President Obama's budget will include cuts to Medicare and Social Security and tax increases. This does not change what Obama was offering Republicans — he offered the same thing during fiscal cliff talks last fall — but it does mean pundits will declare he is offering a serious budget for serious times, DOA or not.
House Speaker John Boehner rejected a deal to cut entitlements in December because Republicans oppose raising taxes. But the Republican strategy has been to deny that Obama has offered such cuts, and it appears some Republicans actually believe it. Obama's endorsement of chained CPI — lower cost of living increases for Social Security benefits — is on the White House website. But even moderate Republicans denied this reality. Maine Sen. Susan Collins said, "The president has to go first with plans for Medicare and Social Security... Then I think you will see more receptivity on the Republican side to an overhaul of the tax code." New York's Jonathan Chait pointed out that Collins should have noticed the president going first at at his State of the Union address. In a hilarious Twitter fight in early March, Republican strategist Mike Murphy said Obama needed to embrace chained CPI to get a deal; once he was informed Obama did embrace chained CPI, Murphy dismissed it as a "small beans gimmick." The same week, The Washington Post's Ezra Klein reported a meeting in which an anonymous Republican lawmaker refused to believe Obama had backed chained CPI:
Would it matter, one reporter asked the veteran legislator, if the president were to put chained-CPI... on the table?
“Absolutely,” the legislator said. “That’s serious.”
Another reporter jumped in. “But it is on the table! They tell us three times a day that they want to do chained-CPI.”
“Who wants to do it?” said the legislator.
“The president,” replied the reporter.
“I’d love to see it,” laughed the legislator.
One month later, on Wednesday, The New York Times's John Harwood reported that Eric Cantor was still in denial that Obama supported such a policy. Harwood writes:
Mr. Cantor complained that the president, while insisting on additional tax increases, still has not embraced the structural changes to Medicare, Medicaid and Social Security that he says are needed to strike a deficit reduction deal.
Even on the divisive tax issue, however, Mr. Cantor can sometimes sound as if he is leaving a door open. If Mr. Obama shows he is “serious about fixing the problem,” he said, “then we’ll see” about additional taxes.
President Obama's aides are not very optimistic that a deal is possible, The Washington Post's Zachary Goldfarb reports, but they think a strategy of private dinner dates with Senate Republicans, plus public campaign speeches, "offers the best path forward for progress."
Their skepticism is healthy. A "senior administration official" told Politico's Mike Allen that Obama's budget "isn't a menu of options for them to choose from; it's a cohesive package that reflects the kind of compromise we should be able to reach." That means no entitlement cuts without tax increases. That is the same position Obama's had since the debt limit fight in 2011. The GOP wants entitlement cuts without tax increases. That is has been the GOP position forever.
Cantor's position — "we'll see" if Obama's serious about entitlement cuts — is the same both before and after the Friday morning reports that Obama's budget includes entitlement cuts. "I'm in a wait-and-see mode as to whether this White House is very serious," Cantor said on CNBC Friday morning. "There are some things we can agree on." You would think Obama's putting it in writing (again) would give him some indication of Obama's seriousness. But Cantor was more candid on what that meant in mid March: "If the president wants to let our unwillingness to raise taxes get in the way, then we are not gonna be able to set differences aside and focus on what we agree on," he said.
So the real change Obama's budget brings is praise from centrist reporters and pundits. As Politico's Allen notes, MSNBC's Joe Scarborough said Friday, "Now this is a real budget... That's a real budget... exciting... a place to start." The Washington Post explained Obama's budget "will break with the tradition of providing a sweeping vision of his ideal spending priorities, untethered from political realities." The New York Times said it "departs from the usual presidential wish list that Republicans typically declare dead on arrival." NBC News's First Read said Obama could have picked Door No. 1, "a pie-in-the-sky wish list," or Door No. 2, a budget "that tries to make a serious offer to congressional Republicans to get them back to the negotiating table. Well, we now have an early answer — he's selected Door No. 2." National Journal's Ron Fournier writes, "Washington is edging closer to a budget deal, thanks to a gutsy change in strategy at the White House." If Obama's budget pushes Washington closer to a deal, that's great. But it is not a change in what Obama's been offering for months.
The New York Times' Paul Krugman says he fears "Obama is still trying to win over the Serious People, by showing that he's willing to do what they consider Serious — which just about always means sticking it to the poor and the middle class." Whether Obama's dinner diplomacy with Senate Republicans will be successful is yet to be seen, but he has made great strides in pundit diplomacy, Krugman aside.