This week’s events should put paid to suspicions that Obama has lost his political skills. [Update: Mickey Kaus holds out. Sigh.] The stiffing of John Boehner over the budget cuts is beautiful politics. (The deal is still lousy policy; but the argument that what the US and world economy needs is bigger deficits just now was lost a while ago.) Choosing to stand and fight the Republicans over Medicare and tax cuts for the rich (junior National Treasure Ezra Klein again) did not require great insight. Ryan’s hubris and overreach was patent from the first, and the two policies are for good reason very unpopular, but it was very well done. The White House even managed progressive expectations nicely, hinting in advance at a sellout based on the Bowles-Simpson plan, so that Obama’s robust defence of the liberal heritage came as a relief to progressives.
In Main Street, the budget deal plays as a statesmanlike bipartisan first step to tackle the deficit bogeyman. Beltway insiders know better: on close inspection, the $38bn of headline cuts turns into a reduction of outlays in 2011 of $352m: statistical noise. (That said, the small cuts of $20-25 bn over 10 years are sadly well targeted on GOP shibboleths like foreign aid and high-speed rail.) So John Boehner was played for a sucker, and his party knows it. The Tea Partiers in the House GOP are furious, with reason. At the same time, the economic modelling
John Paul Ryan relied on to bolster his radical plan stands revealed as a fraud. Looking scary is one thing; looking like bumbling amateurs another.
They must now be wondering hard why President Obama is inviting them to negotiate conditions for raising the debt ceiling (h/t Kevin Drum). Where’s the hidden trap?
Well, suppose they try some culture-war rider, eliminating funding for Planned Parenthood or reinstating DADT. The tea partiers lost over these issues on the budget deal; why should they do any better in the debt ceiling context, with Wall Street for once firmly on the side of common sense? Suppose they try pushing the Ryan plan, defunding Medicare. Two lunacies tied together are twice as toxic as one. There is a serious deficit-reduction plan now on the table – Obama’s; designed to hurt them. They don’t want to buy into that. What can the GOP really hope to secure beyond a photo-op bipartisan endorsement of Evil Deficit platitudes?
Barack Obama’s underlying political convictions are now pretty clear. His preference for defence, playing off the back foot, is not just tactical. By conviction, he’s a Disraelian one-nation conservative. The position is more common in Europe than the USA. Nominally socialist politicians like Willy Brandt, Gordon Brown and François Mitterrand stood essentially for defending the status quo, the welfare state built by more radical predecessors like Léon Blum or Nye Bevan – with major contributions from farsighted true conservatives like Charles de Gaulle, Neville Chamberlain, Bismarck, de Gasperi, and even Pétain. Obama similarly stands for defending the liberal heritage of Roosevelt and Johnson.
There are two complications with this picture. One is the absence of the common small-c conservative love of the physical heritage, of tended landscape, harmonious lived-in cityscapes and pristine wilderness. Obama is cerebrally environmentalist, but environmental concerns are clearly a long way down his core priorities. Tough on the climate.
The other puzzle is why he risked so much to pass a health care reform (unsurprisingly, on Rockefeller Republican lines). Since it did pass, he will fight for it as his great contribution to the liberal legacy. I suggest accident. John Edwards and Hillary Clinton made it the centrepiece of the Democratic platform in 2008; in 2010 Nancy Pelosi persuaded him to fight for the full reform after Scott Brown’s election, perhaps on the (surely correct) calculation that retreating to a token reform would damage his credibility beyond repair.
Oh, and another group got shafted on Wednesday:
We will cut spending on prescription drugs by using Medicare’s purchasing power to drive greater efficiency and speed generic brands of medicine onto the market.
The pharmaceutical industry’s opposition to health reform was bought off in 2009, and sure enough the Affordable Care Act did not include a squeeze on drug prices. But surprise, surprise, we now have a new situation! And drug prices are back on the table. Big Pharma’s natural allies in the GOP have created the deficit panic, so it will be harder and riskier for them to help. Contrariwise, ACA does include a lot of technical machinery – EMR, the Medicare Independent Payment Advisory Board, incentives for payment by results and evidence-based practice – that will throw an ever brighter searchlight on the scope for savings. So the lobbyists have it all to do again.
It won’t end with drugs. Remember the annual doc fix? Another time bomb, this time for inflated medical wages. The mechanism is ideal for another gradual squeeze. Finally Obama’s slide-rule commissars will come for the hospitals and testing labs.