After years of tacitly supporting President Obama’s elusive quest for a “grand bargain” with Republicans to reduce 10-year deficits, the liberal Center for American Progress — a White House-aligned think tank — thinks it’s time for the administration to give up the ghost.
To that end, they’ve released a new report encouraging law and policy makers to update their thinking about the relative imperatives of immediate job creation, and near- and longer-term deficit reduction; and to pursue a short-term strategy of investment and partially paying down sequestration.
“We think that we’ve learned that the last three years have shown if nothing else that there’s no way to get a big deal right now,” said Michael Linden, managing director for economic policy at CAP, at a reporter roundtable Thursday morning. “Republicans just simply aren’t — Republicans in Congress I should say — don’t seem willing to make the compromises necessary to achieve a large deal…. To that end we think that we should keep it small, keep it manageable. So we offer a plan that would replace the sequester for three years.”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.