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The End Game: Saving Obama From Himself

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As the debt doomsday of August 2 draws closer, what sort of end-game can we imagine?

The worst scenario would be for an outbreak of common sense and self-interest to overtake the extremism of the House Republican caucus. If the Republicans were to accept Obama's proffered deal, they would weaken Social Security and Medicare -- and put the Democrats' fingerprints on the deed -- depriving Democrats of their traditional defense of America's best loved social programs. They would also get a ten-year deficit-reduction agreement that is mostly program cuts. And they would get an austerity package that guarantees high unemployment as Obama heads into a difficult re-election. And a Democratic president is offering this deal!

The Republicans would also get to savor the spectacle of a badly divided Democratic Party, as the White House twists arms of unwilling House and Senate Democrats to vote for a right-wing package.

It's quite a drama. Who will save us from a perverse approach to deficit reduction that is bad economics and worse politics -- the unreality of the Republicans, or the principled resistance of rank and file Democrats?

Obama and his advisers, weirdly, believe that his stance as "the only grownup in the room" who forces his own party to abandon its core principles for the sake of an austerity program will somehow win the gratitude of voters struggling with declining incomes and rising joblessness.

The unemployment may be stuck near ten percent, but good old Obama brokered a deal to balance the budget in 2021. So re-elect this man.

On which planet is this?

A better scenario would be for Sen. Mitch McConnell to prevail among Republicans, with his idea to allow Obama to raise the debt ceiling unilaterally and then to keep negotiating a long-term budget deal along a parallel track. That would spare the country both a default on the debt and an awful ten-year budget agreement.

But this offer seemed almost too good to be true, and it is. There are a few mickeys in the deal now being negotiated by McConnell and Senate Democratic leader Harry Reid. In one version, Obama would have to keep coming back to Congress to get approval to increase the debt, a little bit at a time between now and the end of his presidential term. And Obama would have to match debt increases with $1.7 trillion in budget cuts. In another variation, the deal would create a deficit-reduction commission that could send a budget-cut plan straight to the House and Senate floor for an up or down vote.

In the game of chicken that the Republicans are playing with Obama, the president has a couple of big things going for him. One is reality. There actually will be dire consequences if the United States defaults on its debt.

It is one thing for right-wing Republicans to deny Darwin, or sexual orientation, or even climate change, where the consequences can be fuzzed up via junk science and the impact of science-denial is diffused or delayed. It is quite another to deny the reality of an event scheduled to happen in a couple of weeks. That actually might backfire on you politically.

A second presidential advantage is that the nation's most powerful corporate executives, normally the allies of Republicans, have been imploring the GOP to stop playing these games. McConnell blinked first after dozens of CEO's emerged from a White House session to meet with Republican leaders and request them to stop fooling around with the nation's solvency, and nearly 500 signed a letter demanding action.

But the big disadvantage is the president's own penchant to be the Conciliator-in-Chief. When the opposition party has lost all sense of reason, a leader has a duty to say so, and not to keep splitting the difference.

The stakes are so high that Obama can probably win this one without giving away the store. As the deadline comes closer, the Republicans will have to shift ground. The question is whether he will needlessly give up much of Social Security, Medicare, and the resources he needs to pull the country out of recession, along the way.

As often has been the case, Obama's lack of spine puts his own party in a difficult spot. So far, the Democrats' Congressional leadership, from Reid and Pelosi on down, have done a courageous job of saying to Obama: No Social Security and Medicare cuts, no way. But if the Republicans suddenly agree to a deal and Obama tells the Democrats that his presidency and the country's solvency are on the line, what will they do then?

If 2012 is not to be a blowout, Congressional Democrats and base progressive organizations will need to be even firmer with their president. At times, the labor leadership has warned the White House that failure to deliver a jobs program and a cave-in on Social Security and Medicare will mean rank and file activists campaigning for Democratic House and Senate candidates but not going all out for Obama. That message -- from all of the progressive forces that helped elect Obama -- needs to be even more pointed.

We need to get this budget fight behind us, so that the President and other Democrats can begin talking seriously about jobs, economic recovery, and saving the middle class. The more fiscal resources Obama gives away as part of a budget deal, the harder that shift will be.


Robert Kuttner is co-editor of The American Prospect and a senior fellow at Demos. His most recent book is A Presidency in Peril.

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