Could Obama decide a deficit deal is in his interest?

Sunday, February 20, 2011; 7:00 PM

Mocked for the timidity of his proposed 2012 budget, President Obama appeared before reporters last week to insist that he is open to serious deficit reduction beyond what's laid out in his plan. People in Washington are so impatient, he complained. Why would anyone think that his 2,403-page fiscal prescription, released the day before, was his last word on the subject?

The co-chairmen of his fiscal commission, whose bipartisan success Obama had ignored in his proposal, welcomed the rhetorical opening. "Sadly, the president does punt on the larger issues," they wrote in a Sunday op-ed for The Post.

"And yet, he's right: A bipartisan process is where this must start," Democrat Erskine Bowles and Republican Alan Simpson added. "The real test is whether he follows through on these good intentions."

What are the odds of that? If Obama were serious about Social Security reform but believed that going first with a proposal would hurt its chances, he presumably would be laying the groundwork by speaking honestly about the challenge.

Instead, so far, we have the opposite. Obama had a plan to strengthen Social Security when he ran for president, but now his budget director suggests there's no rush.

The president's own formula is painfully coy: "I believe we should strengthen Social Security for future generations, and I think we can do that without slashing benefits or putting current retirees at risk." His repeated invocation of the verb "slash" is evidently meant to signal to reformers that he would be open to something less draconian - adjust? modify? tweak? - while reassuring voters that he will stand up to evil Republicans seeking to take away their Social Security benefits.

This is particularly cynical because there's no need to "slash" benefits; a modest adjustment in the formula by which benefits grow, to ensure that future middle- and upper-income earners aren't receiving more (in inflation-adjusted dollars) than today's retirees, would go a long way toward solving that program's problems.

Obama went on to say, "But, look, I was glad to see yesterday Republican leaders say, 'How come you didn't talk about entitlements?' I think that's progress." In fact, Republican ideologues present many obstacles to budget reform: their aversion to ever raising taxes, their opposition to some of the most promising mechanisms for controlling health-care costs. But a refusal to discuss entitlements isn't one of them; it is ideologues in Obama's party who are reluctant to put entitlements, especially Social Security, on the table.

If Obama intended to fulfill Bowles's and Simpson's hopes, you'd also expect to find him speaking with some sense of urgency. "But what I think is important to do is not discount the tough choices that are required just to stabilize the situation," Obama told reporters last Tuesday. "My goal is, is that a year from now or two years from now, people look back and say, you know what, we actually started making progress on this issue."

"Started making progress" can mean different things to different people. But a year from now, the presidential primary season will be well underway. Two years from now, Obama could be out of office. If progress isn't made soon, it's not likely, at least in his first term.

Obama cites his December deal with Republicans as evidence of his openness to bipartisan cooperation. But agreeing to give away more money is never all that hard in Washington. Republicans got to expand the deficit their way (keeping tax cuts for the rich) and Obama got to expand it his way (cutting payroll taxes for the middle class). He won a giant additional stimulus to enhance his reelection prospects and fattened the national debt by another trillion or so.

In fact, if the "hard choices" he likes to talk about involve compromising in any way his political prospects or spending his political popularity to achieve fiscal sanity, there's zero evidence so far. His budget contains a few token cuts (10 percent in community development block grants, a couple billion dollars in heating-oil subsidies that will most discomfit Republican senators from New England) that allow him to claim a centrist mantle. To the extent he achieves operating balance, it's with the usual gimmicks: a rosy economic forecast; cuts that stretch over 10 years - past even a second term - to pay for spending during the next two. A magical pot of money for transportation, with no mention of its source. His State of the Union address was a campaign speech about contrast, not cooperation: Democrats want to win the future; Republicans want to starve it.

So here's the hope: A bipartisan group of senators, led by Mark Warner (D-Va.) and Saxby Chambliss (R-Ga.), comes up with a plausible plan for serious deficit reduction - and Obama decides that hitching his wagon to it might help him in 2012. It might not fit the definition of leadership, but it now seems like the only chance for progress in the next two years.

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