Will Obama’s Grand Gesture Lead to a Grand Bargain?
Life + Money

Will Obama’s Grand Gesture Lead to a Grand Bargain?

REUTERS/Larry Downing

Are the Republicans just a cheap date? Or, is President Obama really desperate?

For the past two years, both have been playing hard to get on the budget—causing near disasters involving the debt limit and the fiscal cliff.  And they haven’t held back on flinging sticks and stones and blaming the other guy for the mess.

Relations began to thaw this week thanks to the simplicity of a few meals. Obama hosted House Budget Committee Chairman Paul Ryan for lunch at the White House on Thursday, after dining out with a dozen GOP senators at a luxury hotel the evening before. With those simple gestures, Obama has reaped some remarkable good will on Capitol Hill and rekindled hope that a “grand bargain” for stabilizing the national debt—$16.5 trillion and growing—may still be in reach.

But for all the optimism, this new romancing shows a major tack in strategy by the president with another expiration of the government’s borrowing authority looming in May, a 2014 budget to hash out and the president’s own approval ratings beginning to slip.

Obama notoriously has disliked playing the Washington game of glad-handing and cajoling his rivals to get his way. For much of his first term, he either negotiated privately with House Speaker John Boehner and other congressional leaders or pushed his economic and budget agenda at campaign-style rallies to pressure Republicans to bend to his will.

The president’s past efforts largely reinforced gridlock and distrust. It did help him achieve tax hikes on the wealthiest Americans as part of the fiscal cliff deal on New Year’s Day, but it proved ineffective in trying to block the $85 billion of sequester spending cuts that took effect a week ago. Republicans blasted him for what they called Obama’s “perpetual campaign,” and noted that many Americans were suspicious of his dire warnings of mass layoffs, furloughs and downgrading of government services if the sequester were allowed to take effect.

 When Obama last relied on this approach to get congressional approval for raising the debt ceiling in 2011, the government nearly defaulted and its credit was downgraded by Standard & Poor’s.

So now, Obama is playing the Washington insider’s game in hopes of drafting a master plan of spending cuts, entitlement reforms, and additional tax increases. Obama recently has been renewing his offer to support changes in Social Security and Medicare – such as adopting a less generous cost of living adjustment known as chained CPI – in return for Republicans supporting more revenues to help reduce the deficit.

The new strategy seemed to be welcomed by Boehner. As the top elected GOP official, the Ohio congressmen felt burnt by his previous entanglements with the White House. And when he tried to strengthen his hand in negotiations—such as adopting a “Plan B” alternative to the fiscal cliff deal—his own caucus rebelled.

“Those haven’t worked very well if you’ve watched over the past two years,” Boehner told CNBC about his bargaining with Obama. “You don’t have enough member buy-in. Two people hiding behind closed doors doesn’t replicate 535 members of Congress.”

One of the Wednesday dinner attendees, Sen. Pat Toomey, R-Pa., said in a response to a question from The Fiscal Times that the president needs to interact more with congressional leaders and individual lawmakers.

“It’s not an either-or-thing,” Toomey said. “It’s helpful for President Obama to engage at both levels, at the level of elected leadership and the level of rank-and-file members.”

Maryland Rep. Chris Van Hollen, the ranking Democrat on the House Budget Committee, also attended the White House lunch with Ryan—the 2012 Republican vice presidential nominee—and explained on MSNBC ahead of the meeting that Obama was being intentional in going wide with members of Congress.

“What the president is trying to do now is expand that conversation beyond just the top leaders – not to exclude them, to welcome them any time to the White House as he did last week—but to also expand that conversation to others on Capitol Hill,” Van Hollen explained. “The more avenues of communication you have  open, the more opportunity there is to resolve differences. Obviously there is no guarantee that we will get there. But you’re guaranteed not to get there if you don’t have these conversations going.”

Instead of limiting past major bargaining sessions to top GOP congressional  leaders, he is now  casting a much broader net by consulting by phone and in person with a wide range of  lawmakers who are not part of the formal hierarchy.  This includes major players like senators John McCain of Arizona, Lindsey Graham of South Carolina and Tom Coburn of Oklahoma, and lesser lights such as Mike Johanns of Nebraska and John Hoevan of North Dakota.

Major fault lines persist – which will become increasingly apparent after Ryan unveils the latest version of the House Republican budget next week that seeks to wipe out the deficit within a decade.  Republicans have largely rejected Obama’s call to close tax loopholes in order to raise hundreds of billions of dollars in new revenues over the next decade. At the same time, Republicans favor an overhaul of Medicare that would control the government’s commitments by turning it into a voucher-style program. Democrats are aligned against such a change, although they’re willing to entertain reduced Medicare payments to prescription drug companies.

In reaching out to the Republicans with a grand gesture, the president dug into his own pocket to pay for dinner at the tony Jefferson Hotel Wednesday night. And it seemed to pay off almost immediately.
McCain and Coburn emerged from the two-hour dinner giving awaiting reporters the thumbs-up sign – and then the next day McCain and Graham took the Senate floor to skewer fellow Republican Rand Paul for mounting a filibuster to protest the administration’s use of drones to kill foreign enemies.

Obama is scheduled to meet on Capitol Hill next week with the House and Senate Republican caucuses in search for common ground. His efforts demonstrate an eagerness to cooperate and to break a stalemate that has thwarted many of the president’s initiatives. And his new charm offensive just might be the trick for bolstering his flagging approval ratings.

Just before Christmas, the president enjoyed a 58 percent favorability rating, according to the Gallup organization. That figure has since dropped to 47 percent, pretty much pulling even with his disapproval rating.

Obama has consistently leveraged his popularity to gain advantage over a Congress that is almost universally held in low regard. Should his ratings continue to fall, his hand becomes weakened in budget negotiations and the impact of his campaign-style events also gets blunted.

The Wednesday night dinner conversation reportedly covered  more subjects than  government finances, including immigration and gun safety legislation the president is pushing for. Graham, who was asked by Obama to organize the dinner, described the conversation as “productive and substantive.”

“The discussions with the President about our long-term budget problems were candid and differences in philosophy were apparent,” he said. “However, also apparent was common ground on how to move forward. One thing I am certain of -- the perpetual campaign will not solve the nation’s problems.”