His "Grand Bargain" Is Dead;
Sequester Cut Is Here to Stay
Obama's biggest plan for the economy, his "Grand Bargain" that he has been working toward, with the Republicans, since at least four days before his first inauguration, essentially died on Sunday, March 17th, of 2013.
A top Senate Republican said then that trading cuts to Social Security and Medicare, for hikes on taxes that the middle class pay, would be acceptable to Senate Republicans. But the Republican House Speaker, John Boehner, said the same day that such a deal would never pass his chamber: "The president got his tax hikes on January 1. The talk about raising revenue is over." His chamber won't pass any tax-hikes at all, he said, on ABC's "This Week."
On "Fox News Sunday," Tennessee Republican U.S. Senator Bob Corker said, "I think that Republicans - if they saw true entitlement reform - would be glad to look at tax reform that generates additional revenues."
However, Senator Corker then went on to make clear, "That doesn't mean increasing rates, that means closing loopholes. That also means arranging our tax system so that we have economic growth."
To Republicans, "closing loopholes" in ways "so that we have economic growth" means (just as it did during Mitt Romney's campaign) to close only loopholes from which the middle-class (i.e., the non-rich) mainly benefit, such as the mortgage-interest deduction, but not to close loopholes from which exclusively the very rich benefit, such as the oil-depletion allowance and limited-partnership deductions. Democrats in neither the Senate nor House would support doing that, and President Obama has also said many times that he would not accept, but would veto, any such bill, if it ever arrives at his desk.
Putting this all together, then: either the Republicans or the Democrats would need to reverse their fundamental position and publicly accept defeat in order for the sequester-cuts to end. This would, of course, be extremely unlikely. For either Party to do it would be very damaging politically to whichever Party were to do it.
In other words: ending the sequester cuts would require virtual political suicide for whichever party caved, because there really is no achievable middle-ground here, not within a million miles. Democrats, clearly, won't accept the Republicans' type of tax-plan, and Republicans, now equally clearly, won't accept the Democrats' type of tax-plan. Consequently, Obama's goal of cutting Social Security, Medicare, and Medicaid, in order to fund the continuing Wall Street bailouts, is dead.
The sequester-cuts, effectively, should thus be considered to be the new federal budgetary "baseline," on which the Government's fiscal projections are based, because the old fiscal "baseline" projections, which were not using the sequester-cuts as their basis, are now clearly no longer realistic - if they ever were.
President Obama's "Grand Bargain," his grand fiscal goal ever since he was first elected President, is now all-but-officially his failed dream.
He has, in fact, been working actively for it ever since at least four days before his first Inauguration.
On 16 January 2009, America's voice of conservatism, the radio star and Fox "News" hero Rush Limbaugh, headlined his radio commentary "Limbaugh: I Hope Obama Fails," and he said: "I hope he fails. ... I disagree fervently with the people on our side of the aisle who have caved and who say, 'Well, I hope he succeeds. We've got to give him a chance.'"
Ironically, on the very same day that Limbaugh said this, Michael D. Shear headlined in the Washington Post, "Obama Pledges Entitlement Reform," and he reported about "a wide-ranging 70 minute interview with Washington Post reporters and editors," in which Obama endorsed efforts by conservative "Blue Dog" Democrats in the Senate to cut Social Security and Medicare. Progressives were already disturbed at what their friends in Congress were leaking to them about Obama's strong commitment to doing this, and so a few blog posts were issued to ring alarm bells publicly about it. Paul Rosenberg at openleft.com headlined on January 17th (three days before Obama's Inauguration), regarding "Obama's 'Mandate' To Slash Medicare, Medicaid & Social Security," and he presented polls showing that the public not only didn't want to cut any of these programs, but that 74% wanted Medicare and Medicare spending increased, and 62% wanted SS spending increased. Even 65% of self-declared "conservative" Americans wanted the medical programs increased, and 62% of them wanted SS spending increased. To Obama, his plan to cut Social Security, Medicare, and Medicaid, was an act of political courage. It was his long-term plan, even though the polls showed widespread opposition to it by the public.
