Obama steps into the deficit/debt/entitlement fray with his speech at 1:35 pm ET… Why is he doing it? The smart money: to use Ryan’s budget plan as a foil, as well as to placate arm-chair pundits and indies… An important reality check: The talk about cutting spending and reducing the deficit is primarily coming from the right… The lack of political will in reforming entitlements… How did we get from a budget surplus to deficits as far as the eye can see?... Obama to preview speech to congressional leaders at 10:40 am… Boehner’s still trying to sell the spending-cut deal… On T-Paw’s “I’m running for president”… On Romney’s “Why didn’t they call me?”… And Santorum to announce “next steps” tonight on FOX.
From NBC's Chuck Todd, Mark Murray, Domenico Montanaro, and Ali Weinberg
*** Stepping into the fray: Outside of campaigns for high office, nothing in American politics brings more passion, argument, and risk than tackling entitlements and taxes. "Hands off my Social Security!" one side will say. "Don't even think about raising my taxes!" the other will reply. And if you talk about cutting military spending, watch out. Stepping into this fray, in fact, is the equivalent of walking into a biker bar and punching someone in the face, no matter how much that person deserved it. It's nothing but trouble. Yet just two months after President Obama -- who's up for re-election next year -- declined to address entitlements in his FY 2012 budget, he's stepping into this fray with a speech at George Washington University at 1:35 pm ET.
*** Using Ryan’s plan as a foil and placating arm-chair pundits and indies: If it's nothing but trouble, then why is he doing it? Is it to blast Paul Ryan and Republicans who want to phase out Medicare (as many Democrats seem to want)? Is it to appeal to independents as a sensible reformer, even if nothing gets done (which his campaign strategists would like)? Or is it to truly lay out an actual plan that could pass and become law (which Erskine Bowles, Alan Simpson, and Andrew Sullivan are crossing their fingers for)? From our reporting and hunches, it’s more of the first two. Expect the president to use Ryan’s budget as a foil. Heading into next year’s election, if the two plans are Ryan’s and Obama’s, that’s a fight the White House thinks it can win. (Democratic operatives are probably licking their chops at the opportunity to go after the “Ryan-Romney plan” or “Ryan-Pawlenty plan” in states like Florida, Ohio and Iowa.) Moreover, Obama seems to be delivering this speech to placate arm-chair pundits and independents, who want to at least hear the president’s plans for tackling the debt.
*** An important reality check: Of course, if Obama doesn’t offer a specific plan today, the White House is opening itself up to criticism from the chattering class. But it’s criticism it would probably take. Why? Talk about cutting the deficit and government spending is coming exclusively from the right. In our February NBC/WSJ poll, Democrats and independents overwhelmingly said job creation and economic growth should be the government’s top priority, versus Republicans and Tea Party supporters who said it should be the deficit and government spending. In addition, when Americans say they want to reduce the deficit, they also don’t want to see their benefits go away. In that February survey, 67% said it was unacceptable to cut Medicaid to balance the budget, 76% said it was unacceptable to cut Medicare, and 77% said it was unacceptable to cut Social Security. And in our most recent NBC/WSJ survey last week, while 61% said they favor a balanced-budget amendment, 69% said they would OPPOSE one if it requires a significant cut to Medicaid, Medicare, and veterans benefits.
*** A lack of public support and political will: When it comes to deficit/debt/entitlement reform, there have always been plenty of plans. Bowles-Simpson. Ryan. Schakowsky. The so-called Gang of Six. What always seems to be lacking, though, is political will. Yesterday, House Speaker John Boehner released a saying that any kind of tax increase is a “non-starter,” despite the fact that Americans are paying a lower level in taxes than at any point since 1950. “We don’t have deficits because Americans are taxed too little, we have deficits because Washington spends too much,” Boehner said. On the other hand, liberals reject any cuts to Medicare, Medicaid, or Social Security, even though entitlements like Medicare are long-term drivers of U.S. deficits. "President Obama: If you cut Medicare and Medicaid benefits … don't ask for a penny of my money or an hour of my time in 2012,” the Progressive Change Campaign Committee said in a pledge it’s circulating to its members. So when you add it all up -- the lack of political will, a lack of public demand -- you see why this is usually more talk than action.
