Rightward Tilt Leaves Obama With Party Rift

By Jackie Calmes, The New York Times

31 July 11

owever the debt limit showdown ends, one thing is clear: under pressure from Congressional Republicans, President Obama has moved rightward on budget policy, deepening a rift within his party heading into the next election.

Entering a campaign that is shaping up as an epic clash over the parties' divergent views on the size and role of the federal government, Republicans have changed the terms of the national debate. Mr. Obama, seeking to appeal to the broad swath of independent voters, has adopted the Republicans' language and in some cases their policies, while signaling a willingness to break with liberals on some issues.

That has some progressive members of Congress and liberal groups arguing that by not fighting for more stimulus spending, Mr. Obama could be left with an economy still producing so few jobs by Election Day that his re-election could be threatened. Besides turning off independents, Mr. Obama risks alienating Democratic voters already disappointed by his escalation of the war in Afghanistan and his failure to close the Guantánamo Bay prison, end the Bush-era tax cuts and enact a government-run health insurance system.

"The activist liberal base will support Obama because they're terrified of the right wing," said Robert L. Borosage, co-director of the liberal group Campaign for America's Future.

But he said, "I believe that the voting base of the Democratic Party - young people, single women, African-Americans, Latinos - are going to be so discouraged by this economy and so dismayed unless the president starts to champion a jobs program and take on the Republican Congress that the ability of labor to turn out its vote, the ability of activists to mobilize that vote, is going to be dramatically reduced."

While Mr. Obama and Republicans have been unable to agree on a debt reduction plan for spending cuts and revenue increases to cut $4 trillion in the first decade, on Saturday they were negotiating a deal with fewer spending cuts that would ensure the government's debt ceiling would be increased into 2013 to avoid another deadlock in the heat of campaign season.

No matter how the immediate issue is resolved, Mr. Obama, in his failed effort for greater deficit reduction, has put on the table far more in reductions for future years' spending, including Medicare, Medicaid and Social Security, than he did in new revenue from the wealthy and corporations. He proposed fewer cuts in military spending and more in health care than a bipartisan Senate group that includes one of the chamber's most conservative Republicans.

To win approval of the essential increase in the nation's $14.3 trillion borrowing ceiling, Mr. Obama sought more in deficit reduction than Republicans did, and with fewer changes to the entitlement programs, because he was willing to raise additional revenue starting in 2013 and they were not. And despite unemployment lingering at its highest level in decades, Mr. Obama has not fought this year for a big jobs program with billions of dollars for public-works projects, which liberals in his party have clamored for. Instead, he wants to extend a temporary payroll tax cut for everyone, since Republicans will support tax cuts, despite studies showing that spending programs are generally the more effective stimulus.

Even before last November's election gave the Republicans control of the House, Mr. Obama had said he would pivot to deficit reduction after two years of stimulus measures intended first to rescue the economy and then to spur a recovery from the near collapse of the financial system. With Republicans' gains in the midterm elections, that pivot became a lurch. Yet Congressional Republicans say Mr. Obama seeks a debt limit increase as "a blank check" to keep spending.

"The Republicans won, and they don't know how to accept victory," said Robert D. Reischauer, a former director of the Congressional Budget Office.

In his budget proposal in January, Mr. Obama declined to suggest a plan along the lines proposed by a majority of his bipartisan fiscal commission, which in December recommended $4 trillion in savings over 10 years through cuts in military and domestic programs, including Medicare and Medicaid, and a tax code overhaul to lower rates while also raising more revenue.

Even though Mr. Obama was widely criticized, administration officials said at the time that to have embraced that approach then would have put him too far to the right - where he ultimately wanted to end up in any compromise with Republicans, not where he wanted to start.

But by this month, in ultimately unsuccessful talks with Speaker John A. Boehner, Mr. Obama tentatively agreed to a plan that was farther to the right than that of the majority of the fiscal commission and a bipartisan group of senators, the so-called Gang of Six. It also included a slow rise in the Medicare eligibility age to 67 from 65, and, after 2015, a change in the formula for Social Security cost-of-living adjustments long sought by economists.

"He's accommodated himself to the new reality in Washington," said Tom Davis, a former House Republican leader from Virginia. "That's what leaders do."

But Congressional Democrats and liberal groups objected.

"The president's proposing cuts to Social Security and Medicare has the potential to sap the energy of the Democratic base - among older voters because of Medicare and Medicaid and younger voters because of the lack of jobs," said Damon A. Silvers, policy director of the AFL-CIO. "And second, all these fiscal austerity proposals on the table will make the economy worse."

Mr. Obama's situation has parallels with the mid-1990s, when President Bill Clinton shifted to the center after Republicans took Congress and battled them on deficit reduction and a welfare overhaul. Many Democrats were angered by his concessions, by a sense of being left out of negotiations and by a fear of alienating Democratic voters. Mr. Clinton was re-elected in 1996.

But Mr. Obama is likely to face the voters with a weaker economy and higher unemployment than during Mr. Clinton's era. Still, his advisers express confidence that voters will reward Mr. Obama either for winning a bipartisan deal, if that were to happen, or for at least having a more balanced approach that does not remake Medicare and Medicaid and asks for more revenue from the wealthy. And they suggest another potential parallel with the Clinton years of divided government: that Republicans risk a voter backlash with their uncompromising stands.

"Democrats created Social Security and Medicare, and we have fought for decades against Republican attempts to end these programs," said Dan Pfeiffer, Mr. Obama's communications director. "And President Obama believes that now is the time for Democrats to be the ones to step up and save Social Security and Medicare."

Mark Mellman, a Democratic pollster, said polling data showed that at this point in his term, Mr. Obama, compared with past Democratic presidents, was doing as well or better with Democratic voters. "Whatever qualms or questions they may have about this policy or that policy, at the end of the day the one thing they're absolutely certain of - they're going to hate these Republican candidates," Mr. Mellman said. "So I'm not honestly all that worried about a solid or enthusiastic base."

Binyamin Appelbaum contributed reporting.