to. The BCA imposed over $900+ billion in cuts to discretionary spending over ten years, and then another $1.2 trillion through sequestration if a Congressional supercommittee could not agree on a plan to replace that second tranche with a deficit reduction package of equal value. Since Republicans would not agree to any sequester replacement including new revenue, it is still with us, and the DBA's deficit reduction mix remains (approximately, counting interest savings), spending cuts $2.5 trillion, revenue 0.

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." 

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.

Intransigence got them the win. Intransigence keeps them from taking it.

Brian Beutler has an intricate and well-sourced account of how the Obama administration scopes out the task of creating a "permission structure" for Republicans to compromise on a budgetary grand bargain. Broadly, it's Gang of Six II, a new attempt to jump off the presidential shadow by staying in the shadows, averting what Ezra Klein called the paradox of power: "If you take a strong position, the other side will immediately take the opposite position."

So once again, as Beutler puts it, "Obama’s putative absence is key to creating the political space Senate Republicans need to negotiate in good faith." But the master hurdle is in the House, where the GOP majority is way more recalcitrant than the five-odd GOP senators who would be needed to get a bill through the Senate.  And there, Beutler's framing caught my eye, because it illustrates a second paradox:

Is there a displaced rational basis for blaming Obama?

Lots of smart political observers have been working hard in recent days to explain the odd phenomenon of centrist beltway types (Fournier, Ignatius, WaPo editorial staff) blaming Obama for not being able to induce Republicans to accept the kind of compromise or "balanced approach" to replacing the sequester that Obama has articulated ad infinitum and that the pundits in question themselves seek. That approach seeks a roughly equal mix of revenue increases (via tax loophole reduction) and spending cuts to replace the $1.2 trillion in automatic, across-the-board cuts in discretionary spending mandated by the sequester. Should such a balance be struck, spending cuts would still outnumber revenue hikes by about 2-to-1 in the sum of deficit reduction measures taken since 2011, not counting interest savings.

James Fallows calls the both-sides-are-to-blame schtick false equivalence.  Brendan Nyhan decries Green Lantern theory, the apparently ineradicable belief that the president can bend Congress to his will by force of rhetoric or personality or some more nebulous magical power.  Brian Beutler detects an Obama derangement syndrome -- a profound disappointment in Obama stemming from his apparent lack of power to stop the train wreck. Beutler does an excellent job demonstrating that David Ignatius in particular lambastes Obama for not making precisely the public argument in favor of a mix of tax hikes and spending cuts -- including cuts to Medicare and Social Security -- that Obama has been making nonstop for two years.

Fallows and others attribute this phenomenon to a rooted belief among establishment Beltway types that if compromise fails, both sides must be at fault. Beutler and Nyhan allude to misplaced faith -- disproved by political science research -- that the president can win a political fight by force of argument. Also, more generally, that presidential power should be able to overcome, because the president is...Father of us all?

I suspect that at least some of those who call on Obama to compromise more, or articulate better, or propose larger, "braver" entitlement cuts may be displacing anger over a disappointment in Obama that is more grounded in reality. Or perhaps I'm just speaking for myself here. Because I am angry at Obama.

No, Bob Woodward, the White House did not move the goalposts on the supercommittee's charge

Bob Woodward claims to have proof, in the form of statements by the principals, that the idea of using sequestration as an enforcement mechanism in the Budget Control Act of 2011 originated with the White House. That may be.*

Woodward also asserts that "the final deal reached between Vice President Biden and Senate Minority Leader Mitch McConnell (R-Ky.) in 2011 included an agreement that there would be no tax increases in the sequester." He provides no quotes in this article to back that statement up. If there was any such agreement, it was never put in writing and it is not reflected in the legislative language or in official descriptions of the deal immediately following its announcement.

