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The 2012 Campaign Starts Now

Obama Budget Speech

First Posted: 04/13/11 07:42 PM ET Updated: 06/13/11 06:12 AM ET

WASHINGTON – Forget the Republican primary battle. It’s so boring even Donald Trump can’t make it interesting.

But in case you didn’t notice, the 2012 general election campaign began this week. It’s going to be about taxes and Medicare.

President Obama used Wednesday's budget speech to try to set the 2012 framework, making plain on cable TV what he and his aides say to each other in private: GOP Rep. Paul Ryan (R-Wis.) handed them the keys to a second term.

The president's aides think they are in a win-win situation. If Obama can cut a budget deal this summer that preserves the essence of Medicare, he'll get credit as a deal-maker. If he doesn't, he has a winning issue for 2012.

After the speech, members of the administration held a background briefing in an ornate War Department office in the Old Executive Office Building. Complete with models of gunboats in the hallway, it seemed an appropriate venue for their essentially combative message.

Here’s the campaign “frame,” as Obama and his staff want us to see it:

“Of course everyone wants to cut the deficit. The president wants to do it by raising taxes on the wealthiest Americans while maintaining 'Medicare as we know it' as an open-ended entitlement program. Republicans, under Ryan’s plan, would waste $1 trillion by holding the wealthiest harmless, and would dismantle Medicare, the epitome of national community, by turning it into an underfunded, easily-downsized voucher plan."

Obama and his aides believe their approach not only has the virtue of being the right thing to do, but is also a political winner. Tax increases, always risky, are encased in a $4 trillion deficit reduction plan; an impassionate defense of Medicare is a good way to soothe his angry Democratic base. The program is deeply popular, especially with seniors and Democrats.

Bottom line: the president is willing, even eager, to have this year’s budget debate extend past the October 1 deadline and linger on into the spring of 2012.

According to background interviews with top White House officials, here is roughly how Team Obama envisions the political-fiscal warfare of the next year:

A final, successful vote this week on a budget for the rest of the fiscal year, ending October 1. The president, Democrats and Republicans agreed on substantial cuts, estimated to be anywhere from about $25 billion to $38 billion, depending on your ideology and arithmetic.

A vote, in late May or early June, on a bill to raise the amount of money the country is legally allowed to borrow. According to White House insiders, GOP leaders have said they won’t hold the bill hostage to another shutdown. “We can’t afford to have a ‘countdown clock to default,’” one Obama aide told them in a private meeting today.

But, as part of this debt bill or another enacted at the same time, the White House hopes GOP leaders will accept a “framework” that would set a target for deficit reduction –- about $4 trillion over 10 to 12 years –- and include specific budget cuts and tax measures.

The Obama crew is under no illusions that they can reach a full, comprehensive deal done as part of the debt-ceiling vote, and it sounds as though they don’t really want to get one by then. Instead, they expect –- even hope –- to argue about tax rates and Medicare for the rest of the year and into the next, if the GOP is willing to do so.

“I’m not saying I want to be debating these two matters in the middle of the 2012 campaign,” said a top White House official. “But if we are, so be it.” He was smiling.

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