Obama budget takes heat from all quarters

Republicans reject any new taxes. Liberals say they'll fight any changes to Social Security and other entitlement programs. Does the Obama administration have any room to maneuver?

Charles Dharapak/AP
President Obama and White House senior adviser Dan Pfeiffer react to a reporter's question as they leave the Treasury Department in January. Mr. Pfeiffer warned Republicans Sunday that a 'my way or the highway' approach would spell the GOP's defeat in upcoming budget negotiations, and he told Democratic allies that they, too, will have to bend on Obama's delayed spending plan set to be released this week.

Does President Obama’s budget have a snowball’s chance in Hades?

He’ll submit his administration’s budget for the fiscal year beginning in October on Wednesday, and based on leaked details it’s getting largely negative reviews.

House Speaker John Boehner has rejected it because it includes new revenues, meaning some new taxes on the wealthy. Mr. Obama’s liberal base promises to block any cuts in entitlements – in particular, a revised inflation adjustment for Social Security known as "chained CPI." 

"There are nuggets of his budget that I think are optimistic." Sen. Lindsey Graham of South Carolina said on NBC's "Meet the Press" Sunday – the only praise, however lukewarm, heard from a Republican.

"The president is showing a little bit of leg here, this is somewhat encouraging," said Senator Graham. "He has sort of made a step forward in the entitlement-reform process."

"He showed some leadership," Graham added. "That puts the burden on us."

Which is exactly what Obama’s liberal base fears, a fact all too clear to the White House, which sought to clarify its position Sunday.

"This chained CPI that’s being referred to here, it is something the president will only accept on two conditions," senior adviser Dan Pfeiffer said on ABC’s “This Week.” "One, it’s part of a balanced package that includes closing tax loopholes that benefit the wealthiest, and two, that it has protections for the most vulnerable, including the oldest seniors."

On Wednesday – the day he officially unveils his budget for fiscal year 2014 – Obama will dine with a dozen Republican senators.

"The president's focus, in addition to the regular order process that members of Congress say they want, is to try to find a caucus of common sense, folks who are willing to compromise, that don't think compromise is a dirty word, and try to get something done," Mr. Pfeiffer said Sunday on "This Week.”

But Obama might want to schedule a meal with liberal lawmakers and pundits as well.

“I will never support any reductions in Social Security, Medicare or Medicaid benefits – and chained CPI is a direct reduction in Social Security benefits,” says Rep. Jerry Nadler of New York. “Along with my fellow progressives, I will vehemently oppose any such cuts.”

“Any ‘democrat’ who supports these proposals is never going to get my vote,” warns the economic analyst known as “New Deal Democrat” on the Bonddad Blog. “I will support any primary opponents and I will accept a one term GOPer if necessary to end the political career of any Grand Betrayers, replacing them with a progressive in 2 or 6 years. And I know I am far from alone.”

On his Conscience of a Liberal blog, New York Times columnist and Nobel Prize-winning economist Paul Krugman says chained CPI is “purely and simply, a benefit cut.”

“So what’s this about?” Mr. Krugman asks. “The answer, I fear, is that Obama is still trying to win over the Serious People, by showing that he’s willing to do what they consider Serious – which just about always means sticking it to the poor and the middle class.” 

Labor unions threaten to “make noise” about the entitlement elements in Obama’s budget as well.

"It is unconscionable to ask seniors, people with disabilities and veterans who are barely making it to be squeezed even tighter at a time when corporations and the wealthiest 2 percent are not paying their fair share of taxes, despite soaring profits," AFL-CIO policy director Damon Silvers writes in an e-mail reported by Politico. "It’s bad policy to make cuts that will weaken our economic recovery."

"The majority of Americans oppose cuts to our country’s most important family protection programs. It’s time to make some noise about it," Mr. Silvers writes. "We need to invest in America's working families, not pull the rug out from under them."

The House and Senate have already passed their own budget plans, with the Republican-controlled House cutting $5.7 trillion in spending and balancing in 10 years, and the Democrat-controlled Senate plan raising taxes by $1 trillion.

“There is a good chance both sides want to compromise,” predicts White House adviser Pfeiffer.

But, he warns, “If the Republicans, particularly in the House, think my way or the highway approach, then we’re not going to get a deal. Simple as that.”

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