Gene Sperling: “A mix of entitlements and revenues was part of the DNA” of the Sequester “from the start.”

Gene Sperling and Barack Obama

Gene Sperling and Barack Obama

I want to call attention to some rather startling statements in Gene Sperling’s e-mail to Bob Woodward, which I posted earlier. Please note the highlighted sections.

From Gene Sperling to Bob Woodward on Feb. 22, 2013


I apologize for raising my voice in our conversation today. My bad. I do understand your problems with a couple of our statements in the fall — but feel on the other hand that you focus on a few specific trees that gives a very wrong perception of the forest. But perhaps we will just not see eye to eye here.

But I do truly believe you should rethink your comment about saying saying that Potus asking for revenues is moving the goal post. I know you may not believe this, but as a friend, I think you will regret staking out that claim. The idea that the sequester was to force both sides to go back to try at a big or grand barain with a mix of entitlements and revenues (even if there were serious disagreements on composition) was part of the DNA of the thing from the start. It was an accepted part of the understanding — from the start. Really. It was assumed by the Rs on the Supercommittee that came right after: it was assumed in the November-December 2012 negotiations. There may have been big disagreements over rates and ratios — but that it was supposed to be replaced by entitlements and revenues of some form is not controversial. (Indeed, the discretionary savings amount from the Boehner-Obama negotiations were locked in in BCA: the sequester was just designed to force all back to table on entitlements and revenues.)

I agree there are more than one side to our first disagreement, but again think this latter issue is diffferent. Not out to argue and argue on this latter point. Just my sincere advice. Your call obviously.

My apologies again for raising my voice on the call with you. Feel bad about that and truly apologize.


Really? Does anyone recall President Obama saying that at the time the sequester was proposed and voted on in 2011? Did President Obama discuss these plans for entitlement cuts during his campaign for re-election? I’ve always suspected he did plan cuts in Social Security, Medicare, but when did he publicly state this? I’ve done a somewhat cursory search, but I can’t find anything.

There is no mention of these agreed-upon cuts in the Wikipedia entry on the Budget Control Act of 2011. There no mention of “entitlement” cuts in this extensive article at The Bipartisan Policy Center. This analysis (pdf) notes that the Supercommittee was authorized to cut Social Security:

The “Super Committee” deficit reduction plan: BCA also creates a new, special joint committee of Congress charged with finding at least $1.2 trillion in deficit reduction to avoid any potential sequestration. This “Super Committee” can cut spending (including Social Security and Medicare), raise revenue, or propose a combination of both. If the committee cannot agree on a plan, or Congress fails to approve it, automatic cuts of $1.2 trillion will be triggered through sequestration. To assist the Super Committee with its task, Congress also provided for an accelerated review of the Super Committee recommendations, provided that the Super Committee followed specific timelines, as outlined in the text.

But I think it was generally assumed that the Super Committee would not be able to agree on anything, and if they did that the Senate at least would not vote for Social Security cuts.

So now the truth has come out. Certainly no one from the White House has come rushing out to deny that cuts in Social Security, Medicare, and Medicaid are what is supposed to balance any new revenue. A few other bloggers have written about this.

Digby is always alert for any mentions of Obama’s seeming obsession with cutting Social Security, and she didn’t miss this one.

I don’t know that anyone’s ever admitted that in public before or that the president was completely, shall we say, honest when he ran for his second term about that specific definition of “a balanced approach”. I haven’t heard anyone say publicly that the sequester “deal” as far as the White House was concerned was to cut “entitlements” in exchange for new revenues. I wonder how many members of congress were aware of this “deal” when they voted for the sequester? The public certainly wasn’t.

I wish I could understand why it is so important to Barack Obama to cut these vital programs before he leaves office. It seems to be his obsession. But there you have it. It’s not just in the DNA of the sequester, it seems to be in the DNA of this White House.

In this sense, it seems that Sperling and Woodward–and by extension Obama–do “see eye to eye.”

At FDL, John Walker gets right to the point in his headline: Sperling: Obama Wanted Sequester to Force Democrats to Accept Entitlement Cuts.

