Dear White House, You'll Regret This

The latest dust-up in the descent of Bob Woodward from fearless investigative reporter to manipulative media celebrity began with his contention in a Washington Post column that President Obama, by asking for revenue increases as part of a deal to defer the sequester, was “moving the goal posts” from the 2011 budget deal (in which Obama got thoroughly hosed by the Republicans).

When the White House pushed back and an unnamed “senior official” told Politico that Woodward would “regret” those comments, someone, presumably Woodward, leaked an e-mail between himself and White House top economic strategist Gene Sperling.

Since then, the political class has been abuzz with chatter about Woodward’s modus operandi, the ethics of burning a source, his longstanding strategy of trading access for friendly treatment, and so on. 

But far more revealing (and appalling) is the content of the e-mails. Here's what Sperling told Woodward:

The idea that the sequester was to force both sides to go back to try at a big or grand bargain with a mix of entitlement [cuts] and revenues (even if there were serious disagreements on composition) was part of the DNA of the thing from the start. It was an accepted part of the understanding — from the start. Really. It was assumed by the Rs on the Supercommittee that came right after: it was assumed in the November-December 2012 negotiations. There may have been big disagreements over rates and ratios — but that it was supposed to be replaced by entitlements and revenues of some form is not controversial. (Indeed, the discretionary savings amount from the Boehner-Obama negotiations were locked in in BCA [2011 Budget Control Act]: the sequester was just designed to force all back to table on entitlements and revenues.)  [emphasis added] 

The e-mail is pure confirmation that Obama’s position, dating back to at least 2011, has been to try to trade cuts in Social Security and Medicare for new revenues. It confirms that Sperling and his boss have been channeling the likes of Robert Rubin, Pete Peterson, the corporate-sponsored Fix the Debt campaign, et al., who have been promoting exactly this grand bargain. Sperling confirms that the sequester was designed to force exactly such a dismal deal.

Woodward is right that the sequester was substantially a White House idea. But he’s wrong when he suggests that Obama, by adding revenues to the mix, is “moving the goal posts.” Constitutionally, one Congress may not bind another, and in the period since 2011, Obama has been re-elected president. If he wants to put tax hikes on the table, that’s his privilege. That’s what he did in the New Year’s deal to head off the fiscal cliff, and the Republicans obliged.

But what’s really scary about the exchange is what it reveals about the tactical naiveté of Sperling and his president. If the White House thought that more than token revenue enhancements were ever going to be conceded by the Republicans, that's a testament to its political miscalculation. 

In the New Year's fiscal cliff deal, for example, Obama came in with a lot more cards. But when the Republicans were at their tactically most vulnerable because taxes were about to go up for everybody, he threw them a lifeline by settling for a deal with only $620 billion of tax increases on the top one percent rather than the $1.3 trillion assumed in Obama's budget, no deal to push the sequester beyond March 1, and a huge $1.2 trillion tax hike on wage earners through the payroll tax increase.

Sperling is no more effective at negotiating with Woodward than he is at negotiating with Republicans. It’s clear that Woodward is using Sperling far more than the other way around. One can be sure that the Republicans are chortling about the spectacle of reporter who brought down Richard Nixon and Obama’s chief man on the economy doing each other in. But I digress.

The Woodward-Sperling exchange is far more interesting for what it reveals about Sperling/Obama’s propensity for giving ground on core issues and getting almost nothing in return. I suppose we should be grateful that Sperling is only wrecking the economy, the Democrats, Social Security, and Medicare—and not negotiating nukes with the Ayatollah.

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