Fiscal conservatives around Obama have sold the president on the idea that nipping and tucking Social Security and Medicare is an easy way to get a lot of money, and doing it by the backdoor will entail a lower political cost to him. So far, he seems to have been proven wrong on all three assumptions. The Republicans haven't given an inch, the $270 billion in cuts undertaken so far this year under the January budget deal and the March sequester have cut the growth rate in half, and he is alienating core Democratic constituencies. One unanticipated benefit of Obama's stance is new, explicit pressure on Democratic House and Senate members, as well as candidates considering running for president in 2016, to pledge not to cut Social Security and Medicare. It would be so much better if this Democratic president were behaving as a progressive leader right now.
The Republican bargaining habit is well-established -- take Obama's "final" offer as the new starting point and demand further concessions. With this strategy, our president has let them take him to the cleaners for more than four years now, and is still hoping that sweet reasonableness will produce compromise. It never has and never will. If Democrats stand for anything, it is defense of Social Security and Medicare -- America's two most broadly beneficial and most beloved government programs -- and the president just gave away this last bit of product differentiation. In the past, Republicans have saved Obama from himself by refusing to consider any tax hikes. Now, I'm beginning to think, it's time for Democrats save him from himself. And the Democratic Party. And us.
It isn't Social Security and Medicare that are killing other social programs, but Republican refusal to support them. The ratio of public debt to GDP is roughly stable for the next decade. If we begin making cuts now, whether in Social Security and Medicare, or in other outlays, we will slow the recovery. That will only worsen the debt ratio over the long term, and at a depressed level of economic output. Republicans do resist higher taxes, but at times Democrats have prevailed in raising taxes on the rich -- with the full support of the voters. President Clinton managed it in 1993, and even President Obama, though he settled for too skimpy a bargain, got Republicans to vote for a $630 billion tax hike on the top one percent last January. Faced with a choice of cuts in Social Security and Medicare or tax increases on the wealthy, polls show that most voters opt for the taxes.
The sequester, and all the sequential sequesters over the next decade, deprive Democrats of the resources that they need to be, well, Democrats. Obama can proclaim big, bold initiatives as he did in the State of the Union Address, but they are all mere gestures -- because there is no money to spend on any of them, thanks to the bipartisan obsession with budget cutting. Even worse, Democrats end up colluding in eviscerating very popular and necessary signature programs like Medicare and Social Security, which literally define the core differences between the two parties. So by 2016, and even by 2014, nobody will much remember who was more at fault in the sequester battle of early 2013. The voters will be looking at their own economic situation, and it won't be pretty.