Why Obama and Democrats Should Strike a Grand Bargain and Leave Behind The Great Progressive Resistance

When everyone digs in their heels, nothing gets done. As I have noted earlier this week, Paul Ryan apparently doesn't remember that his party and his ticket lost the election largely on the merits of their budget plans. House Republicans are digging in their heels, furiously opposed to any additional revenue and hell bent on ending the social safety net. But there also seem to be plenty of Democrats and liberals digging in their heels - Bernie Sanders being the leading contender of the mantle of Leader of the Great Progressive ResistanceTM - and are declaring themselves adamantly opposed to any meaningful reforms to Social Security, Medicare and Medicaid.

The Great Progressive ResistanceTM headliners are quick to ignore the fact that the president's offer of a grand bargain - progressive tax reforms with revenue increases along with long term savings through the use of Chained CPI to calculate, among other things, most Social Security cost-of-living adjustments - was common knowledge during last year's election. From that vantage point, any Leftist claiming that the country did not vote for a balanced approach including entitlement reforms along the lines the president had outlined (and Great Progressive ResistanceTM had freaked out over) is lying to you just as much as any conservative that claims that we only have a spending problem and not a revenue problem.

I believe that Democratic party in Congress recognizes this as much as the White House, and they are moving towards striking a grand bargain, while the President continues his "charm offensive" to go arount the Republican leadership to rank and file GOP members of Congress. The Senate Democratic budget, unveiled by Sen. Patty Murray yesterday wasn't an ideological line in the sand, as opposed to the Ryan budget in the House. It was in fact positioned sufficiently different from the Ryan budget so that if one forges a reasonable, pragmatic compromise, one would get strikingly close to the president's priorities. Consider the differences:

  • Revenue: House GOP budget: none; Senate Dems budget: roughly $1T from a revamp of the tax code to eliminate loopholes.
  • Medicare: House GOP budget: privatization and limiting total benefits; Senate Dems budget: $275 billion in savings through provider savings in Medicare and Medicaid combined.
  • Medicaid: House GOP budget: repeal ACA's expansion, cut the program, turn into a bloc grant for states; Senate Dems budget: no concessions except as above, uphold ACA's expansion.
There are also critical cuts to the rest of government from the GOP budget that are absent in the Democratic budget in the Senate, but let's face it: the big battle is going to center around the big three: Medicare, Medicaid and Social Security. So the question is, why is Social Security absent from both budgets? Because it is the Republicans' "cry uncle" card, and it is the Democrats' card in the grand bargain to shield not just the rest of the big three, but also the rest of critical public investments from being decimated, and - not least - raise more revenue. Republicans speaking to the president are sensing this already:
Republicans emerging from the meeting said the president was blunt about his willingness to pursue a deal over the objections of liberal Democrats. But he demurred, they said, when House Ways and Means Committee Chairman Dave Camp (R-Mich.) asked whether the White House would proceed with changes to entitlement programs without raising taxes.

“The president insisted that — this is how I would put it — that he would extract a pound of flesh from Republicans before he does that,” said Rep. Cory Gardner (R-Colo.). “I find that very frustrating.”

Noting that Democrats won a $600 billion tax increase in the Jan. 1 “fiscal cliff” deal, Gardner said, “Why can’t we move forward on some of these meaningful reforms?”
There are two big items to notice here. First, the president is already being successful in causing rifts within the GOP. The ones meeting with him are already recognizing that the president's offer to deal with the deficit in a serious way is "meaningful." This directly contradicts the Republican machine's daily output of "Obama is not really serious about the debt" garbage. The president is breaking through the barrier of their own leadership to the Republican members of Congress.

Second, he's making the reforms - the biggest of them being Chained CPI COLA to Social Security (with a new minimum baseline benefit) - contingent on a good pound of "flesh", i.e. revenue increases. The president isn't budging on this, and given that they seem to have taken a government shutdown off the table, the choice really is between the status quo and the grand bargain. The president isn't letting the COLA reform stand on its own without extracting new revenue. The Senate Democratic budget is perfectly positioned to "acquiesce" to the grand bargain: Democrats will take the deal, piss off some liberals, but do some important things:

  • Clean up the tax code on a permanent basis, making it both simpler and more progressive, while adding revenue to the government.
  • Protect the big three (yes, all three, given how much of a red herring the Chained CPI really is) as well as the the program in line to join the set it to make it the big four: Obamacare.
  • Make Medicare more progressive through better means testing (as we have pointed out before, Medicare is already means tested) and make Social Security into a better anti-poverty program through a minimum defined benefit.
Republicans will get the benefit of a talking point: that they somehow "forced" the president and ticked off liberals by finally doing something on Social Security. I can live with that. We are talking about real progress here: making the richest pay more taxes and using it to protect important investments and infrastructure, instituting the biggest expansion of the social safety net since the creation of Medicare through the Affordable Care Act, and a budget that finally stabilizes the debt-to-GDP ratio.

We will not be able to do this, however, without abandoning the ideological flanks of both parties. On our side, the president will need to be bluntly combative against the ideologues in his own party, just as Republicans will need to combat their no-tax ideologues. The grand bargain will require forging a compromise to bring together reasonable progressives and conservatives, even if that means some of the dug-in heels get left behind.

Politics is the art of the possible. Given the current makeup of our government, it isn't possible to do everything simply by raising taxes, no matter how much we liberals may prefer it. It is, however, possible to strike a grand bargain that raises some taxes and makes the tax code more progressive, allows us to make critical investments, and even strengthen the social safety net, albeit at the cost of a benefit growing slightly less rapidly than before. If our goal is to advance the progressive agenda and not just the progressive ideology, if our goal is to move forward and not just call ourselves progressives who stand in progress's way, then the grand bargain falls heavily on the side of a responsible, active government that has a role in defining the ladder of opportunity and not just in getting out of the way. We can move the ball forward through the Grand Bargain. But to do that, we must leave behind the Great Progressive ResistanceTM.