President Obama's deficit-reduction plan is most interesting for what's not in it. It does not cut Social Security by chaining the program's cost-of-living increases. It does not raise the eligibility age for Medicare from 65 to 67. Nor does it include any other major concessions to Republicans. Rather, the major concession it makes is to political reality a reality that the White House has been trying to deny for almost a year now.
Since the election, the Obama administration's political theory has been that its first-best outcome is striking a deal with House Speaker John A. Boehner, R-Ohio, and its second-best outcome is showing it genuinely wanted to strike a deal with Boehner. Heads the administration is making Washington work, tails Republicans get blamed for stopping Washington from working.
That thinking led the White House to reward the GOP's debt-ceiling brinkmanship by offering Boehner a "grand bargain" that cut Social Security, raised the Medicare age and included less new revenue than even the bipartisan Gang of Six had called for. You can see why it was seductive to this administration: It fit perfectly with Obama's brand as a post-partisan uniter and his personal preferences for campaigning on achievements rather than against his opponents. But though it came close to happening, the "grand bargain" ultimately fell apart. Twice.
The collapse of that deal taught the White House two things: Boehner doesn't have the support within his caucus to strike a grand bargain, and the American people don't give points for effort.
The administration was initially pleased to see news reports detailing its willingness to compromise and polls showing that the American people thought the GOP was far more intransigent. It figured it was winning. It figured wrong.
Voters, Obama and his team learned, aren't interested in compromises that don't lead to results. Polls showed that Obama looked like the nice guy, and that kept him personally popular. But he also looked like an ineffectual leader, and that caused his job approval ratings to dip below 40 percent in some polls.
Perhaps the final and most conclusive evidence that the strategy had failed came last week, when Democrats lost special elections in Nevada and New York. Both seats were winnable. Both were lost to Republican candidates who focused most of their fire on the president. It was a far cry from New York's special election in May, when Democrat Kathy Hochul picked up a Republican-leaning seat by hammering her opponent's support for Rep. Paul Ryan's Medicare-slashing budget.
The White House could have picked up Hochul's message back in May and stuck to it throughout the debt-ceiling fight. It didn't. The truth is, it didn't want to. The president doesn't think of himself as that kind of Democrat. He has been clear in his belief that there are sensible cuts that can be made to both Medicare and Social Security. He would like to win by governing effectively, by cutting deals with the other party, by making Washington work. He has never shown any interest in a generic Democratic campaign hammering Republicans for being willing to cut Medicare even as they cut taxes on the rich.
Over the past few months, he gave what Sarah Palin might call "the hopey-changey thing" a shot. It failed. The administration thought it had to choose between running a campaign based on changing Washington even if some of its allies didn't like it and running a more traditionally Democratic race. Now White House officials realize that they have to decide between losing because they can't change Washington and trying something else.
The new theory goes something like this: The first-best outcome is still striking a grand bargain with the Republicans, but it's more likely to happen if the Republicans worry that Democrats have found a clear, popular message that might win them the election. The better Obama looks in the polls, the more interested Republicans will become in a compromise that takes some of the Democrats' most potent attacks off the table.
The second-best outcome isn't necessarily looking like the most reasonable guy in the room. It's looking like the strongest leader in the room. That's why Obama, somewhat unusually for him, attached a veto threat to his deficit plan: If the supercommittee sends him a package that cuts benefits for Medicare beneficiaries but leaves the rich untouched, he says he'll kick it back to Congress. Rather than emphasizing his willingness to meet Boehner's bottom lines, which was the communications strategy during the debt ceiling showdown, he's emphasizing his unwillingness to bend on his bottom lines.
That isn't how the White House would prefer to govern. It's not how it would prefer to campaign. It is, let's admit it, politics-as-usual. It's the triumph of the old way of doing things, an admission that Washington proved too hard to change. But it's also the only option that Obama has left.