So the White House announced that Chained CPI (i.e., cuts to Social Security benefits) will not be in the budget, after the left had mounted a sustained campaign against it. Zachary Goldfarb has the details and the key context, along with an explanation from a White House official:
The White House budget to be released early next month will propose $56 billion in new spending on domestic and defense priorities and drop a proposal that was included in last year’s budget as a way to attract Republican support — a plan that would have included less generous payouts of Social Security benefits.
The budget would aim to reduce the emphasis on austerity that has been the preoccupation of American politics for the past four years.
A White House official said President Obama decided to release a budget that fully represents his “vision,” rather than to continue to pursue a fiscal agreement, because Republicans have refused to engage in good-faith negotiations over the nation’s top priorities.
“Last year, the administration took a detour from that path by embedding in the fiscal year 2014 budget a potential compromise that the president had offered to the Republican leadership just a few months prior to the budget release,” the White House official said Thursday. But, “Republicans consistently showed a lack of willingness to negotiate on a deficit reduction deal, refusing to identify even one unfair tax loophole they would be willing to close, despite the president’s willingness to put tough things on the table.”
The budget sticks to the outlines of the the recent sequester replacement deal agreed on by both parties but seeks to add $56 billion in spending, on job training programs, energy efficiency programs and universal pre-K. In this sense, it seeks to further ease the burdens of austerity that continue to hold back the recovery, instead prioritizing proposals to create jobs and increase economic mobility, allowing Dems to sharpen the contrast with Republicans in these areas heading into the 2014 elections.
One caveat: Chained CPI is still on the table (albeit not in the budget), but now it’s contingent on Republicans making some kind of offer to revive Obama’s proposal, which seems unlikely, since that would probably require new revenues.
This is a kind of logical next step after refusing to negotiate with Republicans over the debt ceiling hike. That stance, you will recall, was rooted in Obama’s acceptance of something his supporters had pleaded with him for years to come to grips with: There was no entering into a normal negotiation with House Republicans. Indeed, the refusal to accept this helped lead to the 2011 austerity/debt limit deal that we’re still dealing with today, and once Dems did accept it, they reoriented their strategy and were able to put an end to House GOP debt limit extortion.
The dropping of Chained CPI could also be of a piece with this broader reorientation. Obama previously offered Republicans Chained CPI, but GOP lawmakers simply pretended he hadn’t offered them anything in the way of spending cuts, further infuriating liberals who wanted the president to stop offering to trade away core priorities up front in the futile quest for bipartisan glory. As the White House official tells Goldfarb above, the nixing of Chained CPI is rooted in a recognition that it failed last time to entice Republicans into a normal policy give and take.
Meanwhile, Republicans seem determined to prove this calculation is right. They are already attacking Obama for throwing in the towel on getting entitlements under control, even as they are simultaneously signaling that they will focus their 2014 election strategy on attacking Dems for … cutting Medicare to pay for Obamacare.