Would the White House accept a budget deal without taxes? Maybe!

October 28, 2013
Think how happy you two could be! (Olivier Douliery/ABACAUSA.com)
Think how happy you two could be! (Olivier Douliery/ABACAUSA.com)

Business Week's Joshua Green attended a Q&A with Gene Sperling, director of President Obama's National Economic Council, and was surprised to hear the Democrat hinting that the White House might trade entitlement cuts for a deal that replaced sequestration and secured new stimulus -- even if the deal didn't include much or anything in the way of new revenues.

In his usual elliptical and prolix way, Sperling seemed to be laying out the contours of a bargain with Republicans that’s quite a bit different that what most Democrats seem prepared to accept. What stood out to me was how he kept winding back around to the importance of entitlement cuts as part of a deal, as if he were laying the groundwork to blunt liberal anger. Right now, the official Democratic position is that they’ll accept entitlement cuts only in exchange for new revenue—something most Republicans reject. If Sperling mentioned revenue at all, I missed it.

But he dwelt at length—and with some passion—on the need for more stimulus, though he avoided using that dreaded word. He seemed to hint at a budget deal that would trade near-term “investment” (the preferred euphemism for “stimulus’) for long-term entitlement reform. That would be an important shift and one that would certainly upset many Democrats.

That's all interesting, but the real tell comes at the end of the article, where Green publishes the White House's response to his column:

In an e-mail responding to this article, White House spokeswoman Amy Brundage wrote, “Gene was reiterating what our position has been all along: that any big budget deal is going to have to include significant revenues if Republicans insist on entitlement reforms. And any budget deal needs to have first and foremost the goal of creating good jobs for middle class families and growing the economy—that’s our north star in any budget deal, big or small.”

You catch the key word there? "Big." The White House's position is that "any big budget deal is going to have to include significant revenues if Republicans insist on entitlement reforms." But everyone agrees that the next budget deal won't be big. It will be small, or, at best, medium-sized.

It would've been easy enough for Brundage to say that "any budget deal is going to have to include significant revenues if Republicans insist on entitlement reforms." But that's not what she said. This is another signal that Democrats realize they've lost on taxes, at least for now, and are considering ways to unwind sequestration and make headway on other priorities.

Related:

- Democrats should negotiate their surrender on taxes.

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Evan Soltas · October 28, 2013