Obama Games the Grand Bargain Correctly

I agree with Scott Lemieux’s take on how the Obama administration handled negotiations over Social Security during the heyday of the Grand Bargain negotiations, although I am not so sure that I concur with his assessment of the political downside:

Until 2014, Obama’s budget proposals included an offer to reduce the growth of Social Security benefits by changing how the cost-of-living increase is calculated, in exchange for a deal including upper-class tax cuts. Obama, in other words, has not only dropped even contingent proposed cuts, but is also calling for an expansion of benefits. This is a big deal.

Admittedly, on a substantive level, it isn’t much different from his previous position. Tying “chained-CPI” Social Security cuts to upper-class tax cuts no Republican Congress was ever going to pass was an indication that Obama was not actually trying to cut Social Security. The idea was to propose “entitlement reforms” that Beltway journalists tend to love in a form that would ensure Republican rejection. I happen to think this was dumb politics—no special effort is required to make the Republican conference look rejectionist, and being even theoretically open to such cuts weakens the Democratic brand and diminishes the ability of Democrats to attack Republicans for going to war on Social Security. But there’s no reason to believe Obama had any particular commitment to cutting Social Security.

I get that there was some brand damage and lost opportunities to attack Republicans that resulted from pretending to be serious about using Social Security cuts to address the debt, but I think they were outweighed by Obama’s ability to say that he was bending over backwards, defying his base, and acting like the only adult in the room, and the Republicans simply would not reciprocate in any reasonable way.

You have to look at the alternatives available to Obama. He could have taken a maximalist oppositional stance, and rather than putting some concessions on the table simply upped the ante by saying that not only wasn’t the debt a problem, but that we needed to spend more on entitlements. But that would have come with a lot of political costs, and costs that could have imperiled his reelection. For starters, as Lemieux notes, the political media “tend to love” entitlement cuts, so defying them and going aggressively in the opposite direction would have riled them up and caused them to accuse the president of a lack of seriousness and an overly ideological bent. This would have mattered when the debate between Democrats and Republicans was being arbitrated in the press, and the distinction between the president’s openness to negotiations and the Republicans’ refusal to take ‘yes’ for an answer would have been lost.

It’s also easy to forget the political climate back then. After the rise of the Tea Party revolt and the 2010 midterm “shellacking” that the Democrats received, it wasn’t an easy sell to suggest that the Republicans had no mandate to demand cuts in spending. The president needed to acknowledge is some visible way that he had received the message and would work with the Congress the American people had foisted on him. Given his position back then, what better way was there to proceed than to offer the Republicans a deal that they ought to have gladly accepted, knowing all the while that they would never accept it?

That seemed a better play than bunkering down and acting defiant.

Yes, it angered the base and muddied the waters a bit, but it also quite possibly saved Obama’s presidency. And, in retrospect, the cost was minimal.

After all, the president is now making the same case that people wanted him to make back then. And, despite some earlier hesitancy, so is Hillary Clinton.

Martin Longman

Martin Longman is the web editor for the Washington Monthly and the main blogger at Booman Tribune.