4:38pm

Tue April 9, 2013
Politics

Obama's Late Budget Submission A Strategic Move

Originally published on Tue April 9, 2013 7:34 pm

Transcript

MELISSA BLOCK, HOST:

This is ALL THINGS CONSIDERED from NPR News. I'm Melissa Block.

AUDIE CORNISH, HOST:

And I'm Audie Cornish.

Tomorrow, President Obama is submitting his 2014 budget to Congress. It's more than two months late. But as we hear from NPR's Mara Liasson, there's a political strategy behind that tardiness.

MARA LIASSON, BYLINE: Republicans have excoriated the president for waiting so long to submit his budget. But there's a reason Mr. Obama let the conservative Republican House and the more liberal Democratic Senate go first. Each chamber has now passed a budget but neither plan has any chance of becoming law. The president's budget will fall somewhere in between these two extremes.

It includes spending cuts, investments that the White House promises will be paid for, and tax hikes for the rich. It also includes reforms in Medicare and Social Security, the biggest drivers of the long-term debt. Mr. Obama is proposing something called chained CPI, a change in the formula that determines how Social Security benefits are adjusted for inflation.

PRESIDENT BARACK OBAMA: This is the compromise I offered the speaker of the House at the end of last year. While it's not my ideal plan to further reduce the deficit, it's a compromise I'm willing to accept in order to move beyond a cycle of short-term, crisis-driven decision-making.

LIASSON: Deficit hawks have been calling on the president to embrace just this kind of change to prove he's serious about making a deal. Now that he finally has, he's been given a qualified Good Housekeeping Seal of Approval from what might be called the grand bargain lobby.

Maya MacGuineas is with Campaign to Fix the Debt, a coalition of CEOs, politicians, and economists who are trying to pressure lawmakers to broker a big deficit deal.

MAYA MACGUINEAS: What's encouraging is the seriousness of this one policy, the chained CPI. And what we are going to wait to see is overall how his package adds up. The fact that the president is including that in his budget is a good sign.

LIASSON: But outside the inside Washington circle of budge wonks, reaction has divided along familiar lines.

UNIDENTIFIED MAN #1: Real Democrats do not cut Social Security...

LIASSON: Outside the White House today, liberal interest groups rallied against the presidents budget. And Republicans like House Speaker John Boehner also rejected it. Boehner said his party would never agree to any tax increases, even in exchange for the entitlement reform they've been calling on the president to embrace.

Budget expert Stan Collender says the reaction was predictable.

STAN COLLENDER: There was clearly a GOP leadership strategy that, if the president didn't come out with entitlement cuts, they would rip him a new one for not leading. And if he did, they would dismiss it as inadequate. Is there anything the president can propose that House Republicans will accept? And based on the initial reaction to his budget, the answer is no.

LIASSON: So that leaves President Obama searching for bipartisanship on the other side of Capitol Hill in the Senate, where the Republican reaction was slightly less hostile. This morning at a Politico morning money breakfast briefing, Ohio Senator Rob Portman said this when asked about the president's budget.

SENATOR ROB PORTMAN: If it looks like what he talked about at year end with John Boehner, it will be inadequate for the challenge because it will not do enough on the spending side and it will do way too much on the tax side.

LIASSON: But Portman significantly did not dismiss out of hand the presidents basic framework - entitlement cuts in exchange for more tax revenue. And at least one other Republican was even a little friendlier.

SENATOR LINDSEY GRAHAM: The president is showing a little bit of leg here. This is somewhat encouraging.

LIASSON: That's South Carolina Senator Lindsey Graham on "Meet the Press" on Sunday. Graham's words were music to White House ears because he said he might be willing to accepting higher tax revenue in exchange for the president's movement on entitlement reform.

GRAHAM: He has sort made a step forward in the entitlement reform process that would allow a guy like me to begin to talk about flattening the tax code and generating more revenue.

LIASSON: Flattening the tax code means getting rid of tax loopholes so you can lower tax rates and hopefully generate more revenue to reduce the deficit. That kind of tax reform takes a lot of time to do. And right now, it's in its embryonic stages in the House and Senate tax committees.

Stan Collender.

COLLENDER: The grand bargain, tax reform that raises revenues and entitlement reform that cuts spending, is probably at least two or maybe more years off. If you remember back in '86 and the Tax Reform Act back then, it took a couple of years - almost three years - to enact that legislation. And it was a far easier time to do it then than it is now.

LIASSON: In the meantime it is possible that this year, the president and Congress could make a baby grand bargain, one that creates the framework for a bigger deal to come. Tomorrow night, President Obama will host his second private dinner with a group of Republican senators - another attempt to see if there's any hope for that kind of bipartisanship.

Mara Liasson, NPR News, Washington. Transcript provided by NPR, Copyright NPR.