A CBO statement put out on August 1, 2011, described the supercommittee's task as follows:

Create a Congressional Joint Select Committee on Deficit Reduction to propose further deficit reductions, with a stated goal of achieving at least $1.5 trillion in budgetary savings over 10 years

The BCA itself describes the supercommittee task as follows:

GOAL.—The goal of the joint committee  shall be to reduce the deficit by at least $1,500,000,000,000 over the period of fiscal years (Sect 401b, p. 52).

"Reduce the deficit" does not mean "by spending cuts only."

Publicly, from the moment the deal was announced, Republicans insisted that the supercommittee was tasked with considering cuts only, and Democrats insisted that new revenues would be part of the mix.  Announcing the deal on July 31, 2011, Obama said this of the supercommittee (my emphasis):

Obama and further deficit reduction

In response to Obama's reiteration during a pre-Super Bowl interview that he's seeking new revenue by curbing tax deductions for the wealthy, Andrew Sullivan reverts to favorite (though somewhat modified) mantras:

I’d love those loopholes to be closed. But that’s not real, serious revenue-raising tax reform. It’s old-school class demagoguery, not 2008 Obama honesty. If we are to control future debt, and to do so in part through ending tax deductions, we simply have to include the mortgage deduction, the state tax deduction, and the charity deduction – or find a way to cap those deductions past a certain income level. Nothing else comes close to making a difference. And yes, that means the middle class will get hurt a little. That’s what “additional revenue” in the amount required entails.

So less about the Cayman Islands and more about the sacrifices we need to make, please. I really hope the ACA reduces healthcare costs, but I don’t think it’s fiscally responsible to rely on experiments that may well yet fail. Baiting the super-rich is easy. Reducing the deficit responsibly is extremely hard – unless this president is prepared to be blunter and clearer than he was in this interview. And this, recall, is at the beginning of his second term, with maximal leverage at his disposal.

In the two years since Obama's 2011 SOTU, when Andrew called on Obama to make a crusade of deficit reduction, he has come a long way toward a liberal perspective on the budget -- acknowledging that the Tory austerity program in the UK has been a failure and at least partially recognizing, as here, that controlling healthcare costs is basically the whole of the U.S.'s long-term budget challenge.  But Sullivan still can't quite shake the notion that long-term budget planning calls for "sacrifice,", as if deficit reduction were some kind of war effort rather than a component of seeking the greatest prosperity for the greatest number.  And he misreads Obama more than one way here.

Three professors of false equivalence look at the Obama-Boehner faceoff

The Times' James B. Stewart today interviews three management gurus who think that "getting to yes" in a deficit reduction deal ought to be easy. These men presumably know a good deal about corporate negotiations. But their apparent ignorance of politics -- political dynamics generally, and the battles of the last two years in particular -- is breathtaking.

The three cited experts, William Ury of Harvard, Seth Freeman of Columbia's Stern School, and Daylian Cain of Yale,  collectively assert the following: both sides are taking and have taken maximalist, uncompromising positions; neither allows the other any face-saving outs; and they are not that far apart substantively. Prof. Cain suggests that spending time together socially could make a substantive difference.   All of these assumptions are wrong.

Progressive consensus and debt ceiling scenarios

Jared Bernstein has a post that crystallizes an emerging consensus on the left regarding our current budget battles:

• Medium-term deficit reduction (10-year horizon, per Simpson-Bowles etc.) is 2/3 done
  
• The last third requires hard bargaining but isn't brain surgery. Cf. Obama in Monday's presser:
  

  The consensus is we need about $4 trillion to stabilize our debt and our deficit, which means we need about $1.5 trillion more. The package that I offered to Speaker Boehner before we -- before the new year would achieve that. We were actually fairly close in terms of arriving at that number.

  
  So -- so if the goal is to make sure that we are being responsible about our debt and our deficit, if that’s the conversation we’re having, I’m happy to have that conversation. And by closing some additional loopholes through tax reform -- which Speaker Boehner has acknowledged can raise money in a sensible way -- and by doing some additional cuts, including making sure that we are reducing our health care spending, which is the main driver of our deficits, we can arrive at a package to get this thing done.

