Destroying liberalism from within

Last summer, President Obama desperately attempted to forge a long-term deficit reduction deal with Congressional Republicans. The notion that he could get the House GOP to accept any remotely balanced agreement was preposterous and doomed from the start, but Obama responded to the increasingly obvious reality by reducing his demands of the Republicans to virtually nothing.

The Washington Post has a long narrative report about the negotiations between Obama and the House Republicans. The narrative frame of the Post’s account is that Obama blew the potential deal at the last minute. That’s a story that people close to Obama’s fired chief of staff, Bill Daley, have been peddling for a long time. But that conclusion is utterly belied by the facts in the Post’s own account. But let’s put that aside for now, because the facts in the Post’s account support a different and far more disturbing conclusion: Obama was even more desperate to cut a deal than previously believed — dangerously desperate, in fact.
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The obvious reality is that there never has been any way to get House Republicans to agree to a balanced deficit deal. Even the capitulation Obama offered — $800 billion in semi-imaginary revenue, all raised from the non-rich — was too much for them to agree to. Locking in that low level of revenue would have required huge cuts in spending, making a decent liberal vision of government impossible. The Post is making the case that there was a potential deal, and Obama blew it by failing to properly handle the easily-spooked Republican caucus. What the story actually shows is that Obama’s disastrous weakness in the summer of 2011 went further toward undermining liberalism than anybody previously knew.

White House officials said this week that the offer is still on the table.

The deal could have easily become a reality were it not for the troublesome appearance of the Gang of Six. And it could still become a reality. It says right there in black and white at the end of the article: “White House officials said this week that the offer is still on the table.” What’s more, despite the change in attitude from the President, who’s in election mode, from a conciliator to a fighter, there’s a signifying event coming at the end of the year that will force a number of these same choices to be negotiated again.

By January 1, 2013, the Bush tax cuts will expire, the payroll tax cut will expire, unemployment benefits will expire, the “doc fix” on Medicare reimbursement rates will expire, and the “trigger” of $1.2 trillion in across the board defense and discretionary spending cuts will be triggered. Taken together, this mass of deficit-reducing changes would wipe out the primary budget deficit, leaving mostly a deficit made up of financing for the national debt. Debt-to-GDP ratio will fall, the key number often cited for sustainability. Oh, and the debt limit will run out around this time as well, making it more of a forcing event.
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[T]hat’s where the groundwork of the grand bargain talks comes in. Democrats and Republicans in Washington are going to look for a substitute deficit package in the lame duck session, the point of the lowest ebb of political accountability, with members of Congress who will never face voters again participating, after America has elected a new Congress and possibly a new President. We know that deficit hawks of both parties are already making their plans on this substitute. It could include slashes to entitlement programs when they actually need to be increased to be adequate. It could include a raft of tax cuts even though they have done the brunt of the work on exploding the deficit, without the value of helping the economy. And what it will most surely not include, unless the work gets done today, is the perspective of those ordinary Americans who would rather not see their futures sacrificed for the betterment of the well-off in society.