The way Obama has handled basically every manufactured crisis from the debt ceiling, to the Bush tax cuts expiration, to the sequester has been about trying to force both Democrats and Republicans to embrace his version of a “grand bargain.” While it is clear this has been the driving force behind Obama’s decisions, if you pay close attention to his actions is is rare than an administration official will directly admit this. This is actually what I think it most interesting about the recently leaked email exchange between Bob Woodward and Gene Sperling up on Politico…..

Obama wants to cut Social Security and Medicare benefits. Obama also wants to raise taxes, but he only wants to do these unpopular things if he can get bipartisan cover to destroy basic democratic accountability. If everyone is to blame than no one is to blame.

What has sometimes been viewed as incompetence on the part of Obama during negotiations is actually Obama trying to weaken Democrats’ hand to “force” them to accept entitlement cuts while being able to blame it on the mean Republicans.

That is why even now Obama isn’t calling for the sequester to be simply repealed or delayed. Obama still wants to use this manufactured crisis to force congressional Democrats to betray their base by adopting Social Security cuts and get Republicans to accept revenue increases.

Finally, thanks to JJ for sending me the link to this piece by Robert Kuttner at The American Prospect: Dear White House, You’ll Regret This.

[Gene Sperling’s] e-mail is pure confirmation that Obama’s position, dating back to at least 2011, has been to try to trade cuts in Social Security and Medicare for new revenues. It confirms that Sperling and his boss have been channeling the likes of Robert Rubin, Pete Peterson, the corporate-sponsored Fix the Debt campaign, et al., who have been promoting exactly this grand bargain. Sperling confirms that the sequester was designed to force exactly such a dismal deal.

But even worse, writes Kuttner, is what the e-mail demonstrations about Sperling’s–and Obama’s–pathetic negotiating skills.

The Woodward-Sperling exchange is far more interesting for what it reveals about Sperling/Obama’s propensity for giving ground on core issues and getting almost nothing in return. I supposed we should be grateful that Sperling is only wrecking the economy, the Democrats, Social Security, and Medicare—and not negotiating nukes with the Ayatollah.

I’ve said ever since I read The Audacity of Hope back in 2007 that Obama wanted to cut Social Security. Actually, he made it clear in the book that he wanted to privatize it, but he must have realized that wasn’t going to happen. It’s time for those of us who care about these issues to start screaming bloody murder again. We need to get on this ASAP. So tell your friends and call your Congress critters.

The floor is open for discussion.

38 Comments on “Gene Sperling: “A mix of entitlements and revenues was part of the DNA” of the Sequester “from the start.””

  1. bostonboomer says:

    The Hill: Sequester cuts are here to stay.

    • RalphB says:

      That’s probably right. Unless they do really noticeable damage, they’re the new normal and maybe even then.

  2. RalphB says:

    Cutting Social Security should be a non-starter for all of us!

  3. Beata says:

    My Congress critter hopes my mother and I will die quickly. I doubt calling him will help change his mind.

    I feel hopeless.

    • bostonboomer says:

      Don’t give in to hopelessness. Once this gets out to the real people there will be loud and continuous outrage.

      • ANonOMouse says:

        Hang in there Beata. I don’t believe the American public will allow the pols to return us to 1935 or even 1965. There will be hell to pay if they think they can push us back into the dungeonstso that they can grab an even larger share of the wealth.

      • Fannie says:

        Since day one, the republicans have been fighting all the way, and in every way against social security………..they called it pure socialism, but we know they are lying. We paid into it. They blame liberals, and say they can’t just leave it along, that they want long term solutions. I say close the loop holes for the rich……….fix that.

  4. Fannie says:

    what was the word Pierce used, confluzing…………………wtf.

  5. RalphB says:

    TPM: House Republican: We’ll Need Dems To Pass Some Bills

    House Republicans must be willing to enlist Democrats to pass important legislation, a moderate GOP lawmaker told TPM on Thursday after his leadership passed the Violence Against Women Act with mostly Democratic votes.