•  The key to our fiscal future is healthcare cost control. The best course on that front is watchful waiting to see how ACA reforms shake out (coupled, I would add on the basis of Obama's 2013 budget and December negotiations with Boehner, with moderate, incremental trims to provider payments and benefits to the wealthy).

Here's Bernstein's sum-up:

"Not this time": Obama revises himself

The headline takeaway from Obama's press conference yesterday is that he's talking tough about the debt ceiling. And indeed, he elaborated his case against holding the faith and credit of the nation hostage in new and forceful ways. What also struck me, though, is the extent to which Obama implicitly admitted that the obstacles he is now facing are partly of his own making. In fact, since late in his reelection campaign he has been casting is second term as an edited version of the first.

On the economic front, Obama reiterated three core messages yesterday:1) The debt ceiling is no frame within which to negotiate deficit reduction; 2) deficit reduction is not our chief problem; and 3) Republicans' chief goal is to weaken core government functions and commitments, radically altering the social contract. Each was to some degree a revision of a past stance.

Regarding the debt ceiling, as Ezra Klein pointed out yesterday, Obama has been unequivocal since the election: it is not a negotiating chip in budget battles.  Yesterday he stated this simply, forcefully and repeatedly.  Here is the first iteration, in his opening remarks:

Obama the centrist

It's been a while since I checked in on Obama's weekly address. This week, the headliner is another call on Congress not to play chicken with the debt ceiling -- though based on recent polling, he's going to have to do better to explain to the public that raising the debt ceiling does not authorize new spending (not withstanding that poll's limitations).  A few other tidbits caught my eye, though:

1) While Obama paired job growth and deficit reduction, his emphasis again was on deficit reduction. That's partly a function of his focus on looming budget battles, but he still positions himself as a centrist who cuts spending while investing in the future (infrastructure, education, energy). He also invoked the confidence fairy.

2) When talking about cutting spending while preserving essential investments, Obama does not emphasize preserving Medicare and Social Security.  It's no secret to anyone not in the grip of right-wing paranoia that Obama is open to entitlement reform (though his preferred means of Medicare savings would work by squeezing providers and reducing unnecessary care by ending away from fee-for-service payments). He not only aims to transfer wealth from the wealthy to the poor and middle classes, but also, to some degree,  from the (nonpoor) elderly to children, parents of children, and broadly, "the future", via infrastructure and R&D.

You want real deficit reduction? Try this...

Like most progressives, I've been pleased to witness Obama thus far refusing to negotiate with himself in the fiscal cliff battle. With his tax proposals and modest proposed spending cuts on the table -- a package derived from his 2013 budget -- it would seem to make sense to let Republicans detail the deeper entitlement cuts they say they want. As Paul Krugman highlights today, the Republican leadership seems unwilling to go on record proposing deep, substantive cuts to Medicare, Medicaid, and Social Security. So the progressive consensus is clear: let them put up or shut up.

Nonetheless, there remain calls among some Obama supporters -- e.g., natch, Andrew Sullivan -- for Obama to "seize the center" and propose more thoroughgoing plans to restrain long-term spending.  And there may in fact be political opportunity for him in doing so -- on his own terms.

Why does Obama let Romney get away with his "doubled the deficit" charge?

Obama did a lot of things right in the Hofstra debate. But one core Romney lie he let go unchallenged repeatedly. I go to my tweet tape:

@xpostfactoid1 

nailed him on everything but his own deficits

6:51 PM - 16 Oct 12 ·  Details

3x "he doubled the deficit" - time to pop that lie
6:56 PM - 16 Oct 12 · Details

he has cut the deficit - time to say so

6:57 PM - 16 Oct 12 · Details

unaswered: you doubled the deficit Lie
6:37 PM - 16 Oct 12 · Details

In fact, the deficit in FY 2009, compiled mainly on Bush's watch, was $1.4 trillion; this year it's just shy of $1.1 trillion. The only way Romney can get to Obama "doubling" it is to hold him responsible for 2009 -- as he's held him responsible for job losses that occurred prior to the stimulus taking effect (while holding himself harmless for job losses in the first year of his Massachusetts tenure -- see Romney Rule #2).

