The problems plaguing Obamacare have been damaging to Dems in their own right, sowing doubts about the President’s competence and stoking public doubts about the law itself. But the rollout has also been harmful in another way: It has drowned out Dem plans to use budget talks to draw a sharp contrast with Republicans over fiscal priorities and jobs.
Dems know they need to change this, and fast. They are looking at the President’s announcement of an administrative fix as a way to declare that it’s time to shift back to the economy.
I’m told that as part of the coming budget talks, Dems will place a heavy focus on not just replacing the sequester, but also on the demand that Republicans agree to infrastructure investment and an extension of unemployment benefits, which would also help stimulate the economy.
“We’re going to be focused on stepping up our investment in infrastructure, on replacing the job killing sequester, and on extending unemployment compensation,” Dem Rep. Chris Van Hollen, a top party strategist and the ranking Dem on the House Budget Committee, told me. “If we don’t address that issue, more than a million Americans who are still looking for work will have no means of supporting their families.”
The Dem plan to prioritize extending unemployment compensation, along with infrastructure spending, in the coming budget talks is good news. As Robert Greenstein of the Center on Budget and Policy Priorities has noted, unemployment benefits produce a big “bang for the buck in economic activity per dollar of federal cost.” It’s also a good issue on which Dems can draw a sharp contrast in priorities with Republicans.
Some liberals, such as Ezra Klein, Jonathan Chait, and the Plum Line’s own Ryan Cooper, have argued it might not be the worst outcome if Dems drop the push for new revenues. Opposition to new taxes remains as much of a core GOP organizing principle as hatred of Obamacare (if such a thing is even possible).
In this alternative Dems would get something else, such as more spending on infrastructure or early childhood education, in exchange for entitlement cuts. Meanwhile they would push to replace the sequester cuts with cuts spread deeper into the future, to lift the impact the sequester is having right now, when the recovery is weak – making the easing of austerity the top priority. But Senate budget chair Patty Murray continues to insist new revenue through the closing of loopholes must be part of the talks.
Van Hollen said Dems were looking at restructuring spending cuts, for instance by replacing part of the sequester with cuts to agricultural subsidies over 10 years. But asked if there is any scenario under which Dems would accept a deal without new revenues, Van Hollen said: “We’ve not heard any reason why we shouldn’t be closing these tax breaks. The burden is on Republicans to show why they want to preserve them.”
The shift back to the economy creates a tricky balancing act. Since Republicans will keep hammering Obamacare failings, Dems know their shift back to jobs must be accompanied with a readiness to fix future health law problems if they arise. Dems will try to point to the President’s fix for those losing coverage (which may not end up solving the problem, to be fair) to argue we should now talk about the economy, while also casting continued GOP attacks on the law as proof of an obsession with it that’s out of step with public concern about jobs.
“We stand ready to fix problems as they come up,” Van Hollen said. “But Republicans only have a negative agenda. They want to talk about the Affordable Care Act until the cows come home. Now that we’ve fixed this problem, we need to move on to the things the country cares most about — jobs and the economy.”