TPM Reader AD on Obama’s new fiscal gambit …
Since you’ve been posting about Obama’s fiscal straightjacket, I thought I’d give my take.
One notable thing about our president’s emphasis on budget deals is that the plays never change. People who pay attention know the delicate dance that is the president’s response to any kind of fiscal event: start out by dropping hints of a compromise that might or might not be an okay finishing point but is an abysmal starting point (hello, New York Times story about his budget proposal), admonish the GOP mildly about their priorities on taxes without going too far (e.g. Obama’s flaying of Ryan’s plan while Ryan was in the room a few years back, after which there was zero follow-up), insist on new taxes on the wealthy as a precursor to any deal, and then take it to the nation with a barnstorming series of speeches outside of the confines of Washington to build support for his plan. The pattern is happening again, of course, and it will continue until Obama is an ex-president. Also of note: it hasn’t had any success at all in bringing about Obama’s objectives.
What drives this? In a nutshell, I’d say the following principles are on the minds of decisionmakers in the Administration: there’s (1) the importance of getting a substantial deal to shore national finances up, which seems to be treated as self-evident among these folks. There’s (2) the importance of getting new revenues in the form of taxes on the wealthy, as a nod to egalitarian sentiments on the left and as a matter of politics it’s fairly popular. There’s (3) an ideological component: the Administration will chastise Republicans for their taxation and spending priorities, but not too much so as not to poison the well for a big deal (also, this makes the attacks limp and not very effective). (4) The Administration also sees importance in being seen as the leaders in getting a deal done, and in cultivating elite opinion to this effect. Also somewhere in there is the conviction (5) that getting bipartisan deals done is good for the country and important for its own sake, in order to foster national unity. The latter was, I think, largely why the Administration accepted the bummer of a tax deal they did in January.
I can understand all of this even if I don’t agree with all of it, but at this point, it’s only fair to point out that this combination of elements has been essentially a straightjacket for the Administration. Starting out with a compromise is poor political strategy, but (4) demands it due to the nature of the media and BipartisanThink, hence he offers chained CPI. Then again, because of (5) they can’t just go out and say that Republicans are completely unserious and would love to starve granny because they want a deal, which means pre-compromising to show how super-reasonable they are, thus bringing about (3). This takes care of public opinion. In terms of substance, (2) is what makes ultimately a big deal impossible, though Obama does seem to insist upon it, and doesn’t regard abandoning (1) as an option. But Obama’s principles and ambitions seem to ensure that he’ll never get this deal that he wants so much. To accomplish all these points, you’d probably need an LBJ-level of political genius to pull it off, and we’re fresh out of those.
The other major problem here is that, really, there’s no reason for his base to get excited about such a deal. If Obama were to slightly alter his approach–let’s say he pushed for a carbon tax rather than a small increase in marginal rates–then the equation changes. Progressives strongly favor a more progressive tax code as a component of fighting inequality, but a small increase of the rates, or capping deductions or what have you, simply isn’t much of a game-changer and it’s not going to overtake the left’s deep loathing for any Social Security cuts to make it more palatable. A strong carbon tax would be a game-changer, and would offer liberals some reason not to just walk away angrily. What’s more, while it would still be very difficult to get through Congress, what we’ve seen time and again is that Republicans are really only intransigent on increasing taxes for the wealthy, and are entirely nonchalant about lots of other taxes going up, such as the payroll tax. A carbon tax instead might or might not be a nonstarter if seriously offered, but why the hell not just try something different one of these times?
I don’t know the answer to that. I don’t even know why they’re so insistent on getting a deal in the first place–one suspects lingering effects of the spending attacks during the early days, or perhaps that Obama sees this as a legacy thing and isn’t ever going to give up on it, but I don’t know for sure. Surely, there are lots of other issues warranting more attention at the moment. But it’s simply bizarre to watch the Administration run the same playbook again and again, get no closer to their goals, and then just go again. Or maybe it isn’t. Maybe there’s no other path open given the vastly ambitious goals they have for this process. I admit to some measure of confusion about this.
