President Barack Obama took a page out of the GOP playbook Friday, using his press conference to push for steep deficit reduction measures to be included in a deal to raise the debt limit.Calling for spending cuts to everything from defence to Medicare, Obama also demanded new revenues be included through tax reform and the elimination of corporate subsidies.
The president said he is hopeful that he and congressional leaders can reach an agreement on the so-called grand bargain, telling reporters with a laugh, “I always have hope — don’t you remember my campaign?”
But he may be one of the few people in Washington who thinks a “big deal” stands any chance of coming to fruition.
Speaker of the House John Boehner — an early champion — abandoned the proposal last week, while Senate Majority Leader Harry Reid has begun working with his Republican counterpart Sen. Mitch McConnell to devise a significantly smaller agreement.
But more telling than Obama’s seemingly blind optimism that a deal can be made, is his insistence that a deficit reduction package be included in the first place.
In May, Obama’s position was that the borrowing limit be raised “clean” as a standalone bill, with actions taken to reduce the deficit included in his budget plan. Republican lawmakers jumped on the Obama’s statements as fiscally irresponsible.
Now the tables are turned, with Obama unwilling to accept the McConnell proposal, which would raise the debt limit and deal with most of the spending cuts later.
For Obama, the debt ceiling showdown is proving a defining moment in his presidency, that could either pave the way for his reelection next year or make him a one-term President. Fittingly, he is adopting the tactic of triangulation — the too-hot, too-cold, just-right strategy that gave President Bill Clinton his second term.
Obama could just as well have endorsed the McConnell/Reid plan, taking small mutually agreed to spending cuts now, while pledging to do more later this year. But he didn’t take the easy way out, calling it his least-preferred option.
As Republicans align themselves as the party of indiscriminate cuts through a balanced budget amendment and congressional Democrats rush to defend entitlements, Obama is positioning himself as the voice of reason in the talks — willing to buck even his own party to reach a compromise.
His demands for greater deficit reduction are a high-risk, high-reward wager to out-cut Republicans — he was among the first to float a $4 trillion deal — while being seen to make a bipartisan agreement of historic proportions.
For that reason, even if he is forced to accept a smaller deal to avoid default on August 2nd, Obama is likely to continue to push for the “big deal” later this year.
But Republicans don’t want to give Obama the victory — or accept any new revenues — and they do so at their own peril.
First and foremost, the credit rating agencies want a “big deal.” Standard & Poors threatened the nation’s AAA rating even if the debt limit is raised, if drastic actions to reduce the deficit are not taken.
Obama’s message also seems to be taking with the general public, helped along by multiple presidential press conferences and statements on the subject in recent weeks. Two-thirds of Americans — and even 44 per cent of Republicans — support raising revenues as part of a deficit deal.
While failure to reach a grand deal after Obama has staked so much on it would be a high-profile embarrassment for the president going into an election year, it would also give more ammunition to Democrats asserting Republicans are too radical to govern.
It’s too soon to tell whether Obama’s grand gamble will pay off, but his pursuit of the “big deal” will make or break the debt ceiling talks — and his presidency.
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