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Failure to Reach a "Grand Bargain" on Debt Makes 2012 Harder for Obama

Sunday, 24 July 2011 07:16 By Steven Thomma, Truthout | News Analysis
Failure to Reach a Grand Bargain on Debt Makes 2012 Harder for Obama

President Barack Obama holds a town hall event at the University of Maryland in College Park, Md. on July 22, 2011. (Photo: Stephen Crowley / The New York Times)

Washington - Sometime this spring, President Barack Obama shifted course on the budget and started pursuing a "Big Deal" to dramatically curb runaway deficits. On Friday chances for that deal disappeared, and with it perhaps his last chance to fundamentally change the course of the 2012 elections.

Even a multitrillion-dollar package of spending cuts and tax increases would not have stopped the red ink. At best, the grand bargain being sought would have shaved about $4 trillion from deficits expected to total at least $8 trillion over the next 10 years.

But it could have changed the storyline of the nation's politics, if not its government. Obama would have been able to run for a second term claiming bipartisan success at fiscal restraint, a boast he hoped would help erase or at least blur the image of him as a tax and spend liberal.

Instead, the apparent failure of Obama and congressional leaders to reach a big deal likely means the stage is largely set for the pivotal 2012 elections. The two major parties are unable to agree on how much government people want and who should pay for it. Voters — who went for Obama and the Democrats in 2008 and for the Republicans in 2010 — will have to decide between two rival visions of government.

For Obama, who as the incumbent will be the centerpiece of the campaign, the big deal was something he came to cherish after first ignoring it.

In his budget proposal last February, Obama all but ignored pressure to propose deep cuts in government's looming deficits. His plan would have produced deficits totaling $8.5 trillion over 10 years.

While willing to negotiate long-term cuts in those deficits, he declined to propose specifics. As late as April, he rejected Republican demands that deep cuts in future deficits be tied to any increase in the debt ceiling this year.

Within weeks, though, he endorsed long-term deficit cuts tied to the increase in the debt ceiling. And he demanded that any deal be big.

"We have the opportunity to do something big and meaningful," he said in an essay written for USA Today.

House Speaker John Boehner, R-Ohio, agreed with the need to move on a grand scale to curb deficits. He even agreed this week to $800 billion in new tax revenues.

He balked, however, when Obama asked for another $400 billion in new tax revenues as a way of bringing taxes closer to the spending cut totals on the table. Republicans also faced other pressure not to compromise, at least not too much.

Conservative columnist George Will this week urged tea party activists to oppose a "splashy bargain involving big but hypothetical and nonbinding numbers" that would allow Obama to "run away from his record and run as a debt-reducing centrist." Tea partiers, Will urged, "must not help the incumbent achieve his objectives in the debt-ceiling dispute."

Whether the numbers were real or hypothetical, a sweeping budget pact likely would have helped Obama gain credibility with voters, especially the independents who are likely to decide the 2012 election — and the absence of one will make his re-election more difficult.

"Obama's pursuit of the big deal proved how important he thought such an accomplishment would be for the future of his presidency," said Steven Schier, a political scientist at Carleton College in Minnesota and author of books on budget politics

"He understood that a bipartisan solution would remove a big problem for the re-election campaign ... Now it looks like that will not happen. The whole issue of deficits and debt will be hanging over his head through the election. It's a big burden for him."

Obama wants points for at least trying to take trillions off the national credit card.

"I think this whole episode has indicated the degree to which at least a Democratic president has been willing to make some tough compromises," Obama said.

He also wants voters to blame Republicans. That may happen, particularly if he's able to convince independent voters that the Republicans blocked a big deal to protect the wealthy from paying higher taxes.

"They're more in the center," said Lee Miringoff, Director of the Marist Institute for Public Opinion at Marist College in New York, which conducts the McClatchy-Marist Poll.

"They're very concerned about the size of the debt. And they're not connected to the Republican agenda of no tax increases for the wealthy."

 

© 2011 McClatchy-Tribune Information Services

Truthout has licensed this content. It may not be reproduced by any other source and is not covered by our Creative Commons license.

