U.S. Vice President Joe Biden applauds President Barack Obama during the State of the Union address on Jan. 20, 2015 in the House Chamber of the U.S. Capitol in Washington, DC.
Mandel Ngan-Pool/Getty

Obama’s new and improved negotiating posture

Updated
Not long after congressional Republicans took control of the House, President Obama thought he could try to negotiate with GOP lawmakers through his budget. The White House would make preemptive concessions in Obama’s budget blueprint – adopting policies such as “chained CPI” for Social Security, for example – as a way of demonstrating that the president was serious about compromise and a good-faith search for common ground.
 
Those efforts flopped. The administration’s Democratic allies would balk at the overly generous giveaways to the GOP, offered in exchange for nothing, and Republicans would simply pocket the concessions and demand more – all the while, refusing to even consider concessions of their own.
 
There can be no doubt that the president learned from those experiences and came to realize that GOP lawmakers aren’t interested in meeting him halfway.  As a result, Obama has adopted an entirely new posture when it comes to budgeting – one in which he presents a document that he actually likes, rather than one he hopes Congress might like. Suzy Khimm had a good summary:
President Obama first targeted wealthy individuals to reduce inequality. Now he’s going after multinational corporations to boost spending as well.
 
The president’s 2015 budget changes the way that corporate profits are taxed overseas to fund short-term infrastructure spending and make it harder for corporations to avoid being taxed altogether. 
 
Obama’s $4 trillion budget, released on Monday, would raise $238 billion for infrastructure spending by making U.S. corporations pay a one-time, 14% tax on earnings they already have parked overseas. Currently, U.S. corporations only have to pay taxes on earnings when they bring the money back home, at which point they’re taxed at the full 35% corporate rate.
The entire White House document is online here, and though I know what some of you are thinking – why even consider a budget that Congress is going to immediately throw in the trash? – dismissing the blueprint as irrelevant is a mistake.
 
As E.J. Dionne Jr. explained this morning, No one expects Obama’s budget to be enacted as he proposes it… But this time around is different because, paradoxically perhaps, the fact that Republicans control both the House and Senate makes Obama’s role more rather than less important.”
 
Agreed. Over the last four years, there was a back-and-forth process between a Democratic Senate and a Republican House. This year, the debate has been, in effect, streamlined – GOP lawmakers and a Democratic White House will have to work something out.
 
And rather than starting in the middle and moving right, the White House is starting with a budget Democrats like – Matt Yglesias said, “[F]or the first time it’s really Obama’s dream budget” – and encouraging Republicans to get ready to compromise.
 
Some other angles to keep in mind, which I’ll mention quickly to prevent this post from being way too long:
 
* Remember the sequestration policy designed to hurt the country on purpose? Obama’s budget scraps “the sequester.”
 
* In addition to all of the priorities outlined in his State of the Union address, including free community-college tuition, the new budget plan also includes an important new plans related to child care and pre-K.
 
* The president has a new overhaul of the federal unemployment-insurance system.
 
* Obama also wants to change Social Security law to “allow same-sex couples to receive spousal benefits even if they live in states that don’t recognize such unions.”
 
* And speaking of Social Security, the president signaled in the budget “that he was ready for the fight over Social Security that congressional Republicans made clear last month they wanted.”
 
* The White House plan includes debt-reduction provisions, but it makes this a priority for the long term, not the short term.
 
For more, Max Ehrenfreund had one of the more detailed overviews I’ve seen – which included some nice charts – and it’s worth your time.
 

Barack Obama, Budget, Budget Policy, Budgets and Tax Policy

Obama's new and improved negotiating posture

Updated