Obama contrasts two economic visions -- and fact- vs. fiction-based campaigning

The euphoria will last only until the next batch of crummy economic data -- or until the Supreme Court hands down its decision on the Affordable Care Act.  But having indulged in a mid-afternoon watch of Obama's  major economics speech in Cleveland, I can't help but feel for a moment that he just can't lose. 

The speech's basic structure was admirably simple: a contrast of two diametrically opposed economic prescriptions (I won't say "visions," because I don't believe that Romney believes in the policies he's selling).  That contrast included what I craved: the same kind of detailed dissection of Romney's economic plan that Obama leveled at the Ryan budget in April -- which feels like an age ago. Of course the contrast was wrapped in layers of context  : the Bush-era policies (which Romney wants to reprise) that led to crisis; the unfinished recovery he's led; and, as Obama has sketched out repeatedly since 2007, a contrast between the American tradition as he sees it -- of prudent public investment and shared prosperity -- and the GOP policies that have taken us off that path -- radical tax cuts and deregulation. 

Also key, though, was a second, unstated contrast: between truth-telling and lying.  Obama never called Romney a liar, and he never accused him of not believing in the extremist GOP economic prescriptions that in his narrative led the US to disaster [update: I kind of changed my mind on this as I cut and pasted below...].  But he emphasized the factual basis of his own analysis of the GOP budget -- and set that analysis against the phony tissue of Obama-myths with which Romney & co. are saturating the airwaves.  Watch the way he contrasts his own attack with the attack on him. My emphases, natch.

Gallup's scary polling on economic issues

As the economy goes, so goes the electorate's assessment of the President's ability to run the economy. That's the way it's always been, in all electorates. It's no good railing or making excuses. It's an electoral law of nature.

Nonetheless, two numbers in Gallup's current polling of American's economic assessment of the two candidates frighten and anger me. Voters give Romney the edge in handling deficit and debt, 54-39, and economic growth, 52-42. They give Obama the edge on other economic issue rated of high importance, including healthcare and college costs, and the candidates are virtually tied on jobs.   But the two on which Romney leads are the broadest economic fundamentals.

Pulping the bully approach to presidential leadership, cont.

Not for the first time, Ezra Klein laments the Obama administration's loss of control over the deficit debate from early 2011 to the present:

The problem the White House has on the deficits issue is that their coolness towards Simpson-Bowles lost them a lot of credibility on this issue. Most Americans may not know what they want to do about the deficit. But they tend to know they want to do something. And Simpson-Bowles, rightly or wrongly, became the symbol for doing something. When the Obama administration didn't follow up on it, and then Ryan and the Republicans were first out the door with a major deficit-reduction plan, it created the sense that, deep down, the White House didn't really want to do anything on deficits, that they were just doing the least necessary to check the box.

It may be true that Obama lost credibility on deficit reduction in 2011. But Klein is omitting a fact he was well aware of at the time: in early 2011, Obama faced a choice. He could "lead" by embracing Bowles-Simpson or some variant, prompting Republicans to excoriate it, and thus setting the stage for competing plans to frame the 2012 election -- or he could "lead" by actually cutting a deal with Republicans, which would require some caginess about his own position. That's because, as Klein is well aware and as Obama himself openly avowed, presidential advocacy polarizes.

