Fiscal Cliff

11.22.12

Voters Become More Realistic Than Political Parties About Fiscal Cliff

Obama and the Democrats have treated entitlement reform like an untouchable third rail, but new polls indicate that the electorate is out in front of both parties when it comes to demanding real improvements. By Eleanor Clift.

The voters gave President Obama a second term, and now he’s counting on them to help him resolve the fiscal cliff in a responsible way. You’d think people would be weary of hearing about an economic issue that so far is all talk and no action. But a Pew Research Center survey found that more Americans followed the debate over the fiscal cliff more closely than they watched the sex, lies, and emails that led to the resignation of CIA Director David Petraeus, a testament to the public’s ability to sort through what most affects their own lives and pocketbooks.

Obama spent the better part of this year campaigning for a balanced approach to bring down the deficit. That means reining in the country’s most cherished entitlement programs—Social Security, Medicare, and Medicaid—in addition to raising taxes on the top 2 percent of households. A poll commissioned by Third Way, a moderate Democratic group, found that the coalition that elected Obama overwhelmingly backs a compromise that would include entitlement reform, a third rail that Democrats have long avoided touching.

The numbers reflect a new awareness even among liberals that the programs they feel are essential must be part of any grand compromise reached by Obama and the Republicans. Eighty-three percent of Obama voters say that reducing the deficit must be an important priority, and 79 percent say it would be better for Congress to address Social Security and Medicare than to do nothing.

Only 39 percent of Obama voters are concerned that the president will compromise too much with Republicans, which gives the president more flexibility from the voters than he is getting from the interest groups that represent them in Washington. The voters got the message that compromise is essential, but in Washington, the election results are being read by many Democrats as evidence that Obama should hold firm and resist any meaningful changes to Social Security, Medicare, and Medicaid.

“There is a discussion among the progressive groups in D.C. about the meaning of the election and whether it would be a ‘betrayal’ to touch entitlements,” says Jim Kessler, senior vice president for policy at Third Way. “According to this poll, these groups do not speak for the people who elected the president.”

The expectation is that the real faceoff is between Obama and the Republicans over taxes, but the president faces an equally daunting challenge to convince liberal groups that they too will have to yield. AFSCME, SEIU, and NEA—three powerful unions—launched an ad campaign this week in several states aimed at key senators calling for “Jobs Not Cuts,” urging that Medicare, Medicaid, and federal funds for education be protected. Much of this is standard procedure whenever any government program is threatened. The difference this time is that the stakes are higher. “You’ve got all the responsible parties seeking to get a deal,” says Kessler, “and then you’ve got groups on the left and right trying to scuttle it.”

Even the Democratic Party’s most left-leaning members no longer say entitlements are off the table.

That’s where Third Way comes in as the only Democratic leaning group that is actively working toward a major deal, or grand bargain. Beginning in August, Kessler and his colleagues visited 100 congressional offices on Capitol Hill, 90 Democrats and 10 Republicans, making the case for increased tax revenue, spending cuts, and entitlement reform. The individual members are not named but on the Republican side, says Kessler, they were “the usual suspects,” the handful of lawmakers who have worked across the aisle, and their sentiment before the election was, “If Obama wins, we’re licked on taxes.”

There is a new day dawning on the Democratic side as well, where even that party’s most left-leaning members no longer say entitlements are off the table, a sea change in partisan thinking. “I could be hallucinating,” Kessler concedes, but he finds the Democratic caucus moving toward acceptance of changes in the programs they hold dear, bolstered by an increase in moderate New Democrats. They went from 42 before the election to over 50, making them a quarter of the caucus and a potentially decisive voting bloc.

When he meets with lawmakers, Kessler cites Lyndon Johnson’s Great Society, which built the safety net, and John Kennedy’s New Frontier, which spurred innovation and sent a man to the moon, as critical benchmarks. In the mid '60s, when these programs came into being, federal investment outpaced spending on entitlements 3 to 1; in 2012, that ratio was reversed, and in 2020, the nonpartisan Congressional Budget Office says spending on entitlements will dwarf government investments 6 to 1. “Entitlements are eating up the entire budget,” says Kessler. “We used to do great things—we sent a man to the moon, we built the highway system, we cured major diseases, and really invested in kids. Now we do what we can. The safety-net programs are critically important, but we’ve got to figure out a way to afford the safety net we spent a century trying to create.”