After Obama’s Reelection, The “Grand Bargain” Is Next On The Docket

Barack Obama remains the President of the United States for the next four years. What is on the domestic agenda in American politics next?

The “Fiscal Cliff” and the “Grand Bargain”

Republicans in Congress plan to hold the approval of the federal budget hostage, as they did last time. What do they want? The continuation of the Bush tax cuts for the wealthiest Americans and severe cuts to social programs that benefit the less fortunate in the name of deficit reduction. Most interesting about this is that the freshly reelected president and Democrats have signaled their willingness to largely go along with Republicans.

In what is known as the “Grand Bargain,” Democrats including Obama have proposed to slash programs such as Social Security to decrease the federal deficit, in order to avoid the “fiscal cliff,” i.e. the blockade of the federal budget by the GOP. Other than one might think from the Democrats’ campaign rhetoric, the focus is not on tax increases for corporations and the wealthiest individuals.

To understand why Obama would support policies that seem to run counter to his campaign promises of even a few weeks ago, namely to put his support behind the struggling American middle class, one has to reach back into his not-too-distant past. And there it lies, in the open: Obama is a neoliberal. 1 2 3

It is visible in the people he appointed to his economic team during the first term in office, the ways in which the financial industry was not heavily regulated after the financial crisis, and the way a public option was given up on early in favor of an industry-based model during the health care reform negotiations.

The irony of it all is that Obama the neoliberal, who pretends to be an economic progressive (liberal) during election season, is decried as everything from a socialist to a communist by the far-right commentators on talk radio and the Republican propaganda machine of Roger Ailes and Rupert Murdoch that is Fox News.

Economically, Obama’s current proposals represent but a gradual difference to what a Romney/Ryan presidency would have wrought, but it is not qualitatively different. The interests of the super-wealthy are not touched by Obama and the Democratic Party.

The swift willingness to compromise with a Republican Party that has been playing hardball since day one (of Obama’s first term), combined with the Obama administration’s notable toughness towards its progressive supporters, reoccurring at the beginning of this second term, makes one wonder whether this is after all a game of good cop, bad cop. If Republican proposals seem extreme from a middle class perspective, the Democrats’ slightly less harsh plans all of a sudden look friendly in comparison. But it is a view from within a moving train.

[Update] My judgment of the situation was perhaps a bit too harsh. According to the New York Times (December 2), the Obama administration now forces the GOP to come to the table first with a serious offer, not the other way around like last time. Obama now wants to raise taxes on the wealthiest Americans in order to reduce the federal deficit.

Read more:

Divided House Passes Tax Deal in End to Latest Fiscal Standoff.” (Jennifer Steinhauer, New York Times, 2013/01/01)

“GOP’s Latest Fiscal Cliff Offer: Permanent Extension Of Bush Tax Cuts For The Wealthy.” (Igor Volksky, Think Progress, 12/12/2012) – Business as usual.

Following the Debt Talks-Interactive Feature.” (Alicia Parlapiano and Josh Keller, New York Times, 2012/12/06) – A nice graphic overview of what Democrats and Republicans each offer in the current talks on the federal debt and budget.

Criticized as Weak in Past Talks, Obama Takes Harder Line.” (Peter Baker, New York Times, 12/02/2012)

The cold, hard realities behind Medicare cuts.” (Politico, 12/02/12)

Inside the talks: Fiscal framework emerges.” (Politico, 11/29/12)

[Fact check] “Facts Falling Off the Fiscal Cliff.” (FactCheck, 11/14/2012)

Fiscal Cliff? Obama Urged Not To Panic.” (Dan Froomkin, Huffington Post, 11/13/2012)

[Op-ed] “Why the Grand Bargain Is One-Sided and Totally Unfair.” (Cenk Uygur, Huffington Post, 11/12/2012)

White House Grand Bargain offer to Speaker Boehner Obtained by Bob Woodward.” (NBC News, 11/11/2012)

[Op-ed] “Let’s Not Make a Deal.” (Paul Krugman, New York Times, 11/08/2012)

Liberals fear grand bargain betrayal if President Obama wins.” (Carrie Budoff Brown, Politico, 11/02/2012)

Obama vows debt-cutting ‘grand bargain,’ immigration reform in Des Moines Register interview.” (Olivier Knox, Yahoo!News, 10/24/2012)

  1. Op-Ed: “Kill Lists and Giant Triplets: Obama and the Neoliberal Government.” (Tolu Olorunda, CounterPunch, 11/08/2012)
  2. Obama 2006—”Too many of us have been interested in defending programs as written in 1938.″ (Gaius Publius, AmericaBlog, 05/01/2012)
  3. “No Economic Team of Rivals On Obama Staff: Rubin’s Manic Neoliberals Dominate.” (Steve Clemons, New America Foundation, Huffington Post, 02/28/2012)

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