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Obama Debt Reduction Plan Calms Democrats' Concerns On And Off Hill

Obama Howard Dean Carville

First Posted: 09/19/11 07:59 PM ET Updated: 11/19/11 05:12 AM ET

WASHINGTON -- President Barack Obama's broad new debt reduction proposal has, at least momentarily, managed to placate a community of progressive activists, Democratic operatives and congressional offices who have grown increasingly despondent over the course of his presidency.

On Monday the White House outlined more than $3 trillion in deficit reduction measures that included $1.5 trillion in tax increases, $1 trillion in war savings and $580 billion or so in mandatory program savings. What stood out, however, was what wasn't in the plan at all: changes to the payment structure of Social Security or the eligibility age of Medicare that the president had voiced support for as recently as August.

Democratic sources familiar with the drafting of the proposal insist that the 80-page document, which included a $470 billion job creation program, is largely consistent with the philosophical blueprint the White House has pursued during the past year. But they also didn't beat back suggestions that Obama and his team are more eager than ever to draw contrasts with Republicans on issues such as tax policy or entitlement reform. Perhaps the best example is the president's pledge to veto any deficit reduction plan that cut Medicare benefits but didn't include a dime of tax increases -- a threat that came in response to House Speaker John Boehner's (R-Ohio) insistence that tax hikes be left completely off the table.

"I was very pleased with the president's veto statement. I am a supporter of this," said Howard Dean, a former Vermont governor and DNC chairman. "Are there a few things that maybe should have been done differently? Maybe so. But overall, this is a very good place to start and now we just have to make damn sure we don't make any of the kind of irresponsible concessions that Republicans are going to ask for."

Reserved optimism with the president's deficit reduction plan did, indeed, seem to be the order of the day. Not just from Democrats who appreciated the slate of administration policies (there were critics among both progressives and centrists), but because for an administration that has gained a reputation for making preemptive concessions, the proposal represented a welcome departure.

"From everything I see, this seems to be pretty good stuff," said James Carville, the longtime Democratic consultant who just days ago urged the president to panic and start firing staffers. "Realistically, how much you will end up with, I don't know. But if you start there, you will end up somewhere better."

Carville said he believed the type of proposals that made it into the plan would help bolster Obama's reelection prospects.

"The most popular thing you can do to cut the deficit is to raise taxes on people making over a million dollars. That's not just a sop to the Democratic base, that is a sop to roughly 65 percent of the country," Carville said. "So, good. If this signals something new, then great."

The president's plan brightened the mood among Democrats on Capitol Hill as well. Some lawmakers were quick to assert that the administration's plan would likely be amended, while others were critical of specific policy proposals contained in it. But the predominant expression was one of relief.

"It couldn't come at a better time vis-a-vis the Democratic caucus," said Jim Manley, political consultant for the firm Quinn Gillespie and former top spokesman for Senate Majority Leader Harry Reid (D-Nev.). "Folks were really getting concerned."

Even those who have traditionally urged moderation from Democratic politicians were complimentary about the president's new tone.

"It was an effective opening bid," said Matt Bennett, Senior Vice President for Public Affairs at the centrist-Democratic think tank Third Way. "He definitely planted a flag in the ground. He definitely communicated to his base and it was an opening bid in what is going to be a long negotiation."

An opening bid and a line in the sand are only the start of high-stakes negotiations. And Obama's tone and approach seem almost certain to soften over time. But while Bennett may be willing to stomach the compromise that will inevitably be struck, others were more nervous. The president's initial proposal, for example, leaves Social Security alone while calling for $240 billion in Medicare savings, including means-testing for additional areas of the program. Dean qualified such reforms as "not at all disabling," but other liberals saw a window opened.

"We don't feel like we can rest," said Nancy Altman, co-director of Social Security Works. "But from where we started ... this is a major improvement. We want to push him a little bit further so he really understands that Social Security is a pension plan and that it is not simply a negotiating tactic."

Clouding the response to Obama's debt reduction plan is the recollection that not too long ago, he offered Boehner a deal that would have changed Social Security's payment structure while raising the eligibility age for Medicare. Senior administration officials explained that those provisions weren't included in the current proposal because this plan reflects "his vision, and not a legislative compromise being crafted to garner some number of votes in the House and the Senate." But implicit in that statement is the recognition that Obama would be willing to make the same deal again, provided it could move a bill through Congress.

And yet, the political landscape now is drastically different than the one that existed during the peak of the debt ceiling negotiations. And it seems likely to change even further. Mike Lux, a progressive strategist who has been critical of the administration in the past (despite working for the president during his transition to the White House) argued that progressive groups have and continue to create "a magnetic pole ... that Obama is starting to move to." As the election nears, Lux and others argue, political realities will only further compel the president to both campaign on raising tax rates on very wealthy Americans and speak out against deep cuts to popular entitlement programs.

"He just has to hang in there and be tough for 14 months," said Dean. "It is hard to believe that presidential politics didn't affect his stand here ... I think people want a strong guy in the White House. They believe Republicans are totally in the tank for corporate interests ... and they just want someone to stand up for their interests."

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