Why would someone threaten to make things a lot worse economically? It's like threatening the family that you will burn down the house unless you get what you want. It's extreme, divisive, destructive.
How lunatic-fringe do the House Republicans have to be before President Obama starts calling them out? These cuts have nothing to do with reasonable fiscal policy -- they are pure ideological retribution against government.
As Republicans and Democrats propose cuts in programs that actually benefit their constituents, they agree there's one area of the budget that's not to be touched: the annual $3 billion subsidy taxpayers provide to the Israeli military.
Obama clearly wants to score points with moderates and independents, but these are points that will likely never be tallied. Conservatives will never think he has cut enough, while progressives rightly deplore the ongoing "cavings in."
Democrats in the last Congress could have passed the 2011 budget, but they did not. They punted, leaving the door open for Republicans to do what they will with the budget for both this year and for FY 2012.
Obama is likely to lean more heavily on "reaching out" to Republicans. He knows full well that if anything legislative is going to get done in the next two years, Republicans are going to have to be on board.