Monday, September 19, 2011

Obama Raises the Stakes

Obama and the Democratic Party have been coy about their budgetary priorities for nearly two years. In 2010, they jointly punted the ball to the Simpson-Bowles bipartisan commission, only to ignore its proposals entirely when it came to proposing a budget of their own for 2011. When Republicans passed the Paul Ryan budget in April, with its radical restructuring of Medicare financing, a Democratic Senate couldn't be bothered passing a budget for the second straight year and Obama was content to merely make a speech deploring Republicans' readiness to break the terms of the American social contract without offering any specific counter-proposals. Then he used the negotiations with Republicans over raising the debt-ceiling as an occasion to play the role of the only reasonable guy in the room who'd bent over backwards to meet John Boehner more than halfway.  If you asked Obama what he was specifically proposing in private to Boehner, he wouldn't tell you.

Why the reticence of Democrats in general, and the president in particular, to put their budgetary cards on the table? Only three possible answers come to mind: (1) they don't really have the well-articulated priorities they need to chart a course for a bad economy with a ballooning public deficit; (2) they have well-defined priorities, but think they're better off keeping them to themselves because they’re unpopular; or (3) different Democrats have such different budgetary priorities that they know they can't hold their own collectively in a legislative contest with more unified Republicans.  Up until today, it was hard to say which answer was right.

With his new deficit reduction plan, Obama is finally speaking in his own budgetary voice and drawing lines in the sand that he’s prepared to guard with a presidential veto. At least that’s how anonymous White House aides are pitching the proposal. “‘What we were talking about with the speaker [in connection with raising the debt-ceiling] was designed to get majorities in the House and Senate,’ one administration official said. ‘This is the president’s vision’ (my emphasis).”  So that means answer (2) was probably the right one all along, although it's still possible, as per (3), that a substantial number of Senate Democrats won't stand behind Obama's budgetary priorities.

I have a hard time feigning surprise at the discovery that Obama favors raising taxes in the upper brackets to making substantial cuts in Medicare and Social Security benefits or forswearing additional stimulus spending. I submit that anybody who has been paying attention could have figured that out all along. But under present conditions, Obama's being forthright about his budgetary priorities is making Republican heads explode by raising the specter of effective marginal tax rates in the upper brackets at levels not seen since the 1970s.

So it’s hard to disagree with David Frum that Obama’s budgetary plan, along with a statement of his readiness to back it up with a presidential veto if it comes to that, extinguishes any well-founded hope of bipartisanship on budgetary matters.  You needn't agree with Frum that both Obama's plan and the Ryan budget are bad public policy to concede that they're each less about governing than about positioning the planners for a referendum on spectacularly different budgetary priorities in 2012:

“The President has raised the curtain on his deficit reduction plan. Now the issue between the two parties is squarely joined. On one side, the GOP, pledged to the Ryan plan, the most radical redefinition of government from the right since 1964. On the other side, the President, offering the sharpest left turn since Teddy Kennedy’s challenge to Jimmy Carter in 1980.”
I’d quibble with the bit about the sharpness of Obama’s left turn. He’s upholding traditional Democratic budgetary priorities. What’s changed is the opportunity cost, calculated in the currency of budgetary dollars and political capital, of acting on them under present economic and fiscal circumstances. But Frum’s surely right that Obama's suddenly doing his best to make the next election into an ideological barnburner.

How times have changed.  Just last spring Democrats were breathing a grateful sigh of relief because they thought that, by passing the Ryan budget, House Republicans had let them out of a tight political spot.  Republicans betting that voters were ready to contemplate radically reconfiguring the welfare state looked like it would enable Democrats to hold their own electorally merely by projecting a moderate disposition.  So we saw a lot Democrats conceding, with furrowed brows, that it was indeed time to commence a "national conversation" about the deficit that wouldn't end until after the next election.  Obama was the furrower-in-chief.

Now, one economic slowdown and one credit downgrade of American treasuries later, Obama has decided that he's obliged to take the other side of the Republican’s bet by promising to keep the welfare state substantially intact even if it means raising effective tax rates to pre-Reagan levels.  That's what liberals are supposed to say under the circumstances, so Obama's base is gratified that he's finally saying it out loud.  And that's what Republicans have always figured that's what Obama was saying under his breath, so they're happy to have their dark suspicions confirmed.

I’m not the guy to tell you how this will play out politically. But it looks to me that, ideologically, one side or the other is headed for a catastrophic defeat.

5 comments:

Anonymous said...

Sounds like Obama has taken James Carville's advice to "panic." He has decided to double down -- like he did with ObamaCare. Forget that we're in the middle of a recession -- let's raise taxes so we can keep spending money to pay for entitlements.

I have a feeling which side is heading for the catastophic defeat. Will that make liberals happy? I wonder. What good is "being right" if you lose the election and the electorate shifts again to the right.

I may not be the person to say how this will play out politically, but I have a feeling Obama's a one-termer.

Bernie said...

Maybe Obama has decided that, with unemployment at 9% he's going to be a one-termer in any case, so he might as well go done swinging.

Bernie said...

Make that "go DOWN swinging."

Mean Voter said...

It's always interesting at these moments to see who the supporters really are and who runs for cover. I shall pay very close attention over the next few weeks to see whether, in fact, Obama's base is cheering, or if they just want to hide under the blankets till the 2012 election is over.

Lone Wolf said...

My guess is that, after a week or two, you won't hear another word about Obama's proposal.