Obama, The GOP And Fiscal Seriousness

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A simple question given divided government and the scale of the future fiscal imbalance: which party is prepared to compromise more? The GOP is arguing that their acquiescence to a relatively minor part of the fiscally ruinous Bush tax cuts – four years after they were supposed to be sunsetted – gives them the prize. But Obama’s new budget is in a different universe. He has already kept in place a large swathe of the Bush tax regime, but now has offered some serious, tangible cuts to entitlements, including the chained CPI. On top of his previous squeeze of Medicare and the cost-control provisions in the ACA, he’s open to means-testing more for wealthier Medicare recipients.

The rough balance of his new budget is 2 – 1 spending cuts to revenue increases. The howls from the left – has the Democratic party reverted to pre-Clinton brain-deadness so swiftly – confirm the constructive moderation. One reaction from the right, it seems to me, was so cynical, toxic and foul in its hypocrisy and bad faith … well it had to have happened in Washington. Even the Club for Growth was taken aback:

“Greg Walden doesn’t seriously oppose even the most modest of reforms to social security, right?” said Club for Growth President Chris Chocola in a statement. “With nearly $100 trillion in unfunded liabilities, the last thing Republicans should attack the Democrats for is for making the most minor reforms to our entitlement programs. If anything, President Obama nibbles around the edges of entitlement reform and doesn’t do anything to put entitlements on a permanently sustainable path.”

I have been arguing for Obama to bring forward this kind of budget for a while. Maybe his caution was justified – especially given how he has been lacerated for negotiating with himself in the past and because the GOP is so riddled with purism and partisanship (even after its electoral shellacking), the compromise always seems to be in one direction.

But I think the president has realized his sagging poll numbers on the economy (see above) are directly related to his seeming inability to get even the slightest fiscal compromise in the face of unsustainable long-term debt. He’s the president, after all. In the end, he was elected to get some kind of bargain done, before the debt compounds even further. He’s now taken a clear enough step that even Bill O’Reilly may have to concede that he is serious about entitlement reform – if only to make discretionary spending in any way feasible in the near future.

What Obama needs to do soon is go everywhere and explain his compromise and demand some give in return. Perhaps if gun regulation and immigration reform really do gain traction, some kind of momentum for a deal could emerge. It is entirely to Obama’s advantage if that happens. The Democrats? They’re too smug right now. Obama’s concessionary move is in actuality a shrewd one. Inertia isn’t – if the Dems want to appeal to the center of the country on the economy and its future.