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United States

Nov 13, 2012

Obama is chiselling himself a space on Mount Rushmore

Barack Obama is seeking to nail down a liberal century -- and a budget deal would be his downpayment on becoming a very memorable president indeed.

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President Barack Obama and the Democrats have won a historic victory, snatching a second term from the teeth of a ferocious Right, cashed up by a compliant Supreme Court in the Citizens United and other cases, buttressed by a gerrymandered House of Representatives, with a mass effort at voter suppression and intimidation as the kiss of the whip.

He campaigned on defending a semi-universal health care system whose advantages have not yet come downstream, tax increases for the rich, same-sex marriage, taming the out-of-control spending of the 65+ Medicare program (whose bountiful old-style unmetered socialism, the Tea Party will defend to the death), and talked back — to some degree — to the hysterical triumphalism of “American global leadership”.

He and the Democrats were rewarded with an electoral college win that puts the Republicans on the back foot for 2016, a Senate gain of two for a probable line-up of 55-45, and the prospect that two, three or even four new Supreme Court justices can be installed (if a couple of the liberals take a chance to quit under a liberal administration, and Justice Scalia chokes on a lasagne, which would be very sad). This would set what remains of the liberal courts of the 1940s-1980s in stone, styming the gimcrack Right approach of “originalism” — whereby questions of gun control are adjudicated on what the residents of 1700s Boston would have thought of flamethrowers, etc.

The Right have turned into a salamander pond, the type where you can’t tell if it’s mass murder or a clusterfuck (and volume two of the “schadenfreude chronicles”). The Left are salivating at the prospect that they may now get a genuinely liberal Obama, the haunting fear of the Right.

They are going to be disappointed, both.

Yes, they are going to get a fighting Obama. As the US government faces the unfortunately labelled fiscal cliff — the poison-pill legislation the Congress has set itself whereby $1.3 trillion of spending cuts kick in by the end of January (though it can be delayed to some degree by various complex manoeuvres), if a budget has not been approved. He has already made clear that he will not bend to the GOP-controlled House’s demand that a budget include an extension of Dubya-era tax cuts for those earning more than $250,000 a year.

There is no reason to doubt that, since he made a point of saying it, and threatening a veto, straight after his election victory. The speech was strong and forceful, and suggested a new Obama, more forceful, having shed the last illusions of consensus, and rationality from the other side, and determined not to have a second-term dictated by the House (and if he does reverse his decision on that veto, we’ll know the worst of first-term Obama is back).

The commitment to let these obscene tax cuts die — and gain close to $1 trillion in new revenue — is central to both the symbol and reality of some small shift towards fairness. The whole deal is still pretty obscene: the “middle class” is defined as everyone earning up to $250,000, so those above $200k are still getting a tax break. And the poison pill spending cuts, known as sequestration, are brutal — they split the cuts between military spending cuts ($600 billion), which would be a bonus, but also impose harsh and indiscriminate cuts on the most basic welfare.

Modelling by the Congressional Budget Office suggests that such poorly targeted cuts would tip the US back into recession, in much the same way that the austerity cuts meant to revive Greece, the UK and the eurozone have met with abject failure. However the expiration of the Bush-era tax cuts, and the onset of the cuts occur on two different dates, under different bills. So there’s no doubt that Obama will veto any $250,000+ tax cut extension.

“Leadership, co-operation and a commitment to fiscal discipline, shorn of the moralising Ayn Rand babble about debt, government, etc, Obama will be the complete leader.”

But there’s also no doubt he will make a deal, any deal, that avoids the sequester kicking in. And that’s where he’ll disappoint the left (and the Right, by default). There’s an argument, from left Keynsians, such as Paul Krugman, that nothing of the order of these cuts should be put in place — that a gradual economic recovery would increase tax revenues and allow the public debt (now heading towards $16 trillion, on the way to $20 trillion) to be paid down from the excess.

I have no expertise to judge these arguments, and there is the other argument — that the Left gets into terrible situations, ie. UK 1979-style situations, when it lets debts and deficits spiral. Quite aside from technical economic questions I don’t think Obama is going to take the chance on turning out to be the last Carter/Mondale-style liberal.

Instead, I think he will take the least worst deal on the sequester he can get, but a deal he will take. Such a deal would offer the chance of apportioning the cuts more effectively, so that they fall less hard on the very poorest, but fall they will, and they will hurt a lot of people. Nor can they be vetoed — the law that mandates them in the absence of any other deal has already been passed, and authorised by Obama, for better or worse, in 2011. So something is going to happen, and I don’t doubt that Obama will use if for a little Clinton-style triangulation.

Thus having stood fast on pushing through tax increases on the rich — which marks off his progressive credentials — and leading on a deal on cuts, which commits to a 10-year program of deficit reduction and debt paydown, he will have stolen the Republicans’ position. Leadership, co-operation and a commitment to fiscal discipline, shorn of the moralising Ayn Rand babble about debt, government, etc, Obama will be the complete leader.

The GOP will be hitched to the specific deficit reduction process implemented, and even their right wing will be subject to attack from the Tea Party in the lead up to the 2014 election.

Obama will oversee the roll-out of Obamacare, withdrawal from Afghanistan, the brutal evisceration of al-Qaeda and anyone standing nearby through drone wars — and possibly pull a few more foreign policy advances out of the hat. Should he get a steady economic uptick, and all this other stuff go right, he’ll be able to hand the White House to Hillary or whomever, with the GOP facing a Dukakis-style drubbing.

For these reasons, some such as Andrew Sullivan have suggested that Obama will be the black Reagan.

That is to misunderstand the man. He aims to make Reagan a minor peak in the presidential range, a Wilson or even an Eisenhower. Obama is aiming for a presidency preceded only by FDR’s in impact, and nailing down a liberal century, however much recent decades have sought to reverse it.

The guy is chiselling himself a space on Mount Rushmore. The budget deal will be the first instalment on that in the new term. Whether that or the rest will follow as planned — well who knows? But it’s going to be interesting to watch.

Guy Rundle — Correspondent-at-large

Guy Rundle

Correspondent-at-large

Guy Rundle is Crikey's correspondent-at-large. He was co-editor of Arena Magazine for 15 years, and has written four hit stage shows for Max Gillies, two musicals, numerous books and produced TV shows including Comedy Inc and Backberner.

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