Three very good signs in the past few days suggest that President Obama has been reading Robert Caro’s latest volume on Lyndon Johnson.
The president is handling the debt-ceiling fight very shrewdly, and making the Republicans look both reckless and childish for playing cute with the risk of another financial meltdown. Some of us have been waiting four years for Obama to sound like this:
Republicans in Congress have two choices here: They can act responsibly, and pay America’s bills; or they can act irresponsibly, and put America through another economic crisis. But they will not collect a ransom in exchange for not crashing the American economy. The financial well-being of the American people is not leverage to be used. The full faith and credit of the United States of America is not a bargaining chip.
Wow! Drew Westen didn’t say that, President Obama did.
He’s also vowed to use his executive power to do what Congress won’t do on gun control, and he is fast out of the gate on comprehensive immigration reform with a path to citizenship. All three of these are winners with public opinion, all three split and embarrass the Republicans, and all three demonstrate the power of presidential leadership. Hooray!
These moves also shame faux-centrist groups like No Labels and Third Way, which would have us believe that the deadlock in Washington is the symmetrical result of intransigence on both sides. The Democrats, after all, are going along with the lowest rate of domestic spending since the Eisenhower years and the lowest tax rates on the upper class since before WWII, except for the Bush interlude.
Which brings me to the gray lining in the silver cloud. I’m cheered by Obama’s new resolve. But I worry about the content.
On the economy, the president still seems to believe that recovery requires austerity. He still favors a multi-trillion dollar cut in the deficit over the next decade. And given how little he got in the New Years tax deal—$600 billion in new revenues compared to the $1.43 trillion that his own budget projected—there will be huge pressures on Obama to deliver spending cuts.
The Republicans really have three shots at this. On the debt ceiling, which is getting most of the attention this week, I’m confident that they will cave. Obama’s own toughness, the pressure from business elites and the Federal Reserve not to play roulette with the economy, and the sheer bad publicity should do the trick.
But still to come are the leverage of the Sequester—a second fiscal cliff now deferred only until March 1, as well as the usual threat to shut down the government. Unless there is a lot of pushback from Dems in Congress and progressives at the grass roots, the eventual budget deal could well include a lot more in spending cuts than the economy can absorb. Let’s see if the new Obama can be tough on that issue, too.