THE VITAL CENTER AUGUST 2, 2011
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Having spent some time inside the White House, I have some sense of how the world looks and feels from that unique vantage point. Its denizens always have a sense of operating under enormous pressure, subject to myriad constraints. When criticized, White House officials typically respond that they have done the best they could in the circumstances, and that if their critics had been in their shoes, they would have done the same thing.
The more outside observers focus on the immediate situation, the more they will tend to agree with the assessment of the White House. But if we step back and take a longer view, we often see roads not taken that could have led to better outcomes. That’s certainly the case with the just completed debt ceiling negotiations.
As many critics have pointed out, this man-made crisis was entirely avoidable. The Democrats could have raised the ceiling last December. They chose not to, handing a sword to their adversaries. Senate majority leader Harry Reid wanted to force the incoming Republicans to accept some responsibility for the increase. We’ve seen how that worked out. And if President Obama genuinely believed that the Republicans would cooperate because it was the right and responsible thing to do, then naïveté was the least of his mistakes. (A moment of introspection about his own 2006 vote against increasing the debt ceiling should have sufficed to disabuse him of that notion.)
But there are two other less-discussed forks in the road, the first of which occurred just two weeks ago. If news accounts are accurate, the Obama/Boehner talks broke down when the president proposed increasing the revenue component of the grand bargain from $800 billion to $1.2 trillion. Given what he ultimately accepted, $800 billion looks pretty good. (How likely is it that the new congressional committee will be able to agree on anything approaching that figure?) To be sure, we’d have to know more than we do about the other components of the proposed deal, especially the changes in entitlement programs, to reach a solid all-things-considered judgment. And it’s not at all clear that Boehner’s fellow Republicans in the House would have gone along with him on such a bargain, either. But it has been widely reported that the White House shifted its stance only after the Gang of Six made its framework public. If the bipartisan G6 was proposing $1.2 trillion in revenue increases, how could the White House accept less? At the time, that must have seemed like a slam-dunk argument. But it was too clever by half, and the White House ended up throwing away a chance to promote the president’s “balanced” approach to deficit reduction … and, by the way, to drive a wedge into the massed ranks of the opposition.
The most important road not taken, however, occurred many months ago, in December of last year, when the president chose to keep his distance from the recommendations of his own fiscal commission. Suppose he had endorsed its broad approach while making it clear that he disagreed about a number of specifics. Suppose further that he had reinforced that message by featuring it in his 2011 State of the Union address and by using it as the framework for his 2012 budget proposal. If he had done so, he would have had a full six months to build support for his “everything on the table” approach and to rally the American people who, as countless surveys have shown, strongly prefer it to the Republicans’ spending cuts-only strategy.
I have heard of two arguments against this strategy offered by White House officials. First, it is said the president did not want to step forward until after the Republicans had offered their own budget framework. If Representative Paul Ryan remained true to his principles, he would propose huge cuts in popular programs such as Medicare, generating a public backlash, after which the president could return to the fray in a much stronger position. Well, the president certainly smoked Ryan & Co. out. But what did he gain? As of now, I can’t think of anything. Sure, public approval of the Republican Party is way down. But so are his own numbers. And if the debt ceiling deal reflects a weakened Republican Party, one shudders to think of what a stronger one would have done.
The second argument against endorsing the fiscal commission’s approach goes like this: Sure, Obama wanted to end up roughly where the commission did. But if he had said so back in December, then all the bargaining would have been between that position and options further to the right. In the end, the president would have been forced to accept a deal far less balanced than the one the commission had recommended. Again, that sounds clever and strategic, exactly the kind of advice that senior political advisors and their wannabes love to offer.
And what happened? Not only was the president forced to accept a deal to the right of the fiscal commission’s proposal; he also yielded the high ground for three crucial months, enduring unrelenting criticism for his lack of leadership. And even after his mid-April shift, which rendered his original budget proposal an embarrassing dead letter two months after it was submitted, he continued to bob and weave. It’s easy to speculate about what was going on behind the scenes. Congressional Democrats were urging Obama not to yield an inch on Medicare and Social Security: If he did, he would blur the bright-line contrast between the parties so beloved of political consultants. By the time he decided to grasp the nettle and enter into serious discussions with Boehner, the clock had virtually run out, making it far more difficult to reach an agreement embracing both revenues and entitlements, which would have been a tough sell even in better circumstances.
I’m aware how easy it is to dismiss my arguments. Alternative history is a fool’s errand, it may be said. And how can I claim to know what senior White House advisors (let alone the president) were really thinking? Answer: I can’t. I’ve just tried to reconstruct a sequence of events that otherwise makes no sense. Obama began the year determined to talk about selective public investments as the key to “winning the future.” He ended up focused exclusively on the Tea Party’s preferred agenda. Once he couldn’t avoid the fiscal issue, he wanted a balanced approach but was forced to settle for something quite different. He tried to position himself as the adult riding herd on a brood of squabbling children; he ended up portraying himself as a suitor left at the altar, not just once, but repeatedly.
