Taking into account recent official data showing that the deficit has fallen precipitously, CAP calls for a mini-bargain, which would include both near-term spending on early childhood education, infrastructure, employment incentives and job training; and modest spending cuts and new tax revenues to pay down sequestration for three years. Crucially, CAP also calls for using revenues from January's fiscal cliff deal to reduce the overall magnitude of sequestration by over 50 percent as well.
Beyond the particulars, the report reflects a recognition by the liberal establishment that the White House and congressional Democrats have undertaken a flawed approach to achieving medium-term deficit reduction, and ought to abandon their strategy of horse trading tax increases for entitlement cuts with Republicans. Obama's most recent budget offer included a significant Social Security benefit cut. Republicans rejected it, suggesting they'd only be satisfied with more draconian cuts, but have refused to identify those cuts themselves.
Since then Obama's efforts to create a working group of Democrats and Republicans to round out the "grand bargain," and Democratic efforts to see the congressional budget process to conclusion, have fizzled.
"The pursuit of the grand bargain itself has had negative consequences," Linden said.