WASH POST GREG SARGENT
Politico has a big reported story that claims Obama is searching for a grand bargain involving entitlements and new revenues because he “has no choice.” The basic idea is that, by refusing to deal on the sequester, Republicans have boxed Obama into a position where he must come to the table with entitlement cuts, or be stuck with the sequester cuts.
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I don’t know how to be any clearer than this, but here goes: Entitlement reforms are on the table. The President’s offer includes Chained CPI for Social Security and means testing for Medicare has also been floated. As for the suggestion that Republicans have drawn a “firm line” against any new revenues from closing loopholes, this gets us back to the most basic fact about the fiscal battle, which is this: There is no conceivable scenario under which Republicans will get serious entitlement cuts without agreeing to new revenues. None.
The President and Senate Dems will never agree to a package that only cuts entitlements. There’s a simple reason for this: From the point of view of Democrats, the sequester cuts are preferable to replacing them with entitlement cuts. There is no imaginable scenario under which Dems would agree to replace the sequester only with entitlement cuts. Such a thing could never be sold to rank and file Democratic officials, let alone to the base.
The Politico piece portrays Obama as having no option other than a grand bargain to avoid both the political backlash from sequester cuts and the showdown over the debt ceiling that could come next month. That may be true, but the flip side of this is that Republicans have no option for avoiding these things other than reaching a deal. And the deal must contain new revenues, because Democrats would prefer to live with the sequester than replace it only with entitlement cuts.
The basic dynamic here is simple for both parties. Either a deal is reached involving new revenues and entitlement cuts, or the sequester continues indefinitely. And it needs to be restated that the sequester is not a good option for Republicans, either, despite all the triumphalism about it. They risk taking the blame for the economic damage it does (Obama does, too, but he’s not up for reelection, and they are), and it doesn’t give them the entitlement cuts they claim to want. Giving Obama more flexibility over the sequester doesn’t really solve anything, either: The magnitude of cuts remains the same, and nothing happens with entitlements. What’s more, it seems that even some Republican officials are realizing that being the party of deep austerity and crisis-to-crisis governing (such as would happen with another debt ceiling fight) is not sustainable over the long term.
[WASHINGTON POST By obsessing with zeroes on the budget spreadsheet, we send a not-so-subtle signal that the focus of our country is on the phony economy of Washington, instead of the real economy out here in Charlotte and Shreveport and Cheyenne,” Louisiana Gov. Bobby Jindal, who,... is mentioned as a 2016 presidential candidate, said in a speech before the Republican National Committee in January. He added: “A debate about which party can better manage the federal government is a very small and short-sighted debate.”
Jindal, his advisers argue, is not saying that Sen. Paul Ryan’s plan to limit federal spending is a bad thing — rather that the focus needs to be first and foremost on how Republicans can grow the economy rather than shrink the government.
Jindal isn’t the only conservative voice raising questions about the philosophical underpinnings of the Ryan budget.
New York Times columnist Ross Douthat, who praised the first and second editions of Ryan’s budget, was critical of version 3.0, writing:
“Modest deficits are perfectly compatible with fiscal responsibility, and restructuring the biggest drivers of our long-term debt is a much more important conservative goal than holding revenues and outlays equal in the year 2023. What’s more, the quest for perfect balance leaves the House G.O.P. officially committed to a weird, all-pain version of Obamanomics — in which, for instance, we keep the president’s tax increases and Medicare cuts while eliminating his health care law’s assistance to the uninsured.”.]
WASH POST GREG SARGENT (Cont'd)
The most important fact about the situation — the central fact about it — is that there’s no route to a resolution that doesn’t involve a new cuts/revenues compromise of some kind. As Noam Scheiber detailed , there is a route to that compromise, albeit a difficult one, that could be viable even if GOP leaders hold out against it. I don’t necessarily think Republicans will agree to new revenues because they actually care about the deficit or about entitlement reform, but it is conceivable that some non-leadership GOP officials may break away and do so simply because the alternative for the GOP, over time, looks a lot worse.