The Flaw in the President's Budget Plan

Obama’s Master Budget Strategy Has One Huge FlawBy Jonathan Chait 0 16



                                             One thing that came through in a briefing yesterday with senior Obama administration officials is that, whatever their view of the likelihood of striking a Grand Bargain with Republicans on the budget, Obama really sees this as the political keystone to his second term.



As a piece of political analysis, I think Obama is correct about this. Substantively, the budget deficit is not unimportant but certainly far less important than nearly everybody says. But the perception is pretty well set by now. And the public perception has remained firm for the entire Obama presidency that runaway budget deficits and excessive spending are crises. It’s not just conservatives who think this – 96 percent of Obama’s own voters consider the deficit a problem. What’s more, the mere fact of controlling the deficit probably won’t dent this perception. The deficit is falling very rapidly, but 90 percent of voters believe otherwise.



The only way to turn around this perception is to strike some kind of Grand Bargain. That would provide Obama with the dramatic tableau he needs — a Rose Garden ceremony with members of both parties and swooning praise from the legions of commentators who have spent his presidency lambasting him for failing to reduce the deficit. As a political objective, if not necessarily as a policy objective, the Grand Bargain makes perfect sense for Obama. It could clear away the political black cloud that has hung over his entire presidency.



But here is the problem: Republicans surely grasp this as well. They don’t want to clear away the black cloud hanging over Obama’s presidency. That black cloud is the only thing they have going for them. The recovery, while slow, is likely to churn along through 2014 and probably 2016. Obama has conducted his foreign policy in a popular way, has generally owned the center on social issues, and, thus far, escaped even the slightest whiff of scandal. For Republicans to stand beside Obama and announce that they have solved the “deficit crisis” would retroactively legitimize the entire Obama presidency. The hated stimulus, Obamacare — all of it could now be justified to skeptical centrist voters as necessary steps to achieve popular goals.



You can see this calculation played out in Paul Ryan’s dismissive response to Obama’s budget. When Obama first tried to strike a Grand Bargain with Republicans, in 2011, John Boehner wanted to cut a deal. But Paul Ryan helped persuade Eric Cantor to nix it, because it would help Obama win reelection:



Mr. Ryan’s enormous influence was apparent last summer when Representative Eric Cantor, the second most powerful House Republican, told Mr. Obama during negotiations over an attempted bipartisan “grand bargain” that Mr. Ryan disliked its policy and was concerned that a deal would pave the way for Mr. Obama’s easy reelection, according to a Democrat and a Republican who were briefed on the conversation.



Obama has expressed his hope that putting his election behind him would change the GOP’s calculus. It changes it a little, but not that much. Republicans still want to win control of the Senate in 2014 and take back the presidency in 2016. And Republicans may express their position in the popular language of deficit reduction, but they also have a fundamentally different vision of the role of government. The Ryan budget is a plan to privatize retirement programs, protect the makers from the takers, and restore access to medical care as something you earn rather than a basic entitlement.



Republicans need the perception of a deficit crisis to persuade Americans that this is necessary. I don’t mean to make their calculation sound unduly cynical. Ryan genuinely believes that the ethos of the New Deal inherently leads to the kind of moral and fiscal collapse that Ayn Rand warned of. An Obama-style solution to increase revenue and trim spending without altering the basic role of the state merely obscures and delays what he is certain is a deep and incurable rot. A Grand Bargain is just about the worst thing that could happen to Paul Ryan.



A “longtime White House aide” explains to Politico why Obama is eager to settle the deficit issue now, when he can have a say over its terms: “We’re not going to have the White House forever, folks. If [Obama] doesn’t do this, Paul Ryan is going to do it for us in a few years.” By “it,” they mean reducing the deficit, but in a Ryan-esque way that hammers the poor and spares the rich.



That is probably true. This is also the flaw in their plan. Their goal of foreclosing the possibility of Paul Ryan imposing his vision upon America requires the assent of Paul Ryan.