article

07.05.11

Obama’s New Budget Strategy

With momentum building for a short-term budget fix, the White House is trying to head off a temporary deal. Daniel Stone on the president’s new strategy.

The daylight between President Obama and Capitol Hill Republicans over the debt ceiling would seem to be narrowing. But it’s not narrowing fast enough for the White House, so Obama took the podium late Tuesday for a televised statement on the interminable debt-ceiling talks.

The president seemed eager to say the negotiations had made progress over the holiday weekend and that further progress was in sight, but he was careful to curb expectations. “I don’t want to fool anybody,” Obama told reporters. “We still have to work through some real differences.”

The only real news involved the length of a possible compromise. Since Washington groggily returned from the July 4 weekend, one idea floating on Capitol Hill, assigned to no legislator in particular, was a short-term extension of the debt limit, with an agreement to return to the table after the Aug. 2 deadline to address the bigger cuts to spending on entitlements, domestic programs, defense, and tax breaks.

But whether the idea was a straw man to begin with, Obama batted it away, saying simply, “I don’t share that view” and they shouldn’t “kick the can” down the road. Spokesman Jay Carney repeated several minutes later that a short-term deal was off the table—for now. A White House official said one of Obama's goals in making the remarks was to swat down the idea before it gained too much traction.

The president’s frustration has been visible since his midday press conference last week, when he fired shots at Republicans for being stubborn, for procrastinating, and even for not spending enough time in Washington. Seeking to move negotiations along, Obama announced that he’d host a new round of talks at the White House over the next few weeks. He’d invite members of both parties, from both houses, for frank talks. But he tried to signal that his patience for posturing and hardened positions was nearing an end. “My hope is everyone will leave their ultimatums at the door, that we’ll all leave our political rhetoric at the door,” he said while looking up, having memorized the line.

With the early August deadline looming, Obama floated the term “two weeks”—which would land squarely on July 19—for a more appropriate timeline.

Obama took no questions following his five-minute statement. One of them, undoubtedly, would have been his response to top Republicans, including Senate Minority Leader Mitch McConnell (R-KY), who have taken issue with the White House's claiming it has already agreed to “trillions” in cuts. The difference is the “s”—the administration’s proposed slashing has topped only $1 trillion. Another would be why Obama isn’t willing to forgo sources of revenue as part of a deal, with an agreement to return later to amending the tax code and devising new corporate “fees” to raise money. Prior to the president’s remarks, several reporters wondered aloud why the White House repeatedly had turned down McConnell’s invitations to come to the Hill for impromptu discussions, the optics of which would likely have shown an Obama eager and willing to put ceremony aside for a deal.

House Speaker John Boehner (R-OH) rushed out a statement that cut through the aspirational talk to focus on the legislative reality. “The legislation the president has asked for—which would increase taxes on small businesses and destroy more American jobs—cannot pass the House, as I have stated repeatedly,” he said. “The American people simply won’t stand for it.” Boehner expressed a willingness to attend meetings with Obama, but the issue of taxes, and closing tax loopholes, appeared again to be a nonstarter with Boehner’s caucus.

With the early-August deadline looming, Obama floated the term “two weeks”—which would land squarely on July 19—for a more appropriate timeline, so as not to test the reaction of the markets. Repeating his claim from his conference last week, during which he referenced how early his daughters finish their homework, he shot down the idea of an eleventh-hour deal. “This should not come down to the last second.”

Odds are it won’t. Neither party would gain politically by seeing the U.S. default on credit obligations for the first time in its history. But between now and deal time, there’s still ample posturing to be done and electoral support to gain.

There are signs that Obama may be gaining the upper hand in this debate. David Brooks, The New York Times columnist often known as liberals’ favorite conservative, admonished House and Senate Republicans for their stubbornness in his Tuesday column. “If the debt-ceiling talks fail, independents voters will see that Democrats were willing to compromise but Republicans were not,” he wrote. “And they will be right.”