Good riddance to Grand Bargain

As far as I can tell, the Washington Post's blow-by-blow of the disintegration of the "grand bargain" Obama was negotiating with House GOP leadership this summer does not change the basic outline of what we already know.  Obama was getting close to signing off on a horrendous deal with grossly insufficient new tax revenue; the Gang of Six rode in with the outline of legislation closer to the Bowles-Simpson mold than the deal in progress; many GOP senators made approving noises; the $1.5 trillion over ten years in new revenues called for by the Gang of Six outline highlighted the unpalatability of Obama's deal for Democrats; he tried to boost the headline revenue in his deal from $800 billion to $1.2 trillion; Boehner and Cantor recoiled; Obama retracted the new ask and expressed willingness to sign off on the prior deal contours, but Boehner left him at the altar.

The account, in my view, simply highlights old unaswerables:

Chait on the chess master, and one missing piece

On the "Fallows question" of whether Obama, in his 3-year combat with Republicans, has been more chess master or pawn, Jonathan Chait lays down an opening premise:

There’s a pattern in the way President Obama reacts to his opponents. He always begins with the outstretched hand, taking their goals (and complaints) at face value. But if they prove unwilling to meet halfway, he assails them for their intransigence and draws sharp lines.

That, however, is merely a statement of Obama's default strategy.  On the question of whether it worked (or is working) in the battle over deficit reduction, taxes, stimulus, and long-term spending priorities, Chait, like Fallows, takes a split decision. He thinks Obama was insane to pursue a "grand bargain" with Boehner, arguing that it should have been plain that there was no way that Congressional Republicans would move off their tax absolutism.  At the same time, he thinks that Obama has advanced his political ends in the broader battle:

What Republicans would like to believe about Obama's current strategy

Michael Gerson, while granting Obama grudging respect for the relative resiliency of his poll numbers in the face of of terrible economy, mis-casts his current political strategy:

Obama’s recent conversion to the old-time Democratic religion of class conflict — preached at Occupy Wall Street tent meetings — has rallied American liberalism. This approach has its limits. A message that shores up support from the left may complicate Obama’s appeal to independents. The construction of a 43 percent floor may also involve the construction of a ceiling not far above it. But Obama’s appeal to the political middle was no longer working. A base strategy was his only credible strategy, and it seems to have prevented a polling collapse.

Obama's current strategy -- highlighting his policy contrasts with Republicans, hammering them for resisting new taxes on the wealthy, pushing popular stimulus measures (by other names), and "balanced" deficit reduction  -- is aimed as much at "independents" -- or rather, at majorities much broader than the Democratic base -- as it is on shoring up that base.  As Greg Sargent says, Gerson is "just wrong about the Dems’ new populism being a “base” strategy."

Ezra Klein, what about that Paradox of Power?

It's not often that I feel impelled to dispute a conclusion with Ezra Klein, but today is one of those occasions.

Noting the irony inherent in the fact-set that a) Republicans continue to make sympathetic noises about the Bowles-Simpson plan, b) Obama has floated plans that are both less substantive and to the right of Bowles-Simpson, and c) Republicans reflexively reject -- nay, demonize -- anything with Obama's stamp on it, Klein makes a case that Obama should press "reset" and throw his weight behind the plan:

Either way, there’s no reason Democrats should be rejecting Simpson-Bowles on behalf of the Republicans. And, to be fair, that’s not all that’s going on here: The Obama administration doesn’t like the defense cuts or Social Security reforms in Simpson-Bowles, and they’re skeptical that the tax reform process could really generate as much revenue as the document promises. So their thinking was that they could work off of the Simpson-Bowles proposal and come out with something better.

That’s pretty much what they tried to do in April. But because that plan had Obama’s name on it, it was dismissed as a liberal nonstarter. Their strategy, in other words, was a huge failure, and over the past year, they’ve watched the deficit debate move far, far, far to the right.

Let's leave aside for the moment the question of whether Obama stands to gain now by embracing Bowles-Simpson.  I think Klein misconstrues the cause of Obama's "huge failure" in the spring and summer of this year. The failure lay not in the composition of his plan nor in his abstention from wholehearted advocacy of Bowles-Simpson.  It stemmed from his agreement to negotiate under the debt ceiling deadline, which he not only accepted but embraced as "a unique opportunity to do something big."