If there were any lingering doubts about whether President Obama got the memo on the midterm elections, they were resolved on Monday when the White House released its fiscal 2012 budget. Conservatives and Republicans certainly had much to fault, but it was the Democratic base that wasn’t feeling the love on Cupid’s day.
Obama’s budget may not recommend the deepest domestic spending cuts by any Democratic president in history, but it comes close. It is an austere budget, one that marks a reversal of some White House positions just a few months old.
Although Obama and congressional Republicans are miles apart over spending reductions and budget priorities, the disagreement for once isn’t whether the growth in government spending should be cut, but by how much. To be sure, most Democrats in Congress probably find little in the budget to cheer about, but this document isn’t about them. It is a budget drawn to continue Obama’s pivot away from the perceptions that were pervasive in last fall’s campaign: that he is a classic big-spending liberal out of sync with a new world order in which the public is increasingly skeptical about the role of government, worried about spending, and concerned about our nation’s financial well-being.
The budget does not feature the draconian spending cuts that many Republicans and deficit hawks feel are essential. But it recognizes that restraint is the order of the day and a key to getting the president reelected.
It is not hard to imagine a magic number in the upcoming negotiations over budget cuts, a deficit-reduction figure that is more than what the president has recommended and far more than what most congressional Democrats want, but is considerably less than what the House GOP is seeking. That’s called compromise, and that is what voters want.
Observing Americans’ intense emotion and anger about the growth in government spending, it’s clear that they see this budget-cutting process as very straightforward. Hence, their frustration that it has not happened. If you believe that the federal budget has a line item for waste, fraud, and abuse, of course you are angry when Washington doesn’t just zero it out. If you believe that frugality in government—cutting the number of bureaucrats and being smarter about management—will balance the budget and that worthless programs are bloating the bottom line, no wonder you get hot under the collar.
If tax increases are verboten, then the debt problem isn’t going to be fixed.
The problem, of course, is that all of those savings, even if real, are chump change. It’s the big-ticket items, programs that are either near and dear to millions of Americans’ hearts or central to our national security, that drive the lion’s share of the deficit problem. If zeroing out all discretionary domestic spending won’t balance the budget; if trimming Medicare, whose recipients typically receive far more in benefits than they pay in, is off the table; if significant reductions in spending on our nation’s defense are off limits; if tax increases are verboten; then the debt problem isn’t going to be fixed.
Democrats are good at raising taxes, and Republicans are good at cutting spending. Democrats are also good at keeping spending cuts from going too deep, and Republicans are good at keeping taxes from going too high. If both parties are doing their best, there is a magic equilibrium that makes for good and balanced public policy. That didn’t happen over the last decade.
The coming fight over raising the debt ceiling will require the legislative and political delicacy of brain surgery. Republicans, particularly those of the tea party variety, are loath to vote for a debt-limit increase, and Democrats are in little mood to help out. Obama and the Republican leaders in Congress all know that it is essential to the country to get it done and prevent a default on government debt. If each party is expected to produce about half of its members to support a debt-limit increase, each party will have to compromise.
Thus, Obama has to listen to House Speaker John Boehner, Senate Minority Leader Mitch McConnell, and the rest of the GOP leadership to determine what it will take to get half of the Republicans on board. The president also needs to listen to the Democratic congressional leaders to figure out how they can get half of their troops on board.
Given that the two sides are miles apart, this will be a herculean task; it could result in another series of roller-coaster days like those following the 2008 collapse of Lehman Brothers, when the House first rejected passage of the Troubled Asset Relief Program, and the Dow Jones industrial average plummeted 788 points in one day.
This article appears in the Feb. 19, 2011, edition of National Journal.