What Obama's Budget Does Achieve

     We already know what it doesn't do: make those who have believed he wants to destroy the New Deal all alone stop worrying.

     http://diaryofarepublicanhater.blogspot.com/2013/04/obama-proposes-chained-cpi.html

     http://diaryofarepublicanhater.blogspot.com/2013/04/naked-capitalism-commentators-obama-is.html

     Many feel he has gone a "bridge to far" at this point, no doubt. However, there is method in his madness, I believe. Here's what it does do. It makes it clear that it's the GOP who are the fly in the ointment. The public already sees the GOP as obstructionist and intransigent. This again really underscores it. And the criticism Obama is taking from some in the base strengthens this narrative.

     The WSJ called this move a "shift in strategy" to show the GOP the President's "serious" about deficit reduction:

     "The outreach to the GOP and shift in strategy is a gamble with no guarantee of success. The White House wants to show Republicans it is serious about reducing the deficit and will offer cuts in exchange for tax increases."

       See, I don't think this is the main point of this budget. It's not so much for the GOP's approval as to put them into a box. 

        http://online.wsj.com/article/SB10001424127887324050304578413421108874266.html?mod=WSJ_hps_LEFTTopStories

        As for chained CPI it comes down to whether this offer is an end point or a starting point. If the GOP rejects this deal as many inevitably will, does Obama let them pocket the cuts while demanding more? The White House is clear that this is not the case and I believe them.

       " One key question: Is this offer a starting point or an end point?"

      "Senior administration officials who briefed a number of us late yesterday repeatedly insisted that the White House will not move any further in the GOP’s direction if Republicans try to pocket the entitlement cuts while refusing to make any concessions. The officials say that without new revenues, no deal is possible."

      "The details of the deal are as follows. On the spending cut side, it contains Chained CPI for Social Security and means testing for Medicare, as well as $400 billion in provider-side Medicare cuts and a few hundred billion in other cuts. On the revenue and stimulus side, it calls for $580 billion in new revenues from closing loopholes enjoyed by the wealthy, as well as a modest $50 billion in infrastructure spending."

      "The administration officials insisted yesterday that Obama does not view Chained CPI as good policy. This is about demonstrating the White House’s willingness to reach a compromise in which both sides make concessions. And so, presuming that Republicans won’t accept this offer — even though Mitch McConnell and John Boehner themselvespreviously asked for the concessions in it — this is ultimately an effort to bring clarity to the debate, by illustrating that one side is willing to compromise to replace the sequester and reduce the deficit, and the other side simply isn’t."

       "As Brian Beutler puts it, the budget is a “final offer of good faith to Republicans in Congress, who’ve been demanding Obama propose and take ownership of entitlement cuts for years.”

     http://www.washingtonpost.com/blogs/plum-line/wp/2013/04/10/the-morning-plum-obama-makes-republicans-an-offer-they-will-refuse/

     I think the value of a "good faith" offer is it pushes the GOP to do something or show themselves to be the obstructionists they are. Again, on chained CPI. I return to what Laurence O'Donnell had said back in 2011 when the GOP was playing debt ceiling chicken. There is a difference between a political campaign and being a practitioner.  The Obama hating firebaggers were outraged and burned O'Donnell in effigy. 

     The lesser of two evils is still evil! they intoned piously. OK, it's good to know that someone considers themselves free from evil. 

     However, time would show O'Donnell right: Obama did play a pretty good hand of poker in that round which set up the Dems  well to raise taxes on the rich at the start of the year. 

      As far as chained CPI goes, I've argued that maybe it's optimum to have this admittedly unnecessary and unappealing policy if in exchange for avoiding permanent sequester levels of government,  new tax hikes on the rich, and even some more-mild-stimulus for the economy. 

     Now that's a judgment and the case could be made that maybe they're better off accepting the new, permanent lower levels of government spending, no new tax hikes on the rich, and no new mild stimulus spending in exchange for $600 billion dollars in Pentagon cuts and avoiding any entitlement cuts whatsoever. However, again, it's a judgment call. It isn't absolutely clear that the latter is preferable for the former. Arguably while Chained CPI is unpleasant, it won't by itself be the permanent drag on the economy of the permanent sequester. 

     Still, the trouble is that negotiations are also a poker game-O'Donnell's insight. Just because Obama offers chained CPI doesn't mean the final deal will have it, nor does it mean he wants it.He may well make the offer while hoping he may still not ultimately have to do it. 

      The obstruction of the GOP has so often played right into his hands. In 2011 he offered a Medicare age hike that hasn't been offered again and isn't in this current budget either. The Democrats-including such powerful Dems as Schumer and Pelosi-had offered letting the Bush tax cuts expire only on those with income over $1 million dollars. The GOP said no way. Now they've had to eat $450,000. 

     I think what Obama's offer hear does is what his Medicare offer and the Dems' $1 million offer in 2011 did: showed who's willing to work to get something done and who isn't. In both of these cases the offers got much less sweet for the GOP and it may be the same with this one. So no, I don't worry that Obama will offer more and more and more. 

      Early GOP responses to the offer. Unsurprisingly many have rebuffed it. Paul Ryan says "he fears" this is just the "status quo." Yeah, well guess what? It's what the American people voted for. 

      http://www.blogger.com/blogger.g?blogID=6480818427597300387#editor/target=post;postID=6462016296954624319

      Still he was careful to at least claim he wants to be "constructive"

       "But Ryan resisted going after Obama's proposal too aggressively before he has seen all the details. 

"The good news in all this, and I want to be constructive here, is at least we've got everybody putting a plan on the table," Ryan added. "We haven't had that for four years. So now the Senate has given us a budget. Don't like the budget. They don't like ours. That's fine. And at least the President, two months late, is putting his budget on the table. So now we're going to have to start looking for where the common ground exists."

       Boehner says he gives Obama "some credit" for including entitlement cuts in his proposal-though with the caveat that they shouldn't be "held hostage" to tax hikes. 

        http://www.huffingtonpost.com/2013/04/10/john-boehner-obama-budget_n_3052888.html

        The fact is that it's a long game. A politician rather than a campaigner has to play the whole board. However, between these more conciliatory words from some GOP bigwigs and the news that immigration reform and gun control are both going forward, you can see some progress in the right direction.