Obama helps ’12 bid with concessions in debt deal

Political observers could not help but notice that many provisions of the compromise debt deal, such as postponing nearly all spending cuts until 2013 and boosting student aid next year, are tailor-made for President Obama’s 2012 re-election campaign.

“Politically, I actually think the president did very well here,” said former Sen. Judd Gregg, New Hampshire Republican, adding that the deal should affect the president’s re-election chances “hugely.”

Prior to the agreement, Republicans had four main points of attack against Mr. Obama — jobs, debt, deficits and spending, Mr. Gregg said. The deal, which would trim future spending by at least $917 billion, gives Mr. Obama room to argue that he is fiscally responsible.

“He’s taken three of those four issues off the table, or at least muted them,” said Mr. Gregg, who proposed a debt-reduction commission with Sen. Kent Conrad, North Dakota Democrat, in 2009. “He’s gotten a political win.”

The tentative agreement puts off another battle over the nation’s borrowing limit until after the 2012 election and allows Mr. Obama “to claim that he’s moving to the center,” said Chris Edwards, director of tax policy studies at the Cato Institute. The president’s repeated efforts to portray himself as an honest broker seeking compromise between Democrats and Republicans have been aimed in part at winning over crucial independent voters next year.

Many Democrats reacted with bitterness to the president’s support of a deal that includes spending cuts but no new tax revenue for now. Rep. Emanuel Cleaver, Missouri Democrat and chairman of the Congressional Black Caucus, called the agreement “a sugarcoated Satan sandwich.” Democratic strategist Donna Brazile, who managed Al Gore’s presidential campaign in 2000, said on her Twitter account: “The GOP won the debate by playing quick & loose w/the truth. Bullying everyone, incl media. Stonewalling. Arrogance. This was unnecessary.”

Presidential spokesman Jay Carney said Monday that Mr. Obama insisted on an agreement that lasts through 2012 because of the economic benefit it will bring.

“This agreement ensures that the debt ceiling will be extended through 2012, removing that cloud of uncertainty from the economy,” he said.

Mr. Carney added that liberals should accept Mr. Obama’s motives for striking a bargain with the GOP, arguing that deficit reduction will lead to an improved economy and more jobs.

“The president of the United States believes that deficit reduction is important,” Mr. Carney said. “It is a positive thing for Democrats. Progressives need to understand, and we think that most obviously do, that deficit reduction is essential.”

At the Capitol, Vice President Joseph R. Biden said the extension of the debt ceiling through 2012 “has nothing to do with elections.”

“It has to do with now, from the moment this passes — if it passes and it is signed into law — we will be talking … about jobs,” Mr. Biden said.

As the fine points of the agreement were debated in Congress on Monday, many conservatives were dubious about the proposed savings. Mr. Edwards said the $21 billion in cuts for fiscal 2012 “are not real cuts” but reductions from the spending base line set by the Congressional Budget Office in March.

Several Republican candidates for president came out against the plan, mindful of conservatives’ opposition to it. Former Massachusetts Gov. Mitt Romney said the deal “opens the door to higher taxes and puts defense cuts on the table.”

Rep. Michele Bachmann, Minnesota Republican and a tea party favorite, said the proposal doesn’t cut spending enough. “The president continues to press for a ’balanced approach,’ which everyone knows is code for increased spending and taxes,” she said.

Texas Gov. Rick Perry, who hasn’t announced whether he’ll run for president, said he preferred the House GOP’s earlier “cut, cap and balance” legislation that would require balanced budgets.

Tea party activists and conservative fiscal hawks expressed some anger but showed no signs of forming a third-party challenge or abandoning Republican candidates next year.

“I don’t see a tea party rebellion, but I do see some folks that were counting on tea party support losing it over this,”said Mark Kevin Lloyd, chairman of the Virginia Tea Party Patriot Federation.

“Some are definitely saying that we can’t expect everything all at once, and I think most do understand this,” Mr. Lloyd said. “However, watching [House Speaker John A.] Boehner give [Mr.] Obama all he wanted is sickening to most. We were sort of willing to give him a chance, but he has proven he will hoist the white flag without much hesitation.”

FreedomWorks President Matt Kibbe dismissed the debt-ceiling deal as a “political Band-Aid, not a serious step towards cutting the flow of red ink.”

He said FreedomWorks, which organized a 2009 march on Washington, opposes the deal and predicts that many of the savings in the agreement will never come to pass.

Added Steve Stanek, an economist with the conservative Heartland Institute, “This proposal represents an attempt by leaders in both major political parties to buy votes today with higher debts and taxes tomorrow. It is worse than irresponsible. It is immoral.”

Don Devine, director of the White House Office of Personnel Management under Ronald Reagan, hailed the deal as the “greatest victory for limited government since Reagan. While the actual funds saved are marginal, the whole debate is turned around — even if Obama should win a second term, which this deal makes less likely, not more.”

A key feature of the agreement calls for a special committee of Congress to hash out proposed cuts to entitlement programs and potential tax increases by Thanksgiving. But their recommendations for cuts wouldn’t come until at least 2013.

“The real heavy lifting isn’t going to come until the supercommittee reports,” said Mr. Gregg, former chairman of the Senate Budget Committee. “That’s all going to come after 2012, assuming it comes at all.”

Senate Democrats said Monday that the deal will reduce the likelihood of budget battles with Republicans for the next two years because the agreement essentially “deems” that a budget resolution is passed in each of the next two fiscal years.

“While it is always possible for congressional Republicans to try to hold up the FY12 spending bills over extraneous policy riders or other matters, the legislation significantly reduces the chances of a sequel to last spring’s government shutdown drama,” said a statement from the Senate Democratic Policy and Communications Center.

Mr. Edwards said any benefit of this deal for Mr. Obama’s re-election campaign will be tempered by the fact that it won’t trim the deficit in any meaningful way next year.

“He’s still going to be running with a trillion-dollar deficit,” Mr. Edwards said. “The deal does not cut spending at all. It was really a do-nothing deal. They kicked the can down the road.”

The agreement would boost spending on the Pell Grant program by $10 billion in fiscal 2012, which begins Oct. 1, and another $7 billion in fiscal 2013.

Mr. Gregg said he does see a real benefit to the deal, and he praised Mr. Boehner, Ohio Republican, and Senate Minority Leader Mitch McConnell, Kentucky Republican, for “playing their hands extremely well.”

“It’s the first really substantive step down the road to fiscal responsibility,” Mr. Gregg said.

• Ralph Z. Hallow contributed to this report.