The Norman Transcript

April 15, 2013

Obama’s budget plan limits his bargaining power

By Jim Kuhnhenn and Julie Pace
The Associated Press

WASHINGTON — President Barack Obama’s budget overtures to Republicans may limit his bargaining power if the GOP ever returns to the negotiating table on a grand deficit-reduction deal.

In essence, Obama’s spending blueprint is a final offer, a no-budge budget whose central elements have failed to persuade Republicans in the past.

By voluntarily putting entitlement cuts on the table, particularly a proposal to slow the rise of Social Security benefits, Obama has no other gambit to win tax increases from Republicans.

With many Democrats balking at what he’s already offering, it’s not politically feasible for him to offer the GOP anything more.

Puzzled Democrats maintain that Obama not only has given away his leverage, he also has threatened the very identity of his party, which sees the Social Security Act of 1935 as one of its signature achievements.

“If he’s trying to do it to show he is forthcoming as a negotiator, then why doesn’t he wait until he gets to the negotiating table?” said Rep. Rush Holt, D-N.J. “There’s a lot of talk about the fact that politically this is not a winner. Our brand is the party that brought you Social Security.”

What’s irked Democrats the most is Obama’s decision to include a significant shift in policy in his $3.8 trillion budget that would alter the government’s calculation of inflation, or the Consumer Price Index. If adopted, this new “chained CPI” would change the way the government measures inflation and would slow the rise in Social Security benefits and other programs.

In exchange, Obama is insisting on $580 billion in tax increases on wealthier taxpayers. It’s a demand that Republicans flatly reject.

The president has offered the benefit cut to Republicans before as part of broad deficit reduction negotiations, and only in exchange for tax increases the GOP stringently opposes. The White House says the same quid pro quo applies to Obama’s current offer, and chained CPI can’t take effect as a solo measure.

“You can’t decide to only pick out the concessions the president has made and not include the concessions that are from the Republican side, that need to be part of a bipartisan deal that could pass both houses,” said Gene Sperling, the top White House economist.

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