Advertisement

Deal, or No Deal

Deal, or No Deal

By Michael Gerson - June 17, 2011

WASHINGTON -- The most consequential recent political debate did not take place in New Hampshire. It is being held at Blair House, where Vice President Biden is convening bipartisan negotiations for an increase in the debt limit. Biden, by most accounts, is conducting those talks fairly. House Majority Leader Eric Cantor describes them as "constructive." Important, if true.

For the first time, Senate Republicans describe to me the outlines of a possible deal: a package of immediate and specific budget cuts; budget caps reaching out five years to reassure conservatives that tough budget decisions will be made in the future; Medicare reforms short of the House approach; no tax increases -- a Republican red line -- but perhaps additional revenue from the elimination of tax expenditures.

Senate Minority Leader Mitch McConnell seems particularly intent on reaching a Medicare agreement different from Rep. Paul Ryan's proposal. An incremental approach would allow Republican senators to say they confronted the problem, while also allowing them to distance themselves from the unpopular House plan.

President Obama, in turn, is presented with one of the largest decisions of his re-election campaign: Deal, or no deal?

The easiest, most obvious political path would be to put on the appearance of negotiations, to wait until the end of the process, to put a significant (but not dramatic) package of budget cuts on the table, and to dare Republican lawmakers to destroy the credit of the country by rejecting it.

But the dismal economic news of the last month may change this political calculation. It is far easier to defend a slow recovery than it is to defend a stalled recovery. And a second economic dip would be a mountainous obstacle to a second term. Obama may require an economic strategy beyond Medicare scare tactics.

Linking arms with House Speaker John Boehner and McConnell in a grand budget deal -- complete with East Room signing ceremony -- would at least have a chance of changing Obama's economic narrative. He would demonstrate that he can work with Republicans. Serious deficit reductions might build his credibility with independents. And Obama might buy a period of patience on the economy.

Democratic leaders recently declared Medicare reform off the table. Senate Majority Leader Harry Reid described the protection of this entitlement as "our top priority." Such a warning shot, however, would not have been necessary unless the Biden group was contemplating Medicare reform. Reid's message was directed not at Republicans but at the administration. Clearly some Democrats don't want to be disarmed of their Medicare club, even by incremental reforms.

1 | 2 | Next Page››

Copyright 2011, Washington Post Writers Group

With Obama Back, Faceoff on Immigration Looms
Alexis Simendinger · November 17, 2014
Obama Touts Economic News as He, GOP Leaders Meet
Alexis Simendinger · November 8, 2014
An Obama-Republican Governing Alliance? Unlikely.
Alexis Simendinger · November 5, 2014

Michael Gerson

Author Archive

Follow Real Clear Politics

Latest On Twitter