President Obama's budget will include cuts to Medicare and Social Security and tax increases. This does not change what Obama was offering Republicans — he offered the same thing during fiscal cliff talks last fall — but it does mean pundits will declare he is offering a serious budget for serious times, DOA or not.
House Speaker John Boehner rejected a deal to cut entitlements in December because Republicans oppose raising taxes. But the Republican strategy has been to deny that Obama has offered such cuts, and it appears some Republicans actually believe it. Obama's endorsement of chained CPI — lower cost of living increases for Social Security benefits — is on the White House website. But even moderate Republicans denied this reality. Maine Sen. Susan Collins said, "The president has to go first with plans for Medicare and Social Security... Then I think you will see more receptivity on the Republican side to an overhaul of the tax code." New York's Jonathan Chait pointed out that Collins should have noticed the president going first at at his State of the Union address. In a hilarious Twitter fight in early March, Republican strategist Mike Murphy said Obama needed to embrace chained CPI to get a deal; once he was informed Obama did embrace chained CPI, Murphy dismissed it as a "small beans gimmick." The same week, The Washington Post's Ezra Klein reported a meeting in which an anonymous Republican lawmaker refused to believe Obama had backed chained CPI:
Would it matter, one reporter asked the veteran legislator, if the president were to put chained-CPI... on the table?
“Absolutely,” the legislator said. “That’s serious.”
Another reporter jumped in. “But it is on the table! They tell us three times a day that they want to do chained-CPI.”
“Who wants to do it?” said the legislator.
“The president,” replied the reporter.
“I’d love to see it,” laughed the legislator.
One month later, on Wednesday, The New York Times's John Harwood reported that Eric Cantor was still in denial that Obama supported such a policy. Harwood writes:
Mr. Cantor complained that the president, while insisting on additional tax increases, still has not embraced the structural changes to Medicare, Medicaid and Social Security that he says are needed to strike a deficit reduction deal.
Even on the divisive tax issue, however, Mr. Cantor can sometimes sound as if he is leaving a door open. If Mr. Obama shows he is “serious about fixing the problem,” he said, “then we’ll see” about additional taxes.
President Obama's aides are not very optimistic that a deal is possible, The Washington Post's Zachary Goldfarb reports, but they think a strategy of private dinner dates with Senate Republicans, plus public campaign speeches, "offers the best path forward for progress."