Amid demands from Republicans that
President Obama propose detailed new spending cuts to avert the year-end fiscal crisis, his answer boils down to this: you first.
Mr. Obama, scarred by failed negotiations in his first term and
emboldened by a clear if close election to a second, has emerged as a
different kind of negotiator in the past week or two, sticking to the
liberal line and frustrating Republicans on the other side of the
bargaining table.
Disciplined and unyielding, he argues for raising taxes on the wealthy
while offering nothing new to rein in spending and overhaul entitlement
programs beyond what was on the table last year. Until Republicans offer
their own new plan, Mr. Obama will not alter his. In effect, he is
trying to leverage what he claims as an election mandate to force
Republicans to take ownership of the difficult choices ahead.
His approach is born of painful experience. In his first four years in
office, Mr. Obama has repeatedly offered what he considered compromises
on stimulus spending, health care and deficit reduction to Republicans,
who either rejected them as inadequate or pocketed them and insisted on
more. Republicans argued that Mr. Obama never made serious efforts at
compromise and instead lectured them about what they ought to want
rather than listening to what they did want.
Either way, the two sides were left at loggerheads over the weekend with
less than a month until a series of painful tax increases and spending
cuts automatically take effect, risking what economists say would be a
new recession.
Mr. Obama refuses to propose more spending cuts until Republicans accept
higher tax rates on the wealthy, and Republicans refuse to accept
higher tax rates on the wealthy while asking for more spending cuts.
“I’m puzzled why Republicans are locking into a principle that’s not
sustainable and why Democrats aren’t taking the moment to put forward
their own vision of entitlement reform,” said Peter R. Orszag, a former
White House budget director for Mr. Obama.
Mr. Orszag’s former White House colleagues said they had grown tired of
making unilateral concessions only to see Republicans moving the goal
posts, as they see it. “The president is not going to negotiate with
himself,” said Dan Pfeiffer, the White House communications director.
“He’s laid out his position, and Republicans have to come to the table.”
Republican strategists argue that in resorting to campaign-style events
to take his fiscal message to voters, Mr. Obama is overplaying his hand,
much as President George W. Bush did after his re-election when he
barnstormed the country in favor of a
Social Security restructuring plan that he never successfully sold to leaders on Capitol Hill.
“He is overreading his mandate,” said John Feehery, a former adviser to
top House Republicans. “By doing the campaign thing, he is making the
same mistake Bush made in 2005.” Eventually, he said, Democratic and
Republican leaders “are going to cut the deal, and Obama is going to be
on the outside looking in.”
The difference might be that Mr. Obama ran more explicitly on the idea
of letting Mr. Bush’s tax cuts expire for incomes over $250,000, while
Mr. Bush’s re-election was fought more on grounds of national security
than Social Security. But both presidents emerged from relatively narrow
popular-vote victories determined to impose their will on a balky
Congress resisting their leadership.
Mr. Obama seemed to defy the Republican House last week when Treasury
Secretary Timothy F. Geithner delivered a plan calling for $1.6 trillion
in additional taxes from the wealthy over 10 years, as well as $50
billion in short-term stimulus spending and $612 billion in recycled
cuts first put on the table during last year’s failed debt talks.
Republicans erupted in outrage, though they produced no specific
alternative. Instead, they noted they had expressed newfound willingness
since the election to increase tax revenue by limiting deductions for
the wealthy, though not by raising rates.
The administration laid out its latest plan in less formal ways a couple
of weeks earlier, according to a senior official who declined to be
identified discussing private deliberations. But the message was that
Speaker John A. Boehner could not move yet. After waiting with no
further response, the administration decided to have Mr. Geithner
deliver the proposal on paper knowing it would be provocative but
thinking it was needed to move the process along.
Instead, the process has collapsed, at least for now. The depth of
disagreement played out on the Sunday morning talk shows, even as Mr.
Obama went golfing with former President Bill Clinton in a session that
White House officials presumed would include trading notes about the
fiscal crisis.
“We’ve put a serious offer on the table by putting revenues up there to
try to get this question resolved,” Mr. Boehner said on “Fox News
Sunday.” “But the White House has responded with virtually nothing. They
have actually asked for more revenue than they’ve been asking for the
whole entire time.”
Mr. Geithner said it was up to Republicans to outline more spending cuts
than Mr. Obama had previously put on the table. “Some Republicans
apparently want to go beyond that, but what they have to do is tell us
what they’re prepared to do,” Mr. Geithner told Bob Schieffer on “Face
the Nation” on CBS. “And what we can’t do, Bob, is sit here trying to
guess what works for them.”
That represents something of a shift for Mr. Obama, who did try to guess
what worked for Republicans in his first term. When he crafted a
stimulus spending program to bolster the economy shortly after taking
office, Mr. Obama devoted roughly a third of the money to tax cuts that
he assumed Republicans would like. They did not. Likewise, his framework
for universal health care included free-market elements that he thought
Republicans would embrace. They did not.
While Republicans argued that the overall programs overshadowed any
palatable aspects, Mr. Obama came to believe he had made a mistake in
offering concessions up front. In an interview in September 2010, he
said he had learned “that if you already have a third of the package as
tax cuts, then the Republicans, who traditionally are more comfortable
with tax cuts, may just pocket that and attack the other components of
the program.”
Aides said Mr. Obama came to the same conclusion after his clash with
Republicans over raising the nation’s borrowing limit last year. “We put
all these things on the table, and the reason we couldn’t do a deal is
because Republicans couldn’t do revenues,” Mr. Pfeiffer said. “So our
view here is the president won’t sign a deal that doesn’t have higher
rates for the wealthy. Until they cross that bridge, nothing else is
relevant.”
Yet there is risk in that. Republicans now understand that higher tax
rates on the wealthy is Mr. Obama’s No. 1 priority, so rather than give
in, some strategists say they should hold out to leverage those to shape
other aspects of a final deal.
“He only cares about one detail: raising rates on the top two brackets,”
said Tony Fratto, a former White House and Treasury Department official
under Mr. Bush. “Everything else is secondary. That’s why if that is
going to happen, it will be last if Republicans can hold out. I think
it’s pretty clear Obama will sacrifice just about anything to get that.
It’s the only win for him.”
