Grand Bargaining Moves To Process

by digby

Here's David Walker of the Peterson Foundation at the Fiscal Summit today:

WALKER: You touched on the remarks on the balance sheet. As a former controller, we are $11 trillion in the hole on the balance sheet and the problem's not the balance sheet. It is off balance sheet. $45 trillion in unfunded obligations. You mentioned in January about the need to achieve a Grand Bargain involving budget process, social security, taxes, health care reform. You're 110% right to do that. Question is, how do we do it?

Candidly, I think it takes an extraordinary process that engages the American people, provides for fast track consideration and with your leadership that can happen. But that's what it's going to take.

OBAMA: Okay. Well, I appreciate that. Again, when we distribute the notes coming out of the task forces, I want to make sure that people are responding both in terms of substance and in terms of process. Because we're going need both in order to make some progress on this.

Just so you know, whatever it is the administration desires, it's quite clear from that short Village Townhall today, that many of the players in this didn't get the "entitlement reform" means "health care reform" memo yet --- or the one that says there will not be some kind of process that will "fast track" the Grand Bargain. It wasn't just Walker, it was Kent Conrad and others who were pushing that.

As a reminder, here's what Obama said last January, which I wrote about at the time here:

"Our challenge is going to be identifying what works and putting more money into that, eliminating things that don’t work, and making things that we have more efficient. But I’m not suggesting, George, I want to be realistic here, not everything that we talked about during the campaign are we going to be able to do on the pace we had hoped," Obama told me in his first interview since arriving back in Washington, DC as president-elect.

I asked the president-elect, "At the end of the day, are you really talking about over the course of your presidency some kind of grand bargain? That you have tax reform, healthcare reform, entitlement reform including Social Security and Medicare, where everybody in the country is going to have to sacrifice something, accept change for the greater good?"

"Yes," Obama said.

"And when will that get done?" I asked.

"Well, right now, I’m focused on a pretty heavy lift, which is making sure we get that reinvestment and recovery package in place. But what you described is exactly what we’re going to have to do. What we have to do is to take a look at our structural deficit, how are we paying for government? What are we getting for it? And how do we make the system more efficient?"

"And eventually sacrifice from everyone?" I asked.

"Everybody’s going to have to give. Everybody’s going to have to have some skin in the game," Obama said.

Here's what EJ Dionne wrote at the time, after the liberal columnist meeting with Obama:

Obama's anti-ideological talk is not just a vehicle for progressive inclinations but the real deal. Obama regularly offers three telltale notions that will define his presidency -- if events allow him to define it himself: "sacrifice," "grand bargain" and "sustainability."

To listen to Obama and his budget director Peter Orszag is to hear a tale of long-term fiscal woe. The government may have to spend and cut taxes in a big way now, but in the long run, the federal budget is unsustainable.

That's where sacrifice kicks in. There will be signs of it in Obama's first budget, in his efforts to contain health-care costs and, down the road, in his call for entitlement reform and limits on carbon emissions. His camp is selling the idea that if he wants authority for new initiatives and new spending, Obama will have to prove his willingness to cut some programs and reform others.

The "grand bargain" they are talking about is a mix and match of boldness and prudence. It involves expansive government where necessary, balanced by tough management, unpopular cuts -- and, yes, eventually some tax increases. Everyone, they say, will have to give up something.

(Here's what I wrote about that at the time.)

Obviously, things have changed since he said that back on January 10th. This economy is cratering with no end in sight. I find it hard to fathom that they would believe "sacrifice" of retirement income is still the best way to frame this --- at least if they care about getting the economy back on track any time soon and maintaining their political coalition. (And obviously, one hopes they now know that they are dealing with an insane opposition that has no intention of playing.)

Unfortunately, nobody has told David Walker this Grand Bargain is no longer operative and from what I've heard all of them say just today, I don't think they told Huckleberry Graham and I don't think they told Steny Hoyer and Stephanie Herseth Sandlin and Kent Conrad either.

I have always believed that one of their very clever plans was to make "entitlement reform" all about health care. You could see that coming pretty clearly. The problem is that, like "bipartisanship" it takes two to tango. It's really neat that they are all saying that entitlement reform is really about health care reform, but David walker and the Blue Dogs and everybody else to the right of Maxine Waters thinks "entitlement" reform, where everybody's got to have some skin in the game, includes social security.

I hope they can finesse it. But I'm not going to shut up and assume they can because it's quite clear (and I have heard this from several sources,despite Robert Gibbs' evasions earlier) that unless some lefties had made some noise, they would have had the Pete Peterson Show at the White House today to showcase their fiscal responsibility bonfides --- and they would have announced a Social Security Summit.