Austerity Grand Bargain Feared Between Republicans, White House

photo: Thomas Hawk via Flickr

Robert Kuttner articulated a growing rumor that’s been floating around in liberal circles, something that the Obama Administration has actually telegraphed since the beginning of the Presidential term:

The tax deal negotiated by President Barack Obama and Senate Republican leader Mitch McConnell of Kentucky is just the first part of a multistage drama that is likely to further divide and weaken Democrats.

The second part, now being teed up by the White House and key Senate Democrats, is a scheme for the president to embrace much of the Bowles-Simpson plan — including cuts in Social Security. This is to be unveiled, according to well-placed sources, in the president’s State of the Union address.

The idea is to pre-empt an even more draconian set of budget cuts likely to be proposed by the incoming House Budget Committee chairman, Rep. Paul Ryan (R-Wis.), as a condition of extending the debt ceiling. This is expected to hit in April.

White House strategists believe this can also give Obama “credit” for getting serious about deficit reduction — now more urgent with the nearly $900 billion increase in the deficit via the tax cut deal.

I would add that the President may not just be pre-empting Paul Ryan with this move, but a bipartisan group of Senators who are basically carrying on the Catfood Commission after its demise.  [cont’d.]

A bipartisan group of more than 20 senators has been meeting since July to try to push for fiscal discipline. The senators’ effort to require the Senate to address comprehensively the deficit, spending cuts, and tax reform in 2011 failed to make it into the two-year tax-cut legislation signed Friday, but they will keep pushing for action […]

Ms. MacGuineas points to the bipartisan Senate group, led by Sens. Mark Warner (D) of Virginia and Saxby Chambliss (R) of Georgia, as a welcome sign that the efforts of the president’s fiscal commission won’t go to waste. MacGuineas has advised the senators.

“It seems the remarkably good work of the fiscal commission could have died a slow and quiet death if not for this bipartisan group of champions,” she says. “I don’t know that anyone was expecting this, but there appears to be a very serious effort under way in the Senate to keep the momentum of this work alive.”

So you have the House Budget Committee’s incoming chair ready to fly the federal budget into the center of the sun and privatize everything. You have Warner and Chambliss willing to team up and give a supermajority to deficit-cutting efforts. You have Democrats bowing out of the 111th Congress with the government funded only until March, giving the first of two opportunities to trap the budget and hold it hostage. And no money has been appropriated for the Affordable Care Act yet.

So amidst all of this, the only real obstacle is a President who is trusted more than the Republicans to cut the budget deficit. I don’t know what benefit comes by pre-empting (read: pre-compromising) any of this, but at least in 1995 Clinton had a few friends in Congress who didn’t want to see the government shut down, either.

Liberal groups are likely to make a stink about this. But I’m trying to see the allies at any level of government. The only instinct that could head off this inexorable rush to austerity could be the instinct for self-preservation. Ilyse Hogue expressed a form of that:

Liberal organizers said they hope the White House will want to work closely with them. But Ilyse Hogue of wondered if Obama’s top aides appreciated the potential political damage to his 2012 chances if the party’s liberal base feels left out.

“If this administration has a pathway to victory that cuts out the sort of core constituency that has been fighting with him and for him, I’d like to see it,” she said.

The Administration just inked a tax cut deal that they solely defended on the grounds that the economy needs major stimulus. If they want to cancel that out just three months later, and cut the unrelated Social Security checks to seniors in the process, you have to conclude that they simply don’t want the burden of leadership anymore.

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