*** How did we get here? So how did we get from a budget surplus at the beginning of George W. Bush’s presidency to deficits and debt as far as the eye can see? Here’s a quick timeline: the Bush tax cuts (2001), 9/11 and the Afghanistan war (2001), the Iraq war (2003), more tax cuts, the unpaid-for Medicare prescription-drug benefit (2003), the financial collapse and economic downturn (2008), the Obama stimulus (2009), and the two-year extension of the Bush tax cuts (2010). Then you add the aging Baby Boomers to the whole mix. Back in 2009, the New York Times calculated that 37% of the deficits were due the economic downturn, 33% were due to Bush’s policies, 20% were due to Obama’s extensions of Bush’s policies, and another 10% were due to Obama’s policies like the stimulus.
*** Obama to preview speech to congressional leaders: Before he delivers his speech today, President Obama will preview it at 10:40 am ET before a bipartisan group of congressional leaders. Expected to attend: Speaker John Boehner, House Minority Leader Nancy Pelosi, House Majority Leader Eric Cantor, House Minority Whip Steny Hoyer, Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, and Sens. Dick Durbin and Jon Kyl.
*** Boehner still trying to sell the deal: Turning from entitlements to last week’s spending-cut deal, it certainly looks like Boehner is trying to sell Republicans and conservatives on the deal in advance of Thursday’s vote. A press release Boehner’s folks issued yesterday was entitled: “President Who Began 2011 Saying “No Cuts” Now Poised to Sign Largest Spending Cut Since WWII.” As it turns out, conservatives aren’t happy with the deal, given that many of the spending cuts don’t directly come from this year’s discretionary spending. The AP: “The historic $38 billion in budget cuts resulting from at-times hostile bargaining between Congress and the Obama White House were accomplished in large part by pruning money left over from previous years, using accounting sleight of hand and going after programs President Barack Obama had targeted anyway.” In retrospect, it appears the White House got as good of a deal as it could get.
*** “I’m running for president”: You just knew this was coming. Lots of people got excited last night after Tim Pawlenty told CNN that “I’m running for president” (even though we already know T-Paw is running and even though he later added that “we'll have a final or full announcement in the coming weeks”). Here’s an important point to remember: There really isn’t such a thing as an exploratory committee. You are either testing the waters (as Newt Gingrich is doing now) or you’ve filed paperwork with the FEC to begin raising money for a full-fledged presidential campaign (as Obama, Pawlenty and Romney have done). Yet there’s a reason why candidates say they’re setting up an exploratory committee, tell an interviewer they’re “running” but add they will have an announcement later, and then formally announce (“Today, I am officially announcing my bid for president”) in Iowa or their hometown. They want several bites at the apple. Legally, Pawlenty, Romney and Obama (as well as Herman Cain and Buddy Roemer) are all ACTIVE presidential candidates.
*** “Why didn’t you call me?” Romney, meanwhile, appeared on CNBC's "The Kudlow Report" yesterday, and gave this response on the 5th anniversary of Massachusetts' health-care reform becoming law: I'm very happy that the Democrats are celebrating the fact that we put in a health-care proposal in Massachusetts as an experiment," he said, per NBC's Lauren Selsky. "And I have one question for them -- why didn't anyone of them or the president ever call me and say what worked what didn't?" It’s the second time he’s used this line. But here’s a weakness in that defense: What if Romney’s health-care advisers also advised the White House? Paging MIT’s Jonathan Gruber…
*** More 2012: Rick Santorum will appear on FOX at 10:00 pm ET tonight, and a spokeswoman tells First Read that he will “announce the next steps he is taking in weighing a run for president in 2012”… Newt Gingrich hits a fundraiser in Atlanta… And Haley Barbour and Buddy Roemer are in New Hampshire.
Countdown to NY-26 special election: 41 days
Countdown to Iowa GOP straw poll: 121 days
Countdown to Election Day 2011: 209 days
Countdown to the Iowa caucuses: 299 days
* Note: When the IA caucuses take place depends on whether other states move up