04/11/2011 03:50 pm ET | Updated Jun 11, 2011

White House's Budget Strategy Leans Heavily On Clinton Nostalgia And Selling Capitulation [UPDATE]

Over the weekend, the White House averted a government shutdown by largely agreeing to the GOP's terms on discretionary spending. In return, Democrats were allowed to let Mike Pence's desire to defund Planned Parenthood die a legislative death either in Harry Reid's Senate or at the end of President Barack Obama's veto pen. This led Ron Brownstein to remark on this Sunday's edition of ABC's "This Week" that the Democrats had conceded the argument that "austerity is acceptable in a time of unemployment."

If you cast your mind back to December's lame duck session -- the last time the Democrats and the White House had to face down some GOP "hostage taking" -- they were conceding that jobs could only be created by extending massive tax cuts on the wealthy.

One might see this as a bad thing, but not the White House -- officials have been trumpeting this past Friday's eleventh hour deal as an historic accomplishment. That the White House has cut a sizable portion of discretionary funding isn't the sort of thing that's going to get them relief from critics -- the House GOP are more than ready to reset their "the White House isn't serious about the deficit" argument as the budget battle shifts down the calendar.

Nevertheless, adviser David Plouffe was on the air this weekend, linking Friday's capitulation with their lame duck capitulation as a great example of a governing strategy, where everyone "comes together" and more or less agrees to what John Boehner wants to do.

Ezra Klein senses that the White House is attempting to cut-and-paste the veneer of the Clinton administration, and wear it as a talisman into 2012 (when we'll have a fight over the Bush tax cuts again, by the way!):

The Obama White House is looking toward the Clinton model. After all, Clinton also suffered a major setback in his first midterm, Clinton also faced down a hardline Republican Congress, Clinton also suffered major policy defeats, and yet Clinton, as the story goes, managed to co-opt the conservative agenda and remake himself into a successful centrist. The Obama administration has even hired many of Clinton's top aides to help them recapture that late-90s magic.

That story misses something important: Clinton's success was a function of a roaring economy. The late '90s were a boom time like few others -- and not just in America. The unemployment rate was less than 6 percent in 1995, and fell to under 5 percent in 1996. Cutting deficits was the right thing to do at that time. Deficits should be low to nonexistent when the economy is strong, and larger when it is weak. The Obama administration's economists know that full well. They are, after all, the very people who worked to balance the budget in the 1990s, and who fought to expand the deficit in response to the recession.

In attempting to recreate this magic, the White House is going full sail, and have even apparently picked their foil, in the form of Representative Paul Ryan (R-Wisc.). (Presumably, this is because Clinton's foil, Newt Gingrich, has not aged well.) As Glenn Thrush points out, "Obama has prospered most when he's had an obvious antagonist." Which is all well and good! But it makes you wonder why, thus far, White House push-back on Ryan's budget plan has been anemic. Through Jay Carney, Obama has expressed his opinion that Ryan's plan isn't "fair," but there are big elements to Ryan's budget that have been rattling around DC for months. Responses to Ryan's plan to voucherize Medicare should have been immediate. And the White House has largely passed on both rounds of Ryan's Heritage-enabled pie-in-the-sky unemployment numbers.

We obviously can't know what Bill Clinton might have done in this situation, but something tells me that he might have, at some point, "attempted politics." Matt Yglesias lays out an example of such a tactic -- a good plan for how to fight the debt-ceiling fight. Step one is basically "stop making concessions." Here's step two:

This isn't a sudden "shutdown." Nor is is true that we have to default on obligations to our bondholders. Rather, it means that government outlays are now limited by the quantity of inbound tax revenue. But for a while, the people administering the federal government (to wit Barack Obama and Timothy Geithner) will be able to selectively stiff people. So the right strategy is to start stiffing people Republicans care about. When bills to defense contractors come due, don't pay them. Explain they'll get 100 percent of what they're owed when the debt ceiling is raised. Don't make some farm payments. Stop sending Medicare reimbursements. Make the doctors & hospitals, the farmers and defense contractors, and the currently elderly bear the inconvenient for a few weeks of uncertain payment schedules. And explain to the American people that the circle of people who need to be inconvenienced will necessarily grow week after week until congress gives in. Remind people that the concessions the right is after mean the permanent abolition of Medicare, followed by higher taxes on the middle to finance additional tax cuts for the rich.

That sounds good to me! Think the White House will pursue that kind of strategy? Not as long as they believe they are making "history" by "coming together." (It should be pointed out, it's not like congressional Democrats have covered themselves in glory, either. They've passed on many a fight as well. They had their reasons; they were stupid ones.)

UPDATE: Let's bring in some key insight from Greg Sargent, who remembers the Clinton White House's successes as something more than simply co-opting their ideas while the economy was doing awesome -- it also included taking actual principled stands:

I just got off the phone with Michael Waldman, who was Clinton's chief speechwriter throughout much of that battle, and he told me that a crucial piece of the historical record is being lost. While Clinton, a New Democrat, did push for welfare reform and call for a balanced budget to restore his fiscal credibility, the former president pivoted from there to a major, protracted public fight over Medicare -- and an unabashed defense of a liberal role for government -- that was crucial in restoring his public standing.

Few remember this part of the story, but Waldman notes that Clinton seized on the Medicare standoff to reaffirm his support for the social contract as embodied in Lyndon Johnson's Medicare promise to America, frequently referring to proposals to cut Medicare as an affront to our "values." Clinton even used Johnson's pen to veto the GOP's budget.

Go read the whole thing.

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