“I earned capital in the campaign, political capital, and now I intend to spend it,” President Bush said after the 2004 election. He used that capital to push for the privatization of Social Security. By the time the fight was over, after both Democrats and Republicans rebelled against his radical scheme, Bush had almost no political capital left. What should have been the high point of the Bush Presidency instead signaled the beginning of the end.
President Obama could soon be facing a similar moment if he decides to put significant cuts to Social Security and Medicare on the table as part of a deal with Republicans to raise the debt ceiling, as the Washington Post and New York Times are reporting. The president and Congressional leaders will meet again at 11 am today to discuss the issue.
Leaders of both parties have agreed that the debt ceiling must be raised to avoid a potential economic catastrophe. Yet the GOP has had the upper hand in this discussion from day one, insisting that any agreement—which everyone assumes is inevitable—includes massive spending cuts. Republicans know they made a huge mistake by voting for Paul Ryan’s radical budget plan, which led them to lose a special election in New York’s 26th Congressional district and could lead to many more GOP losses in November 2012. They’ve been begging the White House to give them a lifeline on Medicare. It seems they may get one and then some, with a Democratic president offering to cut two of the signature achievements of his party—not to mention two of the most popular government-run programs in the country—in the midst of a prolonged recession.
By agreeing to such a deal, Democrats would be neutralizing their best argument in the coming campaign, writes the New York Times:
The degree that any deal wins bipartisan support on slowing the growth of Medicare, for example, it would deprive Democrats of what has been one of their most potent arguments heading into 2012: their assertion that Republicans would gut the traditional Medicare system and leave older Americans vulnerable to rapidly rising health care costs.
According to the Times, here’s how the White House will attempt to sell the deal:
They argue that Democrats will be in stronger shape politically heading into November 2012 if they help enact a credible deficit reduction deal, allowing them to mount the argument that they protected Medicare from a much more drastic overhaul by Republicans.
That sounds eerily similar to the argument the White House made about its response to the economic crisis—it could’ve been so much worse! And look how that turned out in 2010.
The unemployment rate—not the size of the deficit—will determine the election results of 2012. You’d think that point would be self-evident by now. But for months Washington has been caught in what Greg Sargent calls a “Beltway Deficit Feedback Loop,” obsessed with cutting spending but oblivious to creating jobs. These very spending cuts will not only be politically unpopular, they may also lead to more job losses—a negative double whammy for the White House.