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Rob Horowitz: Signs of Life for Grand Bargain

Wednesday, March 13, 2013

 

Watching liberal Paul Krugman and conservative George Will this past Sunday on “This Week with George Stephanopoulos” working overtime to pour cold water on the prospect that, despite the funeral drum rolls, there was still the possibility of a bi-partisan “Grand Bargain’ was further confirmation that President Obama’s aggressive outreach to Republican members of Congress last week was yielding positive results. Contrary to the Washington conventional wisdom, there are signs of life for a landmark agreement on a long-term debt reduction plan whose central elements would be retiree entitlement reform and increased revenue through closing tax loopholes.

In the wake of the failure to prevent the sequester--the just implemented across-the-board budget cuts in discretionary domestic and defense spending---President Obama stepped up his efforts to reach beyond the Republican Congressional Leadership and engage the more persuadable Republican members of the Senate and the House. Last week he had dinner with 11 Senate Republicans including Senators John McCain (R-AZ) and Lindsey Graham (R-SC) who are both troubled by the defense cuts contained in the sequester. Obama’s dinner guests were selected for either a previous indication that they were willing to consider new revenues as part of broad debt reduction deal or a proven track record of working across party lines. In another much publicized meeting, Representative Paul Ryan (R-WI), Chair of the House Budget Committee and former Vice-Presidential candidate, joined the President for lunch at the White House. More meetings with the rank and file are planned for this week.

While positive noises from the Republican Senate dinner participants who went on TV this past weekend about the potential for a constructive dialogue and eventual agreement are only a beginning and significant obstacles including House Republicans’ strong resistance to voting for any new revenues remain, President Obama’s new push for a Grand Bargain does have some solid political ground upon which to advance. First, over the next couple of months the impact of the sequester cuts will begin to be felt and put some pressure on members of Congress to find a better way of cutting the budget. The impact on our military will continue to hit home and remain of significant concern to a number of Republican Senators and House members, making them more responsive to agreeing to some new tax revenue. At the same time, the domestic cuts will begin to bite at Democratic constituencies, softening resistance among Democratic members of Congress to entitlement reform.

Further, as the White House notes, we are already pretty far down the road towards the accepted bi-partisan goal of $4 trillion of debt reduction over the next ten years. The combination of the cuts--excluding sequestration--agreed to as part of the 2011 agreement to lift the debt ceiling and the tax increase on the wealthy adopted a couple of months ago, have locked in $2.5 trillion of debt reduction. As a result, a “Grand Bargain” can be achieved and sequestration lifted if $1.5 trillion or so of additional cuts and revenue are adopted.

A Clear Path to Success

The substantive outlines of that grand bargain have long been evident to anyone who has examined the federal budget: responsible retiree entitlement reforms that are essential with the retirement of the large baby boom generation and increased tax revenue through closing tax loopholes that benefit the very wealthy such as the ability of hedge fund operators to pay the much lower capital gains rate on the income they earn. As budget discussions heat up again on Capitol Hill with deadlines nearing, the release of Paul Ryan’s 10-year budget on behalf of House Republicans expected this week, and the need for another debt limit increase, the desirability of this kind of balanced approach will be driven home to a general public to which polling already demonstrates is receptive.

Success will require President Obama to make a more high profile case for the retiree entitlement reforms he has already courageously proposed such as a chained CPI for Social Security, which will save money by reducing future cost-of-living-increases, and the further savings he has proposed in Medicare through restricting payments for providers.. It may also mean the raising of Medicare premiums over time for wealthy seniors. Republicans such as Graham and Tom Coburn (R-OK) must step up to the plate and continue to say that they will support new revenue as part of an overall agreement.

These measures will anger doctrinaire liberals and conservatives as well as risk losing support from some older voters. But there is a solid majority in the nation for doing the right thing: putting our fiscal house in order, preserving retirement security for future generations and freeing up some federal money for needed investments in infrastructure, education and basic research and development.

Kudos to President Obama and the Republican elected officials who have joined him this past week for resurrecting the “Grand Bargain." Now, it is time for others to add their support in order to forge an agreement that puts our nation ahead of partisan politics and rigid ideology---to borrow a slogan from John McCain that “puts country first.”

Rob Horowitz is a strategic and communications consultant who provides general consulting, public relations, direct mail services and polling for national and state issue organizations, various non-profits and elected officials and candidates. He is an Adjunct Professor of Political Science at the University of Rhode Island.

 

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