Yes, they really want to do this: cuts for cuts sake

Yes, they really want to do this

by digby

I don't think anyone considers Ezra Klein unconnected or hostile to the White House. So when he writes something like this, I assume they want it out there:

In my Bloomberg column today, I argue that the Obama administration is much more intent on reaching a deficit deal, and much less intent on making revenues a major part of it, than is commonly assumed. That’s led them to offer Republicans a deal that is not only much farther to the right than anyone had predicted, but also much farther to the right than most realize. In addition to the rise in the Medicare eligibility age and the cuts to Social Security and the minimal amount of revenues, it’d cut discretionary spending by $1.2 trillion, which is an absolutely massive attack on that category of spending.

This deal isn’t just a last-ditch effort to save the economy from the damage of a federal default. The White House would far prefer this deal to the McConnell plan, which would lift the debt ceiling without making any cuts at all. So why are administration officials so committed to striking a deal composed of policies they’ve mostly opposed? Here’s their thinking:

He goes on to say that they feel that if they can only get deficits "off the table" in a big way they will have the room to do other Big Things, that the only stimulus they can get is something small like extended unemployment insurance which is "better than nothing", we should want to have the Democratic President timing the massive cuts in this deal rather than grumpy Republicans in 2012 appropriations, it's good policy on the merits (really!) and finally, it will help Obama get re-elected, which is important because Mitt will make even deeper cuts.

To put all this slightly differently, White House officials believe a big deficit reduction deal would do them enough good, both politically and economically, that it’s worth making very significant compromises on the details of that deal. If you thought getting to $4 trillion in deficit reduction was a Republican goal, you’re wrong. It’s the White House’s goal, and the only reason it might not happen is Republicans won’t let them do it.

So it is as it appears to be. And not one element of it is even remotely compelling.

I still have a sneaking suspicion that the Republicans understand better than Obama that "the deficit" isn't what people care about and that hugely cutting spending won't help him be re-elected in 2012. (If they really believed that they would have done it themselves when they held the White House and the congress.) I think they'll sign on to a deal that massively cuts government spending and which only required concessions are something like Unemployment Insurance. Seriously, think about it.

Maybe they won't sign on out of sheer contrariness. In which case hurrah for them.

And they are threading a very fine needle on the electoral calculation. John Sides at the Monkey Cage games out the three scenarios:

Scenario #1: There is no deal.

Assume there is no deal and then assume, as Geithner and others have warned, that there are serious consequences for the economy when the debt ceiling isn’t raised. This will hurt Obama. And it will hurt him more than it will hurt the Republican Party. Presidents suffer the consequences of a bad economy. Divided government does not change this. Beware pundits who see silver linings for Obama in this scenario.

Scenario #2: There is a deal, but it hurts the economy.

Assume the Keynesians are right and the GOP and, for that matter, Obama are wrong. If so, fiscal austerity is only going to make the economy worse. Maybe not as bad as it would be if the debt ceiling weren’t raised, but still: worse. If so, Obama will suffer. End of story. It does not matter that the deficit will (in theory) go down. Election-year changes in the size of the national debt do not affect election outcomes. And it does not matter that a deal could make Obama appear “bipartisan.” Independent voters do not put political process ahead of the most tangible outcome: the economy. See also Matt Yglesias.

Scenario #3: A deal, with no effect on the economy.

Assume that there is some sort of deal, which in all likelihood will not be the grand bargain Ambinder mentions but some smaller deal built around the Biden talks. I will ignore for the moment what must then be negotiated in 2012. Assume that neither a 2011 deal nor any future deals affect the economy between now and November 2012. Then what? Let’s subdivide.

Scenario 3a: The economy is still weak throughout 2012, as some forecasts suggest. Obama will suffer. See Scenario #2. He may win, depending on the GOP nominee and the campaign itself, but it will not be easy. All the GOP has to do is hammer him on jobs, jobs, jobs and no one will remember his masterful bargaining over the debt ceiling, or what the debt ceiling is in the first place.

Scenario 3b: The economy does improve—somehow, someway. Now Obama has the edge, and the economy is what he should campaign on. Maybe it’s not morning in America, but election-year economic growth is a powerful elixir to myopic voters.

At this point, there is finally an advantage for Obama to a budget deal. The GOP nominee will need an issue to emphasize other than the economy. As Lynn Vavreck argues in The Message Matters, that issue must be one on which (1) the GOP nominee’s stance is closer to voters’ than is Obama’s and (2) Obama can’t easily weasel out of his position. By passing a budget deal, Obama will have made it harder for the GOP to use the budget and deficit as that issue. They may still try, but now Obama can take credit for cutting spending and the debt, all the while noting that many in the GOP sided with him.
That's a lot of hope there. And a lot of pain for real people on the off chance that the GOP attacks will be blunted.

So basically they really are still counting on Morning in America to magically appear in time and think that massively cutting government will ruin the Republicans' plans to complain.(Maybe that explains the Reagan comment yesterday.) The fact that they will also be selling deficit reduction as an economic elixir doesn't seem to bother them in the least. If you can't beat 'em, join 'em, I guess.

And Republicans have been running against Big Gummint/taxnspend liberals for as long as I can remember. A Democrat slashing spending won't stop them. And I know this because Bill Clinton declared that the era of Big Government was over and they impeached him for his trouble. The idea of Obama's campaign being based upon bragging that he has proved how much pain he can cause is rather nauseating.

My personal feeling is that it takes about 18 months for voters to feel the effects of a recovering economy and that window is rapidly closing. I think if they were less rigid about their re-election plan and able to adjust to current realities they might do things differently. But it's pretty clear that they've been counting on the Reagan Replay from the very beginning and changing circumstances just aren't going to sway them.

I can't cheer this even if the economy turns around and unemployment is way down by the time of the election. The level and type of spending cuts that the White House has already proposed is a betrayal of liberal ideology and economic reality to such a degree that I'm rooting for the McConnell proposal, which is just bizarre. But it's the most sane plan on the table.

(See this to understand just how deeply he is proposing to cut into vital services. This rationale just doesn't measure up in any way to the pain that this will cause and the danger we will all be living with in our daily lives as a result.)