Obama's Deficit Reduction: A Campaign Document, Not a Policy Plan

After a day, I think it's safe to say that the response to Obama's deficit reduction package has been rather hostile on the right.  David Brooks sounds positively anguished:

I liked Obama's payroll tax cut ideas and urged Republicans to play along. But of course I'm a sap. When the president unveiled the second half of his stimulus it became clear that this package has nothing to do with helping people right away or averting a double dip. This is a campaign marker, not a jobs bill.

It recycles ideas that couldn't get passed even when Democrats controlled Congress. In his remarks Monday the president didn't try to win Republicans to even some parts of his measures. He repeated the populist cries that fire up liberals but are designed to enrage moderates and conservatives.

He claimed we can afford future Medicare costs if we raise taxes on the rich. He repeated the old half-truth about millionaires not paying as much in taxes as their secretaries. (In reality, the top 10 percent of earners pay nearly 70 percent of all income taxes, according to the I.R.S. People in the richest 1 percent pay 31 percent of their income to the federal government while the average worker pays less than 14 percent, according to the Congressional Budget Office.)

This wasn't a speech to get something done. This was the sort of speech that sounded better when Ted Kennedy was delivering it. The result is that we will get neither short-term stimulus nor long-term debt reduction anytime soon, and I'm a sap for thinking it was possible.

Yes, I'm a sap. I believed Obama when he said he wanted to move beyond the stale ideological debates that have paralyzed this country. I always believe that Obama is on the verge of breaking out of the conventional categories and embracing one of the many bipartisan reform packages that are floating around.

But remember, I'm a sap. The White House has clearly decided that in a town of intransigent Republicans and mean ideologues, it has to be mean and intransigent too. The president was stung by the liberal charge that he was outmaneuvered during the debt-ceiling fight. So the White House has moved away from the Reasonable Man approach or the centrist Clinton approach.

My take on this plan is about the same as last week: it's not a serious plan for deficit reduction, but a political move.  With his poll rankings falling, Obama has clearly decided that his hope lies in rallying his progressive base and making the GOP look bad, rather than actually passing a jobs bill.

We can argue over whether he's been forced to this by those darned intransigent Republicans, but really I'd rather not; the debate tends to move along well-worn ruts, more defined by one's prior feelings about the awfulness of Republicans and the fundamental reasonableness of the things they won't vote for, than any particular facts that can be marshaled to the debate.

Whatever your opinion about Republicans, the president has produced a plan that is not designed to pass the House.  It's also not really designed to particularly reduce the budget deficit--as Lori Montgomery's piece in the Washington Post makes clear, most of the deficit reduction comes from gimmicky changes in the baseline: assuming that war spending will continue at last year's high levels, and assuming that the Bush tax cuts for the affluent would have been extended indefinitely.  If you take away those two assumptions, somewhere between $1.5-$2 trillion worth of deficit reduction evaporates.

In fact, I'm not clear on what exactly it's supposed to do.  There are big cuts in health care reimbursements, particularly those for drugs, which generate about $500 billion in savings, but don't seem particularly well structured: layering more cuts on top of the cuts which haven't taken place yet seems like a recipe for large unintended consequences.  There are cuts to agriculture and various land-use stuff that don't raise much money, and yet also will anger some pretty militant constituencies.  There are various complicated tax changes that Obama promises will some how make the tax code simpler.  The lengthy laundry list seems like it came out of the mind of some good-government wonky type who hates ag subsidies on principle--but since it's not going to pass, why bother with this list of fiddling program changes that can be used against you in 2012?

Since I'm one of those good-government wonky types, there's a lot in here for me to like.  (The stuff I don't like is, predictibly, many of the tax code changes and the heavy focus on slashing drug prices--both of which seem to have been chosen more for the unpopularity of targets like drug companies, oil and gas firms, and "millionaires and billionaires" than any coherent policy vision).  The problem is, things I like do not make very good election strategies.  It is nearly a cardinal rule of American politics that if Megan McArdle likes your policy plan, it will go down in the Senate 95-0, and end with a fumbling recantation on Meet the Press.

These sorts of laundry lists aren't merely bad electoral tactics; they may actually bad politics.  Obama now has, by my count, approximately one squintillion lobbies who would need to be defeated in order to make his plan a reality.  That's a lot of political capital to get $4.2 billion out of durable medical equipment manufacturers and $5 billion out of the owners of corporate jets.

So it doesn't seem like a very good plan, if what you want is a bill that will actually pass and maybe attract independents.  On the other hand, it seems to be making his base happy, and I gather from this sudden lurch leftward that Obama feels they're more important to his reelection prospects--or at least, more gettable--than center-right folks like David Brooks.  I can't really blame him.  But I'm still kind of irritated that I've wasted all this time watching his speeches about never-never proposals.