President Obama’s deficit speech may be viewed as the moment the Obama administration fully pivots away from trying to reach bipartisan compromise, to instead focusing on winning 2012 by bashing the Republican Party.
The first half of President Obama’s first term was marked by an obsession with reaching bipartisan compromise. Obama wasted an absurd amount of time trying to get bipartisan agreement for a health care bill, even after the effort was clearly hopeless. The President also tried repeatedly to get the GOP to sign on to a Grand Bargain on the deficit. He tried to do it using the Simpson-Bowles committee, then the Biden talks, and finally his direct negotiations with Speaker John Boehner over the debt ceiling deal. Not only did the attempts fail to produce the compromise Obama wanted, but trying and failing to reach compromise hurt Obama politically by making him look weak and ineffective.
The deficit plan Obama laid out is different from his past starting positions. It wasn’t a foolish attempt to possibly please the few remaining moderate Congressional Republicans, it was designed to win over the public. If you leave out the $1.1 trillion from the troop drawdowns and the $430
trillion billion in reduced interest payments that make the plan look bigger, it is effectively 50/50 cuts and new revenue: $1.5 trillion from tax reform and $1.78 trillion in spending cuts/increased efficiency. This is both more total new tax revenue and a greater percentage of revenue than any past plan Obama directly or indirectly hinted at supporting.
The new tax revenue comes from the popular idea of taxing the rich. The plan included the smart political phrases of the “Buffet Rule” and a new tax on those who earn more than a million a year, an emotionally pleasing round number that no one can argue doesn’t qualify as very rich. These ideas were more about polling testing than the best way to get revenue.
Even the veto threat in the speech, about not cutting Medicare benefits without tax increases on the rich, felt less about honestly trying to get the GOP to agree to taxes and more about advancing the narrative that the Republicans are totally inflexible.
In both tone and substance this speech was very much geared to the 2012 election. It was the first time Obama spoke about deficit reduction that felt as though his main goal was to simply make the obstructionist GOP look really bad, instead of preparing his base to accept major cuts to popular programs, or marginalizing his progressive critics.
While I think Obama still honestly wants a “Grand Bargain” so he can cut entitlements, this speech felt as though he has either given up hope that the GOP will ever give him that “victory,” or he realized that with his approval rating in the low 40s he can’t afford to endorse cuts to popular programs.