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The deficit: Getting it down without the glory

By Gloria Borger, CNN Senior Political Analyst
  • President Obama proposed cutting discretionary spending but not bigger-ticket items
  • Gloria Borger: Obama, budget director Jack Lew want GOP to put their cards on table
  • Lew served as Clinton's budget director when there was a surplus
  • Lew says a GOP failure to vote for higher debt limit would be a disaster

Editor's note: Gloria Borger is a senior political analyst for CNN, appearing regularly on CNN's "The Situation Room," "AC360°," "John King, USA" and "State of the Union."

Washington (CNN) -- It's easy to see why any politician would want to avoid making huge promises on the deficit. After all, it's out of control, unpredictable and chances are you'll fail anyway.

That's because any pollster will tell you that while people always say they want the deficit fixed, they never believe they're part of the problem. So they won't hear of reducing Medicare and Social Security, which amount to nearly a third of the domestic budget. That kinda rules out any serious discussion.

Unless, of course, you're a president worried about the country's fiscal future. Then there's plenty to talk about.

You've convened an impressive bipartisan fiscal commission. You've received a very credible report from them with some innovative -- albeit potentially politically dangerous -- suggestions.

Meantime, you've got Republicans threatening to shut down the government and vote against extending the debt ceiling. And you've got Democrats yelping that the government is putting the social safety net in jeopardy.

And you've got to write a budget.

So in comes the new budget chief, who is actually the old budget chief. Jack Lew, Bill Clinton's director of the Office of Management and Budget, is now Barack Obama's bean counter.

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One big difference: When Lew left the Clinton White House, there was a $236 billion budget surplus. Now the deficit stands at nearly $1.5 trillion this year, or 9.8% of the economy. Not pretty, and not green.

"I had three surpluses," Lew told me. "I was looking at some charts today ... and there was that little blip of green." Sure, the world is different. There's nothing like an economic crisis and two wars to raise the red ink. "There is," he says somewhat wistfully, "a certain longing for the conditions I left behind."

There's a good case to be made that the president missed the boat on deficit-cutting in his State of the Union speech. While he acknowledged the good work of the commission, he stopped way short of embracing much in it. He proposed his own cut of $400 billion by freezing discretionary spending. And he promised to bring that discretionary spending to the lowest share of our economy since Dwight Eisenhower was in office. Not bad.

But what about the big stuff? Deep discretionary cuts don't do the trick, and everyone knows it. The question is how you get a bipartisan consensus on the issues that get us down the road to dealing with Medicare and Social Security.

The president could have been bold, calling for tax reform that includes a flattening of personal tax rates and the elimination of some sacred tax breaks. He could have called for a gradual increase in the Social Security retirement age, which isn't exactly startling. But he punted on that.

The reason? "We don't want to define the discussion at the front end," says one senior White House adviser. Translation: Let the Republicans put their cards on the table, too.

Lew's theory is a first-things-first approach: "The measure of whether a budget is serious is not whether you go down in a blaze of glory. It's whether you get something done."

The Reagan years may well provide the best examples.

Ronald Reagan proposed a bunch of ideas about tax reform in the early 1980s before the Congress got serious. But he forced the Congress to start dealing with the idea. The table was set, as they say -- and eventually, both parties managed to figure out a way to get it done. A different time, yes. But politically, at least, one similarity: each side had to prove it could govern.

In a way, that's what drove the productive lame duck session in December.

"We had to find things that didn't drive either side off the edge," says a senior administration official involved in the negotiations. "And we assessed each other correctly." And a tax deal was born.

Of course, that was a different Congress. The GOP has 87 new House members, half of whom have never served in office -- and all of whom are deficit hawks, Tea Party or not. The Democrats have an increasingly restive liberal base, bound to decry much of the president's cuts.

So it's no surprise that the White House wants the GOP to go on the record at budget-time.

"We will demand details from them," says one senior White House adviser. "Let the American people decide whether expanding the educational system is wasteful. ... They think if we somehow shut down government operations ... that America will flourish in the future."

As for now, there's another big challenge -- voting to raise the federal debt limit.

Privately, GOP leaders understand that they could face two unpalatable choices: A) Defaulting on the government's debt, which essentially puts the government's ability to borrow money -- and the entire economy -- in jeopardy. B) Shutting the government down. Some in their new flock don't exactly see it the same way, and that's trouble.

"It would be of enormous, very bad consequence if the debt limit becomes a moment of testing what happens if government does default," says Lew. "Once you let the genie out of the bottle, you never get it back in." That goes for politics as well as economics.

The opinions expressed in this commentary are solely those of Gloria Borger.