Most Americans will accept a president with whom they disagree. Above all, they want two things from the occupant of the Oval Office—a core of convictions they can understand and the strength to fight for them. They will stick with that kind of president, even when results are slow to materialize. Ronald Reagan, whose leadership Obama is said to admire, avoided electoral disaster in the 1982 midterm elections, when a 10.8 percent unemployment rate could have done to his presidency what the 2010 elections did to Obama’s. Even when Reagan’s approval rating dipped below 40 percent, the people knew who he was and where he wanted to take the country, and to an extent that is surprising even in hindsight, they stuck with him. Obama has 15 months left to convince the people that he is that kind of president. The odds are getting longer, and the time is getting shorter.
William Galston is a senior fellow at the Brookings Institution and a contributing editor for The New Republic.
10 comments
"Most Americans will accept a president with whom they disagree. Above all, they want two things from the occupant of the Oval Office—a core of convictions they can understand and the strength to fight for them." My father, who was politically engaged all his life, taught me this 50 years ago, when I was just a kid. It was true then and it is true now.
- roidubouloi
August 2, 2011 at 12:45am
Over the last six to twelve months, Obama has put on a clinic of what NOT to do in negotiations. DON’T start the negotiation with unilateral, substantive concessions. DON’T rule out your own ability to circumvent the other side if a deal is not reached. DON’T allow the other side to frame the terms of the debate. DON’T fail to anticipate the most obvious next move of the other side. DON’T project weakness. DON’T signal that a deal—under any terms—is more important to you than to the other side. Obama is the kind of intellectual guy who should never be allowed to participate in the dirty, grimy world of real-world negotiations. He seems to be a good policy wonk and general administrator, but a chief executive has to be able to negotiate well, project strength and anticipate the other side’s next move. Obama should have remained a law professor. I think someone should challenge Obama in the Democratic primary. For one thing, it would send a signal to Obama and future Democratic presidents about taking Democratic priorities for granted. For another, at this point I think a “generic Democrat” might have as good a chance as Obama in the general election. That is, Obama’s incumbency might bring more baggage than advantages. http://www.hulu.com/watch/264380/the-daily-show-with-jon-stewart-dealageddon-a-compromise-without-revenues
- NateG
August 2, 2011 at 10:43am
William Greider explains it so well that he should have been delivering Dem talking points: "...Obama’s facile arithmetic essentially scrapped the Democratic Party’s longstanding commitment to progressive taxation and universal social protections. The claim that cutting Social Security benefits will “strengthen” the system is erroneous. In fact, Obama has already undermined the soundness of Social Security by partially suspending the FICA payroll tax for workers—depriving the system of revenue it needs for long-term solvency. The mendacity has a more fundamental dimension. Obama helped conservatives concoct the debt crisis on false premises, promoting a claim that Social Security and other entitlement programs were somehow to blame while gliding over the real causes and culprits. Social Security has never contributed a dime to the federal deficits (actually, the government borrows the trust fund’s huge surpluses to offset its red ink). This mean-spirited political twist amounts to blaming the victims. There should be no mystery about what caused the $14 trillion debt: large deficits began in 1981, with Ronald Reagan’s fanciful “supply side” tax-cutting. Federal debt was then around $1 trillion. By 2007 it had reached $9 trillion, thanks to George W. Bush’s tax cuts for the wealthy and his two wars in Iraq and Afghanistan, plus the massive subsidy for Big Pharma in Medicare drug benefits. The 2008 financial collapse and deep recession generated most of the remainder, as tax revenues fell drastically. Obama’s pump-priming stimulus added to the debt too, but a relatively small portion. ..." http://www.cbsnews.com/stories/2011/08/02/opinion/main20086816.shtml
- K2K
August 2, 2011 at 10:57am
Well thank you K2K. I have been repeating here until I am sick of myself that the whole entitlement business is a fraud, the source of future problems but not at all the reason for our current deficit. The right has been using the current deficit that it caused as an excuse to attack entitlements. And, yes, the utter inability of Democrats to develop let alone sustain any narrative is an enormous political deficit. That is why I keep repeating that the Dems are all about policy and forget that successful politics necessarily precedes and sustains the ability to make policy. The Republicans are all about politics and power and don't much give a damn about good policy, only about maximizing the wealth of the already wealthy at whatever cost to the country and the planet. Asymmetrical warfare at its worst. NateG gives us as succinct and cogent and explanation of Obama's weaknesses as I have read anywhere. Hopefully libref will be along soon to complain about the use of capitals and remind us that none of us would ourselves make a better president than Obama. Good to know.
- roidubouloi
August 2, 2011 at 11:18am
I know roid - I do read some of what is written about domestic issues at TNR.com :) I did not watch that much of the House "debate" yesterday, but Rep. Chakka Fattah from Philadelphia was the only Democrat I heard who VERY succinctly captured the essence of what Greider wrote. Every liberal should have followed his lead. Instead, most of the Dems I heard were back to the 'oil company/corp jet/GOP=terrorist' talking points. By contrast, the GOP SOUNDED rational. Narrative rules. And then my Rep. Engel's "pig-in-a-poke" sent me out for a long walk since I have so little hair left to pull out :) I am not convinced that the GOP is "only about maximizing the wealth of the already wealthy at whatever cost to the country and the planet" No one fought harder than Schumer to protect the taxation of income as cap gains for private equity/hedge funds. I actually believe many in the GOP truly are stuck in some fantasy of 18th century small government, still fighting Shay's Rebellion. But, they are delusional about Starve the Beast - and I really really really want Norquist to be discredited, once and for all. and I do tend to think that the Democratic Party really has shifted into identity politics and forgotten what they stand for, only reacting in fear to "tax-and-spend" and "weak on natsec" legacy of LBJ. time to spend another day dealing with the real estate crisis that continues to stifle any hope of jobs recovery.
