President Obama’s challenge to congressional Republicans to join with him in crafting legislation to delay the sequester puts the GOP in a tough spot. But it’s not impossible it’ll end up doing the same to Democrats too.
In brief remarks Tuesday afternoon, Obama called for passing a small package of revenue increases and spending cuts that would delay the implementation of the $1.2 trillion sequester, which is now scheduled to take effect March 1. A short-term fix would, in theory, spare the economy needless contraction and buy both parties time to craft an ever-elusive “grand bargain” – something Obama has pursued on and off with congressional Republicans for nearly two years now.
For the moment, Obama’s gambit puts the GOP on the defensive. The negative economic impact of the sequester, which is crafted to hit the Defense Department hardest and to spare Social Security, Medicare and Medicaid, is fairly clear, and as March 1 nears the pressure to avoid it will grow. Defense contractors, traditionally a Republican-friendly constituency, will obviously push particularly hard for a workaround.
On top of this, the politics should play well for Obama. He didn’t spell out a specific blueprint on Tuesday, but his basic formula for a temporary fix – a “balanced” approach of more revenue from wealthy individuals or corporations and targeted spending cuts that won’t harm GDP growth the way the sequester would – tends to test well in polling. As TPM’s Brian Beutler wrote, if Republicans resist, Obama will be free to tell voters that they “prefer the sequester to raising even a small amount of revenue from oil companies and other unpopular interests — that the only thing Republicans want more than the sequester is a wide range of cuts to services for the poor.”
As of now, though, this is the road Republicans are heading down. There is enormous, possibly prohibitive resistance within the party to any form of new revenue in the wake of the fiscal cliff deal, which raised rates on high-end earners. In response to Obama on Tuesday, House Speaker John Boehner said the GOP’s alternative to the sequester – a cuts-only plan that cleared the House last year but went nowhere in the Democratic Senate – remains party policy. And another top House Republican, who was among the first to express willingness to give in on revenues in the run-up to the fiscal cliff deal, suggested that accepting the sequester would be preferable to the sort of deal Obama is proposing.
It may just be that Republicans conclude the political consequences of the sequester would be less damaging than a “balanced” deal with Obama. After all, while refusing the latter might harm the economy and hurt the party’s overall national image, it would help protect members individually from conservative primary challenges. Obama surely knows this, which explains his decision to get the P.R. jump on his opponents; if there’s not going to be a deal before March 1, he wants to make sure the public knows who’s responsible.
But the political equation could change a bit if the GOP backs off and a short-term patch is passed. The discussion would then shift back to the grand bargain, with Obama making clear on Tuesday that the terms he offered the GOP before the fiscal cliff deal are still on the table.
That would mean that Social Security, which would be fully protected if the sequester takes effect, would be back on the chopping block, since the White House previously signaled to Republicans an openness to chained CPI – which would make the benefits formula less generous. Chained CPI is vigorously opposed by many on the left, which has long been nervous about the prospect of a grand bargain. Indeed, in earlier negotiations with Republicans, the White House also seemed willing to accept an increase in the Medicare eligibility age, another idea that’s anathema to liberals.
In other words, if Obama’s pressure campaign on the sequester works so well that Republicans give in, it will be a clear victory for the White House. But it could also be a short-term one, since it could easily unleash an ugly battle within the Democratic Party.