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November 24, 2014

Budget Deal Is Better Than Nothing for Weakened Obama

This isn’t the budget deal President Barack Obama has been seeking for the past three years. It’s certainly not the deal he might have been able to conjure a year ago, when he had Republicans desperate to extend the expiring Bush tax cuts. But for a weakened president under water in the polls and facing the prospect of endless stalemate in Congress, it appears to be better than nothing.

There really isn’t much for Obama to crow about, especially given his high hopes earlier in the year for a charm offensive with Senate Republicans in which he talked repeatedly of getting them to compromise on taxes in return for ending the sequester and trimming entitlements.

The deal does lift half of the sequester this year and about a quarter of it next year, and, importantly, it avoids the governing-by-crisis model that has marked the past three years of divided government.

Airline passengers will face higher fees in a nod to making the agreement “balanced,” but that’s not the kind of revenue that Obama mentioned numerous times on the stump last year as he sought re-election.

Corporate tax loopholes — every one — remain safe. Tax breaks for the wealthy are protected. And Obama’s jobs agenda — indeed, the bulk of his legislative agenda, period — remains in the congressional circular file.

After the deal was announced, the president called for an extension of unemployment benefits but he appeared unwilling to risk the modest agreement by demanding it be included.

As one senior Senate Democratic aide put it, the die for the deal was cast when the White House allowed permanent tax relief last year without demanding the end of the sequester in the fiscal-cliff deal negotiated by Vice President Joseph R. Biden Jr.

“We pissed away most of our leverage with the fiscal-cliff deal,” the aide said. “The minute that deal was struck, we knew [the] sequester was here to stay and we wouldn’t be able to get rid of it on our terms.”

Still, Obama spokesman Josh Earnest praised the deal as allowing a return to “regular order” while limiting the damage to the economy if the sequester had been allowed to continue full force.

Some Senate Democratic aides defended the deal, saying it would set a precedent for replacing the sequester in the future. They noted that the agreement left Medicare, Medicaid and Social Security untouched. The likely alternative — keeping the entire sequester — would have been much worse.

But Republicans claimed another precedent — that the sequester would be replaced, if at all, without tax increases.

Earnest, for his part, said Obama would continue to draw a line against entitlement cuts unless the wealthy or corporate interests share in the pain.

“The president is committed to a balanced approach, and that is something that he’ll continue to advocate for,” Earnest said. He said the deal “actually does reflect a balanced approach.”

And Medicare and Social Security will stay off the table unless Republicans show an openness to tax revenue.

“We’re not going to ask those people to make sacrifices if we’re not also going to ask the oil and gas companies to make sacrifices or for hedge fund managers to make sacrifices,” he said.

Aside from the budget, the White House can hope that the congressional wheels will start to turn again now. Appropriations bills can start to move, and there will be more oxygen, perhaps, for other priorities as well.

Meanwhile, Budget Chairman Paul D. Ryan, R-Wis., pointed out that the agreed-upon discretionary spending levels — $1.012 trillion this year and $1.014 trillion next year — are actually below the numbers in his original budget plan.

Senate Majority Leader Harry Reid, D-Nev., praised the deal, as did House Speaker John A. Boehner, R-Ohio.

“Democrats were committed to breaking the terrible cycle of lurching from crisis to crisis. And we were committed to setting sound fiscal policy through the regular order of the budget process and not through hostage taking or crisis making,” Reid said.

Boehner also went on the warpath against conservative groups who blasted the deal even before it was announced. The speaker, for his part, has been advocating for replacing the sequester with smarter cuts since the original deal.

Taking a government shutdown off the table is less exciting for House Minority Leader Nancy Pelosi’s Democrats. The October shutdown briefly raised the possibility that her party could take back the House next year, but those hopes faded quickly with the problematic Obamacare rollout. And now, with another shutdown effectively off the table through the midterms, it will make her job all the tougher.

As for the merits of the budget plan, the California Democrat didn’t seem to find much to like in the deal itself, calling the lack of unemployment insurance “unconscionable” and ticking off a list of Democratic priorities that landed on the cutting room floor.

“If we could have closed even a couple of tax loopholes … we would not have had to go to user fees for TSA or anything on public employees,” Pelosi lamented.

That’s not to say that Republicans are all happy with the deal. A contingent opposes doing anything that would lift the sequester by even a penny. Another group would be willing to do so but only in return for major entitlement changes — not just a few trims to federal worker pensions and a grab bag of other items. But while many conservatives said they would vote no, Republican leaders expressed confidence the deal would pass.

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