So, when Rush Limbaugh on 16 January 2009 said "I hope he fails," Obama was already giving indications that he wanted to fail at least the expectations and desires of the public regarding 'entitlement' programs. However, most people, at that time, who had any opinion about Obama's Washington Post interview, saw it as mere political maneuvering, not as any serious indication of Obama's actual intentions: to slash those programs. For example, Steve Benen at the liberal washingtonmonthly.com headlined about the matter on January 16th "Entitlements," and he said "Obama's comments on the subject weren't troubling at all." Benen ignored the messages that were then flying around Capitol Hill saying that Obama was evidently determined to cut back on these programs, and that he was working behind the scenes with conservative Democrats and with Republicans in order to achieve this before 2012. Obviously, he didn't meet this goal.
Obama tried hard: On 20 July 2011, Tyler Durden at zerohedge.com headlined "Bipartisan Plan Summary Charts Confirm Key Deficit 'Cuts' Come From Imminent Social Security Pillage," and this conservative website expressed shock at how amazingly Republican this plan was, which Obama was trying to ram through. The "bipartisan" Obama had reached farther into Republican territory than Republican politicians had even dared. But Republicans stood firm in their demanding more tax-cuts for the super-rich. Congressional Democrats wouldn't stand for that.
Obama kept trying, and Republicans kept giving him more rope with which to hang his Presidency. On March 6th of this year, Rosalind S. Helderman of the Washington Post headlined major news, "House Votes to Fund Government Through End of Fiscal Year," and she reported that, "President Obama is focusing on wooing rank-and-file Republicans in the Senate who might be interested in a deal that would pair tax reform that produces new revenues with cuts to entitlement programs." Those "entitlement programs" are, of course, Social Security, Medicare, and Medicaid. There had just been a House vote, "passing a measure that funds the government through the end of the current fiscal year," so as to give congressional Republicans added time for using their threat of blocking a debt-ceiling increase, and of their thus driving the U.S. Government into default - on his watch, which will destroy his Presidency. Dragging out these negotiations this way will give Republicans the added time to force the ultimate tax-and-spend "deal" to end up their way: with little or no tax-hike on the rich. "The measure was approved by a vote of 267 to 151, with most Republicans supporting it and [by nearly 3 to 1] most Democrats voting against it." House Republicans wanted this measure to pass, and Obama wanted it to pass, because he thought that this added rope would increase the chance that he'd be able to get his "Grand Bargain" with them. He hadn't yet figured out that they weren't looking to postpone the time they'd accept his "Grand Bargain"; he still entertained the delusion that their first priority wasn't protecting every advantage that the mega-rich enjoyed. But congressional Democrats overwhelmingly did not want this measure to pass. Then, "After a series of phone calls from Obama to Republican senators who have expressed their interest in that kind of 'grand bargain,' he will take a group of senators to dinner Wednesday evening at the Jefferson Hotel." He wined and dined them, thinking that they'd come to see things his way. It failed.
Jim Vandehei and Mike Allen headlined at Politico on March 12th, "Missed Chance: Obama's Tax Problem," and reported that when the President had spoken with Republican House Majority Whip Kevin McCarthy on March 9th, Obama had, according to McCarthy, told him, "I listen to Paul [Ryan, who wants to slash Social Security and Medicare]," and, that, "Obama then said that if Republicans are going to get entitlement reform, 'You need me.'" This was his charm-offensive. Obama's message to the Republican Whip was that he actually did want to slash those programs, but that he wouldn't be able to do it unless Republicans would provide him the cover of raising taxes on the rich, as a supposed trade-off. He still couldn't figure out their priorities. He could never take no for an answer. He still dreamt of getting to yes with them.
This is what Obama has publicly referred to many times as his "balanced approach" and "shared sacrifice." As this link shows, he had announced at a press conference on 15 July 2011, that, "If you're a senior citizen, and a modification potentially costs you a hundred or two hundred bucks a year or more," then you should accept this cut, because "Congress has run up the credit card" paying the mega-banks in the Wall Street bail-out and to make up for the economic collapse from the 2008 Wall Street crash. So, "The least I can do is to say that people who are making a million dollars or more" (after their firms were rescued by the bail-out) will "have to do something as well. And that's the kind of tradeoff, that's the kind of balanced approach and shared sacrifice that I think most Americans agree need to happen."
It won't happen. President Obama's grand plan for the U.S. economy is dead.
We have the sequester instead.
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Investigative historian Eric Zuesse is the author, most recently, of They're Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST'S VENTRILOQUISTS: The Event that Created Christianity.