Obama abandons stimulus for benefit cut to draw Republicans

Not Ideal

“While it’s not my ideal plan to further reduce the deficit, it’s a compromise I’m willing to accept in order to move beyond a cycle of short-term, crisis-driven decision- making,” Obama said in his weekly audio address on April 6.

Some of the cuts have been offered to Republicans before less formally. Putting them in the budget is a “signal that they are open to a fiscal deal and willing to move on entitlements to get one,” said Steve Elmendorf, a Democratic lobbyist and former congressional aide with close ties to the White House.

Allies of the president say it’s probably a futile move, and may be politically damaging to him and his party.

“Every time the president has tried this strategy his popularity has plummeted and the Republicans have picked his pocket,” said Damon Silvers, policy director for the AFL-CIO labor federation. While Obama doesn’t face re-election, Democrats in the 2014 congressional elections could be hurt.

Eroding Allegiances

“Unless congressional Democrats stand up to the president, the release of this budget will give the Republicans the ability to say what they really want to do is cut Social Security and Medicare,” he said. “The Republicans can use the president’s budget to erode the fundamental political allegiances that underpin the Democratic Party outside Washington.”

Nancy LeaMond, executive vice president of the AARP, the largest U.S. group representing the elderly, said in a statement this morning that members of Congress who back Obama’s proposed reduction in the Social Security cost-of-living adjustment would risk alienating older voters.

“This cut to Social Security would break the promise to seniors,” LeaMond said.

Obama has indicated he’ll include jobs initiatives in the plan, such as a network of manufacturing institutes to boost industrial innovation and $50 billion in stepped-up spending on public works projects such as roads and bridges. That would create construction jobs and benefit equipment manufacturers such as Caterpillar Inc.

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