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POLICY INSIGHT
BEYOND THE NUMBERS

Who’s Serious About Getting a Budget Deal?

In an attempt to reignite efforts to reach a bipartisan budget compromise, President Obama’s new budget will adhere to his final offer to House Speaker John Boehner of December 17 in their budget talks.  As a result, it will contain more savings in both Social Security and Medicare — both in the first ten years and beyond — than the House-passed Ryan budget.

The Obama budget contains major concessions.  It will include $400 billion less in revenue and $200 billion more in discretionary program cuts than Obama’s original offer to Boehner earlier in December.  It will also include the proposal to shift Social Security and various other cost-of-living adjustments to what’s known as the chained CPI, which was not part of Obama’s earlier offers to Boehner in December and which many Democrats strongly oppose.

Yet, while Obama is adhering to his final offer to Boehner, the Speaker has buried his offers to Obama.  His last offer to the President included $400 billion more in revenue than the President and Congress enacted at the start of January.  Now, both Boehner and other congressional Republican leaders say that any more revenues are unacceptable.

And, when the White House released major elements of Obama’s olive-branch budget on Friday, House Major Leader Eric Cantor said he was in a wait-and-see mode “as to whether this White House is really serious.”  That’s a stunning statement, considering that the House-passed Ryan budget includes smaller Medicare savings over ten years than Obama’s new budget will include, and it does not include the chained CPI or any other Social Security savings — and considering that the House budget’s only specific revenue proposals would cost $5.7 trillion over ten years, according to the Tax Policy Center.  Who is being serious here?

As the New York Times’ David Leonhardt recently pointed out, many in Washington tend to describe compromise as halfway between the budget positions of the two parties’ leaders, whatever those positions may be and even if only one party is compromising.  That would be particularly misleading in a situation like this — where the President confronts his political base with proposals like the chained CPI, which appalls many progressives, and takes a big step toward the Republicans in an effort to reach an agreement, but Republicans step farther away from him as they seek to placate their political base.

Last fall, Senate Minority Leader Mitch McConnell and Speaker Boehner described changes like the chained CPI and more means-testing of premiums for affluent Medicare beneficiaries as (in McConnell’s words) “the kinds of things that would get Republicans interested in new revenue.”  The new Obama budget includes both measures.  Yet, the Republican leaders’ response so far has been to insist that revenues are off the table and that the $400 billion in further revenues that Speaker Boehner offered in December is now unacceptable.

Further, the House budget would undo the sequestration budget cuts on defense programs, while more than doubling the sequestration cuts in non-defense discretionary programs — hardly a move toward the middle.

Moreover, if one sets up a playing field where the new Obama budget is one pole and the current Republican no-tax, deep-spending-cut position the other — and presents the halfway point between them as a logical compromise — the result is to ask President Obama and the Democrats to accept an outcome well to the right of Speaker Boehner’s offer in December. That won’t happen, and it shouldn’t happen if policymakers are to produce a fair and balanced package.

So, while Majority Leader Cantor has questioned whether the White House is serious, the real question is whether Republican leaders will be serious and be willing to take on their base, as Obama is doing with his new budget.