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Failure to Reach a "Grand Bargain" on Debt Makes 2012 Harder for Obama

Sunday, 24 July 2011 07:16 By Steven Thomma, Truthout | News Analysis
Failure to Reach a Grand Bargain on Debt Makes 2012 Harder for Obama

President Barack Obama holds a town hall event at the University of Maryland in College Park, Md. on July 22, 2011. (Photo: Stephen Crowley / The New York Times)

Washington - Sometime this spring, President Barack Obama shifted course on the budget and started pursuing a "Big Deal" to dramatically curb runaway deficits. On Friday chances for that deal disappeared, and with it perhaps his last chance to fundamentally change the course of the 2012 elections.

Even a multitrillion-dollar package of spending cuts and tax increases would not have stopped the red ink. At best, the grand bargain being sought would have shaved about $4 trillion from deficits expected to total at least $8 trillion over the next 10 years.

But it could have changed the storyline of the nation's politics, if not its government. Obama would have been able to run for a second term claiming bipartisan success at fiscal restraint, a boast he hoped would help erase or at least blur the image of him as a tax and spend liberal.

Instead, the apparent failure of Obama and congressional leaders to reach a big deal likely means the stage is largely set for the pivotal 2012 elections. The two major parties are unable to agree on how much government people want and who should pay for it. Voters — who went for Obama and the Democrats in 2008 and for the Republicans in 2010 — will have to decide between two rival visions of government.

For Obama, who as the incumbent will be the centerpiece of the campaign, the big deal was something he came to cherish after first ignoring it.

In his budget proposal last February, Obama all but ignored pressure to propose deep cuts in government's looming deficits. His plan would have produced deficits totaling $8.5 trillion over 10 years.

While willing to negotiate long-term cuts in those deficits, he declined to propose specifics. As late as April, he rejected Republican demands that deep cuts in future deficits be tied to any increase in the debt ceiling this year.

Within weeks, though, he endorsed long-term deficit cuts tied to the increase in the debt ceiling. And he demanded that any deal be big.

"We have the opportunity to do something big and meaningful," he said in an essay written for USA Today.

House Speaker John Boehner, R-Ohio, agreed with the need to move on a grand scale to curb deficits. He even agreed this week to $800 billion in new tax revenues.

He balked, however, when Obama asked for another $400 billion in new tax revenues as a way of bringing taxes closer to the spending cut totals on the table. Republicans also faced other pressure not to compromise, at least not too much.

Conservative columnist George Will this week urged tea party activists to oppose a "splashy bargain involving big but hypothetical and nonbinding numbers" that would allow Obama to "run away from his record and run as a debt-reducing centrist." Tea partiers, Will urged, "must not help the incumbent achieve his objectives in the debt-ceiling dispute."

Whether the numbers were real or hypothetical, a sweeping budget pact likely would have helped Obama gain credibility with voters, especially the independents who are likely to decide the 2012 election — and the absence of one will make his re-election more difficult.

"Obama's pursuit of the big deal proved how important he thought such an accomplishment would be for the future of his presidency," said Steven Schier, a political scientist at Carleton College in Minnesota and author of books on budget politics

"He understood that a bipartisan solution would remove a big problem for the re-election campaign ... Now it looks like that will not happen. The whole issue of deficits and debt will be hanging over his head through the election. It's a big burden for him."

Obama wants points for at least trying to take trillions off the national credit card.

"I think this whole episode has indicated the degree to which at least a Democratic president has been willing to make some tough compromises," Obama said.

He also wants voters to blame Republicans. That may happen, particularly if he's able to convince independent voters that the Republicans blocked a big deal to protect the wealthy from paying higher taxes.

"They're more in the center," said Lee Miringoff, Director of the Marist Institute for Public Opinion at Marist College in New York, which conducts the McClatchy-Marist Poll.

"They're very concerned about the size of the debt. And they're not connected to the Republican agenda of no tax increases for the wealthy."

 

© 2011 McClatchy-Tribune Information Services

Truthout has licensed this content. It may not be reproduced by any other source and is not covered by our Creative Commons license.

Related Stories

Debt, Austerity and How to Fight Back
By Frances Fox Piven, Cornel West, The Nation | Op-Ed
End Trickle-Down Economics to Pay Off Debt
By John Horton, Robert Weiner, The Miami Herald | Op-Ed

Hide Comments

blog comments powered by Disqus