Mar 10 2013

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Beware Obama’s “Rope a Dope” on a Grand Bargain

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Beware of POTUS Bearing Gifts...

Beware of POTUS Bearing Gifts…

It was all bon homme and optimism last week after President Obama dined with several influential Republican Senators as part of a new “charm offensive,” ostensibly aimed at reaching a “grand bargain” on the budget.

The President, ever the gracious host, even picked up the check for the swanky meal at the Jefferson Hotel.

The news cycle, which had been dominated for weeks by breathless coverage of the President and his increasingly apocalyptic vision of the impact of the sequester cuts, was magically replaced by a new narrative of POTUS as the Great Conciliator.

You have to hand it to the media people in the White House.

Just when the gargantuan silliness of the Administration’s posture on the sequester threatened to expose POTUS as the president Who Cried Wolf – and wake the Obama-stupored media into actually doing their jobs – the White House throws out a little fresh meat and a new story line is born, burying the failed sequester manipulation in its wake.

But that is all this is – a change in the story line. The intentions and goals for the White House have not changed, and Republicans would do well not to get sucked in to this new manipulation which can only turn out badly for them.  Here’s why.

In a March 2nd story, the Washington Post – of all papers – laid out the White House strategy for the next two years:

“The goal is to flip the Republican-held House back to Democratic control, allowing Obama to push forward with a progressive agenda on gun control, immigration, climate change and the economy during his final two years in office, according to congressional Democrats, strategists and others familiar with Obama’s thinking.”

That is not a governing strategy, it’s a political strategy. It requires the White House to maximize policy differences, to marginalize Republicans  and to seize the supposed middle ground for 2014 where a net 17 seat gain in the House will put Nancy Pelosi back in the Speaker’s chair.

Importantly, it does not require that anything get done.  Indeed, the more issues that go unresolved, the better it is for the Democrats.

And so far this year, the strategy has been a raging success.

The GOP has been hapless in fending off the brutally efficient White House message machine that has effectively pilloried Republicans as the party of the richest and most privileged Americans.

All that was missing was John Boehner’s face on an FBI “Most Wanted” poster.

This was contrasted with a calm and common-sense President who sought only a “balanced approach” to solve the nation’s problems. Who would suspect that such an “approach,” as a matter of record by the CBO, added $7 trillion to the national debt over the next decade?

POTUS overreached with his sequester demagoguery, but no matter.  The PR pivot to “reconciliation” with the GOP has the same goal by different means.  The facts on the ground are these:

Most everyone in the Washington intelligentsia believes that the key to a politically realistic budget deal  incorporates higher taxes and budget cuts, including serious long-term, entitlement reform.

The President, for his part, has hinted that he might be open to some form of entitlement reform, but not without new revenue.  Several GOP Senators have expressed support for tax reform that would eliminate loopholes, but only if entitlement reform is on the table.

Seems tantalizingly close, yes?

The key is what to do with the revenue that results from closing the tax loopholes, or “tax expenditures?” POTUS wants the money for the budget.  Conservatives want it to reduce tax rates. A middle ground approach would be to split the difference, use a portion of the revenue for deficit reduction and the rest for tax rate reduction.

Therein lies the dilemma.

As the Obama White House realizes, a deal like this is something that Senate Republicans could live with – even if they didn’t love it – as this approach would tackle the existential threat posed by the long-term drivers of deficit spending and debt – entitlements.

But that deal is dead in the House.  The numbers explain why:

House GOP Seats Margin of Victory ‘12
125 20% or More
 66 10-20%

President Obama and the Democrats know this. Thus the President’s charm offensive is all upside for Democrats. POTUS gets to stake out the firm middle ground of “balanced” revenue increases and entitlement reform in a grand compromise in the Senate that will be put to a vote.

Sure it will be an anathema to progressives and the left, but it’s all for show. Anything but a revenue neutral bill will be unable to pass the GOP controlled House.

82 percent of John Boehner’s caucus would likely increase their margin of victory in 2014 by opposing a bill with any tax increase – even one that was limited to reducing loopholes. And if Boehner attempts to win the vote by relying on the votes of Democrats, his speakership will be finished.

Eric Cantor will be Speaker, and the very political forces that prevented a comprehensive deal would now be in charge of the House with a grand compromise in ashes.

In 2012, President Obama won 16 House districts that are represented by Republicans  – one of the lowest cross-over voting percentages in modern times, mostly as a result of redistricting and increased partisanship. But those 16 seats are precisely the audience that would be receptive to an Obama argument that Republicans are the core obstacle to progress.

And what better way to demonstrate that then cut a deal in the Senate that is doomed in the House?

It is a very high risk strategy for the White House.

The political landscape of 2014, no matter how hard the White House tries to shape it, is unknown – just look at the difference between 2008 and 2010 to see the possibilities.  And for all the effort on the House, the Senate is looking difficult for Harry Reid and the Democrats in 2014, with 23 Democrats up for re-election, including seven Members from red states, as well as a spat of high-profile retirements.

Despite these challenges, a tantalizing change of only four percent  in party turnover in 2014 makes Nancy Pelosi Speaker again, and if the Senate holds, Obama can spend his last two years governing as he did in his firs two.

The payoff may be worth the bet for progressives.

In the final analysis, the President’s commitment to a real deal can be seen in the charm offensive itself. Nothing of substance or value occurs in front of the cameras, and the White House had the press corps camped outside the Jefferson Hotel to capture the GOP Members offering cautiously encouraging words (thumbs up from McCain).

This is all for public consumption and positioning.

For the GOP, political suicide can only be prevented by establishing a baseline in the House of an acceptable bill and sticking with it.  If that means throwing cold water on the grand bargain, then so be it.

A compromise isn’t a good deal unless you have a reasonable assurance of making it the law. Anything less provides an enormous political advantage to the President and Democrats.

Fool me once, shame on you.  Fool me twice, shame on me.

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