The charge that the administration forgot about the unemployed in order to pursue something it thought was far more important -- deficit reduction -- gets more support. Reading this, and thinking about the administration's policies more generally, I just can't understand why key members of the Obama team, including Obama himself, thought that if they acted like Republicans then conservative voters would love them.
The explanation, of course, is that despite hopes to the contrary (and denial by some), the president is, "a true fiscal conservative" -- it's not just an act in an attempt to capture the middle -- and that could be bad news not just for middle class tax cuts, but also for important social insurance programs such as Social Security:
In Second Term, What Will Obama Do About Bush Tax Cuts?, by Noam Scheiber: ...In the fall of 2009, Obama’s chief congressional lobbyist, Phil Schiliro, touted a clever idea for dealing with the tax cuts: introduce a bill that would extend the middle-class cuts for two years while allowing the upper-income portions to expire. After two years, the middle-class cuts would also expire unless Congress paid for them with off-setting savings or tax increases.
Schiliro figured that, if the bill passed, the whole mess of tax cuts was likely to disappear ... since there aren’t exactly trillions of dollars in easy-to-cut spending just lying around the federal budget... And even if the bill didn’t pass, it would put Republicans on the defensive...
At first, Schiliro’s plan went nowhere—in truth it was as much a stunt as a serious proposal. But Schiliro had an important ally: Peter Orszag, the president’s budget director. Orszag was the administration’s most outspoken deficit hawk. He believed the only practical way to balance the budget was to repeal all the Bush tax cuts, not just the upper-income variety.
By November 2009, Orszag had become so fond of the idea that he insisted on presenting it to the president... Orszag’s fellow wonks were cool to the plan... But the administration’s chief wonk—Barack Obama—was intrigued. ... According to two sources in the room, he was taken with both the political merits—that is, putting Republicans on the defensive—and the policy rationale of lopping trillions off the deficit. He gave no indication that he was troubled by the plan’s most explosive feature: that it would likely break a central campaign promise—not raising taxes on the middle class—one Republicans would surely wrap around his neck with populist glee.
It’s not entirely clear why the Schiliro plan never went further. But the sense of alarm that broke out among the non-economists who attended the Oval Office conclave surely didn’t help. ... What is clear is that, having been tempted to end all of the Bush tax cuts in 2009, the president would only find the idea more attractive were he to win a second term. ...
In the end, the lesson of the Schiliro plan and the Orszag meeting—to say nothing of the months Obama spent petitioning Republicans for a major deficit deal in 2011—is that the president is a true fiscal conservative. Perhaps even a severe one, to paraphrase his likely opponent. For such a breed of politician, the chance to let the Bush tax cuts lapse may simply be too tempting to pass up.
Orzag was clearly a big part of the push to embrace austerity even though the economy needed just the opposite, but I don't blame him for the administration's pivot to deficit reduction at a time when unemployment was a far, far greater concern. A diverse set of voices on policy is generally a good thing so long as the president then makes good choices from the menu of policy choices. Orzag had Obama's ear for a reason -- Obama liked what he was hearing -- that's the real problem here.