Political Animal


September 19, 2011 12:40 PM One ambitious White House plan, followed by another

By Steve Benen

Given what we’ve seen this year, it’s been tough to know what to expect from the White House when it comes to major policy showdowns with congressional Republicans. As recently as July, President Obama, seemingly desperate to strike a “Grand Bargain” with House Speaker John Boehner (R-Ohio), was willing to give away the store. Fortunately, the GOP refused to accept it.

So when it became clear the president would unveil a jobs bill and debt-reduction plan, we were left to speculate about how ambitious Obama was prepared to be and how willing the president would be to pick a fight over some of the nation’s most important issues.

The answers this afternoon are a lot clearer than they were a few weeks ago.

The American Jobs Act, recently unveiled to a joint session, was refreshingly bold and quite progressive. The president’s critics on the left feared he would aim low, fail to call for major new investments, and might even propose a regulatory moratorium. Those fears proved to be largely backwards.

Going into this morning’s speech on debt reduction, we saw a very similar dynamic, with fears that the Obama plan would cut Social Security and raise the Medicare eligibility age. And again, the president exceeded expectations.

President Obama on Monday called for $1.5 trillion in new revenue as part of a proposal to tame the nation’s rocketing federal debt and find more than $3 trillion in budget savings over a decade.

The proposal draws a sharp contrast with Republicans and amounts more to an opening play in the fall debate over the economy than another attempt to find common ground with the opposing party.

Combined with his call this month for $450 billion in new stimulus, the proposal represents a more populist approach to confronting the nation’s economic travails than the compromises he advocated earlier this summer.

“We can’t just cut our way out of this hole,” Obama said in a speech in the Rose Garden of the White House. “It’s going to take a balanced approach.”

Here’s an outline of the plan, along with the 80-page pdf sketching out the proposal in significantly more detail. The rough sketch is as follows: the White House plan would produce about $3.2 trillion in deficit reduction. When one includes the savings from the cuts achieved during the debt-ceiling talks, the total reaches $4.4 trillion.

About $1.5 trillion over 10 years would come from tax revenue, including new rates for millionaires and billionaires. From there, the administration intends to cut spending through drawing down the wars in Iraq and Afghanistan and changes to Medicare financing, with some additional savings from interest on the debt.

The “Grand Bargain” on the table in July this isn’t — and that’s a good thing. Clearly, there are provisions that will draw fire from multiple angles, but the point to keep in mind is the notion of shared sacrifice — the Republican approach exempts the wealthy from facing any new burdens at all, demanding that everyone else shoulder the costs. The White House refuses to accept this.

Given the larger political circumstances, it’s unlikely the president’s proposal will enjoy much support in the right-wing House, making this more of an opening salvo than a realistic legislative blueprint. But in some respects, that’s the most heartening part of the recent White House shift — Obama and his team aren’t playing by the same rules anymore. Indeed, they appear to have thrown out the old playbook altogether. More on the politics behind the plan shortly.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.


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  • Chris Gerrib on September 19, 2011 1:01 PM:

    Isn't this "4 trillion in cuts and 1 trillion in tax increases" exactly the same as the "grand deal?" Except now we're seeing it specifically broken out?

  • jjm on September 19, 2011 1:03 PM:


    He gave the GOP their 'head' for the first nine months of their tenure as majority in the House.

    And it netted them a 19% approval rating.

    Now he's taking charge of the direction of the country AND of the narrative.

    Brilliant. Keep it up!

  • DAY on September 19, 2011 1:04 PM:

    With appologies to Pete Seeger and the Book of Ecclesiastes; Let us raise our voices in song:

    To everything political there is a season,
    A time to govern, and a time to campaign.
    A time to break down, and a time to build up;
    A time to negotiate, and a time to KICK SOME REPUBLICAN ASS!

    Let the games begin. . .

  • c u n d gulag on September 19, 2011 1:22 PM:

    What DAY said!

    I think Obama picked the right amount at $1 million dollars, because that's an amount that may have even the dumbest f*cking bastard who always votes against his/her best interests pause for thought.

    Klem Kaddlehopper (boy, am I showing my age) may think he's in the top 2-3% of wage earners, but even he's not stupid enough not to know that he's a few 0's at the end of his bank account balance short of a million bucks

  • paul on September 19, 2011 1:25 PM:

    The fun thing about this from a horserace point of view is that the alternative at this point isn't "do nothing". It's "cut half a trillion from defense and add 3 trillion to taxes."

  • SYSPROG on September 19, 2011 1:36 PM:


    Ezra does a great job at explaining what is happening NOW compared to this summer. I don't really think Obama was 'desparate' on the Grand Bargain Steve, I think he thought there were 'reasonable' Republicans. If you want to complain that he was wrong on that, so be it but I don't think the WH is governing from 'desparation'...

  • Mimikatz on September 19, 2011 1:36 PM:

    I thinl that it is really not all of the rich, but a subset of very greedy very rich who are driving the GOP policies, such as the Walton family (Wal-Mart) and Mars candy heirs that drovemthe debatemon the estate tax, and the hedge fund guys driving things onnthe carried nterest loophole. I just heard Jack Bogle, founder of Vanguard, say that the 15% preferential rate for dividends is a bad thing because 70% of dividends go to non taxable entities and accounts, like pension funds and Retirement accounts. Of course, that means that ending these breaks will not raise as much money as one might think, but still, they are pretty nonsensical.

    Similarly, if the capital gains and dividend rates reverted to the ordinary income rates, as they were under Reagan's 1986 tax reform, then compensation would be adjusted. Other guests have said it is less important just what the Tax rates and regulations are than knowing what they are going to be so one could adjust to that.. Which suggests that the GOP either doesn't know what they are tqlking about or are pandering to really a pretty small sliver of the top 1%.

    Either way, it is a fight Obama can win if he shows some persistence and if the Congressional Dems will back him up.

  • DAY on September 19, 2011 1:36 PM:

    John Bogel (founder of Vanguard) said a few moments ago, on CNBC, that dividends and capitol gains should be taxed the same as ordinary income.

    Adding insult to injury on a mostly Republican watched channel, he did not take credit for the idea- he gave that instead to the POTUS, in 1986. . .

  • DAY on September 19, 2011 1:40 PM:

    Boy, that Mimikatz- faster typer, better speller, and remembers all the little details!

  • Ladyhawke on September 19, 2011 1:42 PM:

    And to think the mainstream media was obsessing about the "OPTICS" of President Obama taking a 10 day "working vacation" in Martha's Vineyard. You can be they were working on the American Jobs Act.

    President Obama has dealt with Tripoli, an earthquake, hurricane Irene, joint session of congress to present the American Jobs Act, he has taken the AJA to the American people in Virgina, Ohio, and North Carolina. And today he presented (as promised) his debt reduction plan.

    This is one of the hardest working presidents I have seen. And I can just imagine that his staff is exhausted from putting in long hours. The roll out of the AJA has been flawless with amazing supporting documentationat whitehouse.gov.

    Now President Obama will be dealing with foreign affairs at the United Nations. A speech to the General Assembly and at the Clinton Global initiative.

    The next time President Obama plans to take a few days off to get some well deserved rest, I still expect the mainstream media to wring their hands about the 'OPTICS". They just can't help themselves.