There He Goes Again

I have a friend who can be guaranteed to wax lyrical about anything Barack Obama does.

Me? Not so much. I have never been a big fan. I look at him as being the least worst option. Good on a few social issues, making a start on health care, botching bank reform [horribly], and generally allowing the Republicans to lead the way on the economy.

I think what vexes me most is his perpetually odd negotiating style. He stakes out the middle as his first move. No wonder I feel as if he concedes too much. He does.

From a different perspective Obama’s constant outreach to the GOP makes more sense: he agrees with them in principle of some important issues. He has major disagreements on things like gun control and gay rights, but on the economy he is remarkably centrist. Indeed in some ways he is just right of center. And he still can’t get a deal done.

I bring this up because today we started to get a solid read on his budget proposals. He is due soon to announce them more formally and so the current spate of leaks seems positioned to draw the sting out of opposition from the left.

Why is this necessary?

Because he seems set to keep up his futile search for what is called  a “grand bargain”, or a deal that would settle fiscal policy for a long while. That we have no such deal so far is easily explained: the Republicans don’t want one. Or, rather, they don’t want a deal with revenue – aka tax – increases in it. This has been the stumbling block all along and will remain so. It took enormous and dangerous brinkmanship to squeeze a tax increase on the very top income earners out of the recalcitrant right wing of the GOP, and the prospect of getting amore general revenue increase is dim to say the least. I still look at the last deal as a failure for Obama – he surrendered most of the Bush tax cuts in order to get minimal gains elsewhere. Now he seems set to trade away cuts in entitlements in a vain attempt to get what he already had: more revenue.

He already had it because if he had simply sat on his hands and allowed the Bush tax cuts to expire, as the law required, revenues would have jumped. He could then have traded from strength. Instead he gave away the same revenue he now wants to recapture. And in order to accomplish this he will have to give away even more. Namely those cuts to entitlements.

I realize that the political circumstances are tough. The Republicans are dug in and dogmatic. They want to hold us all to ransom. But why, then, seek a deal?

The deficit is already shrinking. Rapidly as it turns out. And of its own accord. Much of it was cyclical and will go away as the economy improves. Many of us have been predicting this all along. There is no need to settle long term fiscal policy issues at the moment. Especially in the face of an intransigent opposition. That opposition guarantees that Obama will be forced to give away far too much, right at a time when the winds are blowing in his favor.

Worse: his bungled attempts at getting a ‘grand bargain’ have led us along a path resulting in the sequester that is now adding to the cyclical deficit reduction already underway. Both the cyclical reduction and the sequester are acting to slow the economy down. The GDP growth prospect already looks slim for later this year. So what is Obama’s economic plan? To seek a ‘grand bargain’ that would slow us down even more.

This all annoys me no end.

Obama is setting out to strike a deal we don’t need  by trading away entitlement spending that doesn’t need cutting. If this sounds perverse, it is.

So why do it?

The only explanation I can offer is that Obama is just as deeply influenced by the false god of austerity as everyone else in Washington. He is dancing to the Republican tune because he happens to agree with them. In his mind there seems to be an urgency, unjustified by the facts but justified within Washington’s alternative universe, to cut government spending even if this means betraying hallowed left of center principles. Clearly he feels forced into this betrayal. Perhaps he imagines himself as being responsible. My friends who support him keep telling me that he is saving entitlements from deeper cuts. Maybe, but I don’t think so. That rather defensive posture is sound only if you buy the idea that our economy is so permanently impoverished that we can no longer afford those programs. But there is no evidence to support this. Not outside Washington. It is a right wing myth spread about by think tanks and echoed by the media. Besides, does anyone truly think the GOP will suddenly stop its seven decade long campaign to abolish Social Security? Of course not. Any concession made now is a permanent one. It will not be undone.

Obama is appeasing the extremists. He will fail.

And it is an enduring shame that a president elected largely by those who will suffer the most from budget cuts is offering up a budget riven through with such cuts. All without trying to go after those who got us all into this mess to begin with.

Why did we have that election then?