Is Obama’s Budget Gamble Thawing the GOP?

Stacy Kaper

President Obama’s decision to include in his budget proposal cuts to Social Security and Medicare—two entitlement programs central to the Democratic base—has set off a fierce debate in Washington about whether the White House strategy will prove to be shrewd or a giant mistake.

The gamble could earn Obama credit for daring to take steps to advance a historic fiscal compromise and proving to Republicans that he is willing to keep his word by laying out entitlement reforms. But it could also weaken Democrats’ leverage in negotiations, prematurely conceding ideological points inconsistent with party orthodoxy, and hand Republicans an opening to treat the president’s offer as a starting point for broader concessions.

The moves to include chained CPI, which would alter cost-of-living calculations to slow the rate at which Social Security benefits increase, and to trim $400 billion in health care entitlement programs, have enraged the Left.

“This is the biggest mistake of his presidency—politically, morally, and economically,” said former Rep. Barney Frank, D-Mass., in an interview with National Journal Daily.

The White House thinking appears to be that Obama was going to be criticized either way for a proposing a budget that had no chance of becoming law. There was no denying proposals previously offered and recently reiterated were still on the table. The administration is arguing in its defense that the budget proposal is a compromise that is tied to closing tax loopholes and designed to reach a “grand bargain,” not serve as an à la carte menu for Republicans to pick apart. Special protections are intended to safeguard the most vulnerable. And of course Democrats have cover by pointing to their own plan.

But a significant number of Democrats in Congress are voicing their opposition, fueled by strong criticism from outside groups such as the AFL-CIO, AARP, and, and arguing that they are not hearing any reassurances from the administration.

Many of those groups gathered Tuesday to give loud voice to their unhappiness at a rally outside the White House before they delivered several boxes they said contained petitions with 2 million signatures objecting to the threatened benefit cuts. Jim Dean, chairman of Democracy for America, drew cheers when he called the proposal “shameful.” He added, “I am here to say that any Democrat that wants to go along with a proposal like this can look forward to a primary in 2014.” Sen. Bernie Sanders, I-Vt., also warned that Democrats who back Obama on this “may well not be returning to Washington.”

Still, the decision to include proposals Obama has already offered in recent fiscal negotiations, such as chained CPI, is winning quiet praise from some Republicans and scoring points with budget wonks forever hopeful that Democrats and Republicans will manage to broker a fiscal breakthrough that addresses long-term budget strains.

As Obama prepares to dine with a dozen Republican senators privately Wednesday evening, there were signs that he is at least earning goodwill for upholding offers he has previously made, despite Republican leaders declaring his plan a nonstarter last week for including revenue raisers.

“I respect Barack Obama for making the proposal,” said Sen. Mike Johanns, R-Neb., who acknowledged Obama “is getting beat up by people in his party.”

“I don’t believe the budget proposal went far enough and I don’t understand the timing at all, but having said that, I respect him for taking a stand on something that is controversial,” he added.

Sen. Saxby Chambliss, R-Ga., called it a positive step.

“When we met with the president a couple weeks ago, he said, ‘Look, I’m willing to take on reductions in entitlements,’ and he had the opportunity to prove it or walk away from it, and he’s at least stepped forward and done something, so, it’s a good start,” he said.

Sen. John McCain, R-Ariz., who has also met with Obama in recent weeks, offered similar praise.

“It is a very significant step forward, and I think it is movement toward compromise,” he said.

A devil’s-advocate argument is that Obama is looking out for the next Democratic presidential candidate by trying to cast the party as the more reasonable of the two on fiscal issues.

“He can think about creating a calculus where the attainable middle of the electorate looks at the two sides and says the president is trying to solve what I believe is a serious long-term problem that could potentially impinge on U.S. prosperity for decades into the future,” said Joe Minarik, a senior vice president at the Committee for Economic Development, who served as a budget official in the Clinton administration. “Republicans are off on the extreme and refuse even to talk.”