One of the more interesting subplots in the spending wars is that it’s triggered an intra-Dem battle over the real legacy of Bill Clinton’s successful mid-1990s battle with Newt over spending and Medicare. “Centrist” Dems argue that Clinton proved Obama should embrace entitlement cuts to win back the middle of the country.

But another camp of former Clintonites insists the opposite: Clinton won because he drew a bright line on Medicare and used it to defend an expansive vision of liberal Democratic governance.

I just spoke with former Clinton adviser Paul Begala, who is in the latter camp, and he offered another twist on this debate. He said the lesson of Clinton’s success is that Obama should elevate the moral dimensions of the budget debate, by telling the public as clearly as possible what he and Republicans respectively stand for.

Begala noted that the best way to accomplish this was to make sure that the Bush tax cuts for the rich remains front and center, as a way of revealing the stark difference between GOP and Dem priorities.

“The budget is a profoundly moral document,” Begala said. “It says, `This is what’s most important to me.’”

Begala cited the Bible: “For where your treasure is, there will your heart be.”

Begala recalled that Clinton made a concerted strategic effort to tie his hard line against Medicare cuts to GOP tax cuts for the rich at every turn. He advised Obama to do the same, arguing that failing to do this gives Republicans a hidden advantage.

“Democrats are at their best not simply when they say, `Republicans are mean — they want to cut Medicare,’” Begala said. He noted that the correct message is: “They want to cut Medicare because they want to give tax cuts to the rich. That’s what’s indefensible.”

“It’s the priorities,” Begala continued. “If our message is just, `They want to cut Medicare’ then their answer is, `We’re broke, we have to cut something.’ Then Americans say, `Yeah, good point.’”

To be sure, Clinton did in fact push for welfare reform and a balanced budget in order to restore his fiscal credibility with middle-of-the-road voters. But as former Clinton speechwriter Michael Waldman noted to me yesterday, once he had done that, he pivoted to an aggressive defense of the liberal vision of the social contract embodied in Lyndon Johnson’s Medicare promise to America. Crucially, he defended that vision in moral terms, frequently arguing that the GOP’s priorities were an affront to our “values.”

That’s the part of the story that keeps getting lost — and the one that may have the most instructive value today.