- K2K
August 2, 2011 at 12:05pm
K2K. You won't get job recovery until Keynesian economic policies are put into place. Economics has been a Science for over 60 years, and Keynesian theories and policies are the only ones that fit a mound of available data. You won't get Keynesian policies from any Repub or Blue-Dog-type Dem, including BHO. Your only hope-- and that of the country-- is to replace BHO and as many Repubs and Blue-Dog-Dems with Progressives. The sooner the better--- a failure of debt negotiations would have made that sooner. Now on need wait 3-12 months for the current economic crisis to deepen because of budget cuts, lessening of consumer demand. No confidence fairy will save you, no matter how hard you wish for the cutest Tinker Bell.
- drofnats1
August 2, 2011 at 12:37pm
Galston left out the most likely reason Obama didn't endorse Bowles- Simpson: it would would almost guarantee Republican, especially tea party, opposition, since anything Obama supports, they must oppose. But I do agree with Galston's larger point that Obama hasn't been out front in setting the terms of the debate, beginning with HCR. Chait often says that, in politics, perception is reality, something which seems not to occur to Obama and, one assumes, his advisors. Hence, Reagan was seen as adhering to his convictions even as he shifted from tax cutter to tax increaser, from interventionist to retreater. For Obama, even though his convictions appear to be on the side of cutting the deficit, the perception is still one of a big spender run amok. I attribute this failure to establish a theme to the circumstances in which he was elected: he was elected at a time of economic crisis but he did not run as a crisis candidate, but as a post-partisan candidate, the crisis coming at the very end of the campaign. And the one thing that hasn't served him well is governing as a post-partisan at this time of highly charged partisanship on the right. Whether it's good politics or bad, Obama has now chosen his theme as a deficit hawk, but I believe for reasons of conviction not politics as Galston suggests.
- rayward
August 2, 2011 at 1:04pm
I'd just like to note that the 800 billion revenue deal was actually worse, much worse, than the one we came out with, because it got this through preempting 3.8 trillion in revenue over ten years from the expiration of the Bush tax cuts. So, while I generally agree with Galston on this article, this was a far less bad option.
- Curran1
August 2, 2011 at 2:11pm
Excellent piece by Galston. All I would add is that the Tea Party freshmen (and upperclass sympathizers) were not seen in December 2010 as being strong and savvy enough to push the Republican House leadership around. These articles by nature risk accusations of hindsight and I believe that's the case here.
- emccded
August 2, 2011 at 9:32pm
drofnats1: sorry, there willbe no job recovery of significance until Made in America makes a comeback through import replacement. I worked through the de-industrialization 1978-2001. There is absolutely no good reason why so many millions of manufacturing jobs were offshored. Not unit labor costs, although one million mfg jobs that migrated to Canada after NAFTA did have lower unit labor costs because medical insurance is not employer-linked. Wait for the day Obama calls a conference that forces Wal-Mart and other big box retailers to decide whether lower cost imports resulting in low inflation was really such a good idea. Then he has to have the conference with Wall Street analysts to force them to change their paradigm that focuses on relentless quarterly earnings increases. For the grand finale, Obama has to exercise eminent domain over the oil shale deposits in Colorado, estimated at one TRILLION+ barrels of oil, which would 100% supply America at current usage for more than 175 years. ONE HUNDRED AND SEVENTY FIVE YEARS. Yes, the aquifer runs thru the oil shale deposits, but sacrificing Colorado for the national and economic security of America makes sense to me. Plus, it would create good jobs even though Coloradans (I do not know how many) will have to relocate, possibly solving part of the housing crisis. Ah, yes, the housing crisis. The original stimulus was too timid - should have made a tax credit for ANYONE buying a primary residence available for three years. The stop and start just caused uncertainty in housing sales. America is past the point of a simple government spending to replace demand. Manufacturing matters. Trade deficits matter, and a big chunk of ours has long been in oil and cars. I stopped tracking the trade deficit in detail in 2002, but I would add major appliances and furniture to the list. It is absurd for the federal government to subsidize raw cotton agriculture so we can export the cotton to be spun into fiber and fabric for TOWELS AND SHEETS!!!!! Obama has absolutely NOT one cabinet official with actual private sector non-financial experience. He never cared about where the NEW jobs were to come from - just picked up Bill Clinton's green jobs mantra. Germany is 30 years ahead of the USA in green technologies. clueless in Washington is a bi-partisan love affair since 1978.
- K2K
August 2, 2011 at 11:25pm