June 23 (Bloomberg) -- Liberals rejoiced when President Barack Obama dismissed his fiscal commission with a perfunctory pat on the back. They had taken to calling it “the cat food commission” in honor of its proposed cuts to Social Security and Medicare. They wanted Obama to go public, give his trademark speeches, make the pro-government case that they hoped would break the anti-government wave.
Conservatives, meanwhile, were outraged. Republican Representative Paul Ryan blasted the president for having ignored the commission’s recommendations -- never mind that Ryan had served on the commission himself and voted against its final recommendations.
Both sides misjudged the playing field. In retrospect, it’s clear that the report produced by the commission, chaired by former Senator Alan Simpson and Democrat Erskine Bowles, was a much better deal than liberals are now likely to get. And the president’s rejection of the Simpson-Bowles report won’t, in the end, prove so vexing to conservatives after all. Instead, it will clear the way for a deal that conservatives will much prefer.
To understand how far -- and how fast -- the goal posts have moved, consider the budget the president proposed in April. At first blush, this deficit-reduction plan resembles Simpson-Bowles, albeit with a few more progressive elements. But upon closer inspection, it becomes apparent that it falls far to the right of the report. Most significantly, Obama’s budget would cut $600 billion less from defense while raising $450 billion less in taxes. That’s a trillion-dollar retreat on liberals’ top budget priorities.
Having routed the White House, you would think conservatives would have cheered their own victory. Not so much. Ryan, who is chairman of the House Budget Committee, instead hammered the president’s move toward lower taxes and smaller defense cuts. “When the president is ready to get serious about it,” he said, “we’re going to be here working.”
Ouch. Of course, Republicans were always going to treat Obama’s proposal as the far left end zone of the debate. What’s puzzling is that the president opted to treat Simpson-Bowles as the left end of the debate, rather than as the center. And he did this even after the release of Ryan’s budget, which wrenched the discussion further to the right than anyone had imagined possible just a year before.
Framing the Debate
Privately, White House officials protest that they didn’t mean for things to turn out this way. Ryan released his budget plan before they had laid the groundwork for their own. The White House never had a chance to frame the deficit-reduction debate on its terms.
Even so, White House officials say that Ryan ended up helping their cause. His plan to privatize Medicare using private insurance vouchers is wildly unpopular. Democrats across the country are licking their chops at the prospect of running against the House Republicans who voted for it before its political toxicity became clear.
Yet any future Democratic political gains will come at a steep policy cost. With current budget negotiations defined by Ryan’s plan on one side and Obama’s on the other, the final agreement will fall well to the right of the Simpson-Bowles recommendations.
Administration officials don’t disagree with this analysis; they merely argue that it was inevitable. Republicans won’t agree to tax increases and won’t lift the debt ceiling without deep spending cuts. What were they to do?
True enough. But what if Obama had embraced Simpson-Bowles right off the bat, announcing that Vice President Joe Biden would chair discussions with congressional leaders using Simpson-Bowles as their starting point? One possibility is that Republicans would have said no. But in practice, they’ve been unable to do that.
After filibustering Senator Kent Conrad’s proposal to create the fiscal commission, Republicans served on it anyway. When Obama called for talks on the Bush tax cuts, averting a government shutdown, and the debt ceiling, Republicans showed up.
By and large, these negotiations have worked. Virtually every time Republicans and Democrats have come together in a secluded room, each side has emerged remarking on the seriousness and flexibility of the other. The December 2010 tax deal that the parties struck included more stimulus than the Democrats had thought possible and more tax cuts than the Republicans had deemed probable.
Even now, with the terms of a debt-ceiling deal uncertain, individual negotiators can’t stop remarking on how much more productive discussions are inside the room than outside.
The past year of American politics has revealed that the two parties tend to be far more reasonable in private than they are able to be in public. When they go public -- as Republicans did with the Ryan budget -- they have to play to their respective bases and commit to positions that make a deal harder to reach politically and worse substantively.
Back in December, when the Simpson-Bowles commission issued a strong foundation for negotiations on long-term deficit reduction, it might have been better had the nation’s political leaders just adjourned to a cozy room instead of to the national stage.
(Ezra Klein is a Bloomberg View columnist. The opinions expressed are his own.)
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