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For Obama's Agenda, an 'October Surprise' in May

Scandals Likely To Further Complicate 'Grand Bargain' Efforts

May. 18, 2013 - 11:42AM   |  
By JOHN T. BENNETT   |   Comments
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Derailing the 'Grand Bargain': US lawmakers on both sides believe the scandals enveloping the White House threaten President Barack Obama's and Capitol Hill's ability to come up with a deal to avoid the sequester. (Agence France-Presse)
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WASHINGTON — A slew of politically charged scandals threatens to derail a sweeping fiscal deal with Senate Republicans that would address sequestration’s defense budget cuts.

Just as US President Barack Obama moved to restart talks with Republican senators over a “grand bargain,” his administration is embroiled in scandals over alleged abuses of power by the Internal Revenue Service (IRS) and Justice Department, and continued questions over its handling last year of the deadly Benghazi attacks.

Key GOP senators, whom Obama has courted about a fiscal deal to shrink or replace the remaining nine years of the twin $500 billion cuts to planned Pentagon and domestic spending, last week told Defense News that striking a grand bargain will be difficult. But each remained optimistic that a deal could be reached by year’s end.

Last week, however, the political landscape here was soiled after details surfaced of the IRS allegedly targeting conservative groups and The Associated Press revealed the Justice Department seized its journalists’ phone records. Even Democrats joined in the criticism.

The mood was further soured as Republicans stepped up attacks on Obama over the Benghazi incident, accusing him of orchestrating “the most egregious cover-up in American history,” and talking about impeaching him.

“Unless Obama can find, fire and prosecute those at the highest levels in his [re-election] campaign and/or his administration who planted any thoughts of ‘helping’ at the IRS, that scandal will only grow to unknown dimensions,” said Winslow Wheeler, a former congressional aide with the Project On Government Oversight (POGO). “If Obama doesn’t stamp out the scandal now ... the election season starts now, not after the August recess.”

Obama fired the acting IRS director on May 15, but that did not resolve bipartisan anger.

If the 2014 congressional midterm election cycle starts this month rather than in July, the pursuit of a grand bargain could be over before it ever seriously started.

“That means sequester continues into 2014, cliff jumping on the debt ceiling later this year, and more proof that you should never say, ‘It can’t get any worse than this,’ ” Wheeler said.

The IRS scandal only emboldened Obama’s Capitol Hill foes. The Senate’s No. 3 Republican, Minority Whip Sen. John Cornyn of Texas, sharply said the Obama administration has “a massive credibility gap.

“Whether the issue is a terrorist attack in Libya, political and partisan abuses by the IRS,” Cornyn said, “it appears that the birds have come home to roost.

Even more telling were remarks by Democratic allies.

The triple scandals led Rep. Charlie Rangel, D-N.Y., to acknowledge they could plunge Washington into “a stalemate” that could essentially kill the chances of passing meaningful legislation.

Even Rangel expressed frustration during a television interview that Obama has yet to provide “a sufficient answer” about the IRS scandal, underscoring the president’s potential problems even in negotiating with congressional Democrats.

“I don’t think you have to go far to find out why this Congress is not functioning,” Rangel said, adding that the US political system is set up to favor ideology over all other things.

Beware: Blue Dogs

What’s more, a group of Democratic members in the House who are key to getting a grand bargain through Congress expressed frustration with the president over the IRS affair.

The co-chairs of the “Blue Dog Coalition” — Democratic Reps. John Barrow of Georgia, Jim Cooper of Tennessee, Jim Matheson of Utah and Kurt Schrader of Oregon — sent what they dubbed a “terse” letter to Obama.

“We are very concerned the Internal Revenue Service (IRS) allegedly targeted certain groups based simply on the perception of partisanship in their names,” the letter stated. “The IRS should never target Americans for their political beliefs. It goes against everything we stand for as a country. We must investigate who broke the law and punish them.”

The Blue Dogs are composed of fiscally conservative, but otherwise liberal, Democrats. Any route through the lower chamber for a bipartisan grand bargain likely runs through that caucus.

“Political headlines and problems are distracting members from seeing and focusing on the impact of sequestration and feeling any urgency to change the legislation,” said Mackenzie Eaglen, a former Senate defense aide now with the American Enterprise Institute.

“If the scandals were about sex or bribery, they might not impact greatly on the prospects for bipartisan compromise,” said Loren Thompson of the Lexington Institute. “However, they focus on hot-button issues for the Republican base, and thus impede any accommodation across party lines.

“The basic problem here is that President Obama has become the living incarnation of all that is wrong with Washington for many Republicans,” Thompson said.

The GOP will only “compromise on taxes and spending if they sense six months before midterm elections that the White House is winning the argument with voters — right now, though, it’s the [GOP] that thinks it’s winning,” he said.

The outrage expressed by both friendly Democrats and contentious Republicans sent the White House into a defensive crouch last week, just as Obama was reopening his pursuit of a grand bargain.

White House Press Secretary Jay Carney was asked during a May 14 briefing if administration officials feel “there [is] a siege mentality back there in the West Wing right now?”

Carney shot back: “Absolutely not.” He went on to tick off a number of legislative items Obama intends to pursue with lawmakers, including a grand bargain.

Is Sequester 'Staying'?

Before the IRS and Justice Department scandals boiled over, and before the ranking member of the Senate Armed Services Committee, Sen. James Inhofe, R-Okla., called for Obama’s impeachment over the Benghazi situation, Sen. John McCain, R-Ariz., told Defense News earlier this month the Senate’s ever-changing agenda could hurt the pursuit of a grand bargain.

Now the scandals have added items to that crowded, and politicized, agenda.

“It’s too unsettled right now with the focus being on guns, focus being on immigration reform, focus being on sequestration,” McCain said. “In this place, success breeds success.”

But politics also breeds politics. And, as Obama learned last week, scandals seem to breed other scandals. And that could lead what the chairman of the Senate Armed Services Committee, Sen. Carl Levin, D-Mich., has dubbed the “fragile” pursuit of a big fiscal deal to shatter.

That would make the sequester budget cuts permanent, a development Pentagon officials, hawkish lawmakers and pro-military analysts warn could lead to global insecurity and US economic harm.

And the sense of urgency to address sequestration is fading. The Treasury Department and independent analysts say the nation will not hit its borrowing limit until this fall.

“That likely means,” Eaglen said, “sequestration is staying on the books through the rest of the fiscal year for DoD.”

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