Obama’s Simpson-Bowles Dilemma

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Stick around long enough in Washington, and everything does happen. The party of Abraham Lincoln eventually rallied against the Civil Rights Act. The individual mandate eventually became a left-wing idea. Democrats eventually argued for a cut in payroll taxes, depriving Social Security of its much needed revenue stream. Today we see another headscratcher: The Republican National Committee puts out a press release slamming President Obama for not embracing the Simpson-Bowles deficit reduction commission, the same commission that raises taxes by $1 trillion, and which House Republican leaders unanimously opposed just a year ago. The point of the Republican attack is to make Obama look like he is not willing to compromise on deficits and debt, at a time when that is the position of the Republican Party. But what smarts for the Obama Administration is not the Republican attacks. It is that a lot of Obama’s historic allies agree that the President missed an opportunity by not embracing Simpson Bowles when it was released a year ago.

In the magazine this week, I detail the complaints: From Warren Buffett, Tom Friedman, Alan Simpson and Erskine Bowles, Alice Rivlin and David Walker. The common thread is that Obama played the commission report in 2010 too safe. As I report in the story, former President Bill Clinton also urged Obama at the time to embrace the report. Instead of going big and trying to rally the American people, Obama waited for Republicans to counter with their own deficit reduction plan, attacked it partisan and extreme, and then only came back to the middle with a detailed plan this summer, when Tea Party passions were peaking around the debt ceiling calamity. It did not work.

There was good political logic behind Obama’s cautious strategy. He was hoping a big deal could be crafted in private, and he knew that his public embrace of Simpson-Bowles in late 2010 would make it radioactive to Republicans in the House, who already said they opposed it, while infuriating the left by endorsing entitlement cuts without further negotiating. The irony is that now the opposite has happened. Republicans are increasingly embracing Simpson Bowles as an anti-Obama plan, even though it jibes, with the exception of a few details, with the sort of policy that Obama would love to make his legacy.

The criticism also dovetails with a long-established knock on Obama: That he is too rational and pragmatic to understand that leadership sometimes requires bold steps. (To counter, Obama backers would point correctly to health care reform as a bold step, though it solved a problem that the American people were not all that concerned with.) They believe that if Obama had embraced the center sooner, in a classic triangulation, he would now have more credibility on the issue, even if it might cost him more on the left. It is, in the end, an untestable hypothetical.

Such is politics. Everyone second guesses failures, and tactics always trump policy in a crunch. The question now is whether the recent Republican embrace of a plan that raises taxes by $1 trillion could eventually open the way to compromise along the lines of Simpson-Bowles. I would not bet on it anytime soon. Positions have hardened in Congress. Though I also don’t doubt that Obama, in his most private moments, would welcome such an outcome.

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