    “I suspect you may see more issues appear like this,” moderate Rep. Charlie Dent (R-PA) told TPM in an interview Thursday afternoon. “It’s quite possible on matters of governance, where there are not the Republican votes, that there will be bipartisan coalitions formed to pass important legislation. … If John Boehner doesn’t have enough Republican votes, we’ll need Democratic votes. It’s very basic. There’s no way around it.”

    It’s not all cotton candy and ice cream for the House GOP either.

  6. Fredster says:

    They could so fix this if they chose to: Take the cap off of earnings subject to the tax and subject all income to the tax. I’ll gladly pay it on my 11 cents of interest I earned on my bank account. 🙄

    • bostonboomer says:

      Funny how the movers and shakers never admit that. Not to mention that Social Security has its own funding stream and doesn’t add to the deficit. And that there’s no real emergency with Social Security for at least 30 years.

    • RalphB says:

      This has nothing to do with SS funding, except they don’t want to pay the taxes which will be required to make up for the surplus which has been spent. It may be easier for them to just steal the money, so that’s what they’re gonna attempt.

  7. Allie says:

    BB – I’m a little confused. You say this is a surprise but yet you knew BHO wanted to cut SS as far back as 2007? I’ve always assumed as a neo-liberal from the Chicago School that he wanted to cut “entitlements” – so this is not surprising to me at all. I could swear there was evidence of this going back to at least 2008, but it will take some time to find that.

    • bostonboomer says:

      Did I say I was surprised? I think I said that no one in the White House has come right out and said this before that I know of.

  8. Fannie says:

    Help me out, I just read this (where & what) of sequester

    Scroll down and you will see social security and medicaid excluded………………..

    If I am right they wanted (Obama) 85 billion dollars sequester from now thru the next 6 months………….and the grand bargain was 4 trillion from Simpson/Bowles campaign…………………….. So is Jon Walker talking about Simpson and Bowles? Because I am confused.

    • RalphB says:

      Jon Walker is talking about the Obama plan which was on the table in 2011 and, like almost everyone else, assuming nothing has changed since. Maybe Chained CPI is on the table but that’s the only SS cut I know mentioned. It’s a problem but even it could be done in such a way as to not harm the vulnerable, depending on the language. I’m against it because that would be too easily changed later to remove those protections.

      • bostonboomer says:

        Entitlements were excluded from the Sequester, but the Supercommittee was authorized to cut Social Security or anything else–but that would have to be approved by Congress.

        What Sperling was talking about is their plans to replace the Sequester with a mix of cuts and revenue. But “entitlement cuts” weren’t specified back in 2011, as far as I know.

        Chained CPI is going to amount to some serious cuts.

      • ANonOMouse says:

        I think I posted the Sequester deal back a few months ago and we commented at the time that SS/Medicare and Medicaid were not in the Sequester.

      • Fannie says:

        Yes, and we talked alot about the cat commission, and how no one was willing to vote for it, and no one knew what the hell was in it………Then back 2011, when we lost credit rating, the sequester came into being to keep our government running, and the agreement was to set cuts at 600 billion in defense, and 600 billion in discretionary………..the house voted and approved and went into affect last month. It was different from the Cliff Jump which were tax cuts. The supercommitte failed, Paul Ryan voted against it………………….There seems to be more fucking cans of spahetti’o’s than we know what to do with.

  9. ANonOMouse says:

    The only thing that keeps me from despairing on this issue of entitlement cuts is that stepping on the 3rd rail has always been a disaster for anyone who’s tried and we’ve seen it tried a number of times, the most recent was the push by GWB.

    I’ve had some concerns, especially since the economic collapse in 2008, that the Washington insiders would attempt to deconstruct SS in a stealth fashion. I’ve expected this stealth deconstruction to begin with means testing, which is the primary reason I have never supported it, although I do think there’s a good case to be made for it. If it’s true that the powers-that-be, which to my mind is a conglomeration of GOP & DEM pols who shill for the Elite, both clandestinely and openly, want to bring down SS/Medicare, the preferable way to sell it would be in this unstable economic environment. This constant brinksmanship is the perfect smoke screen to accomplish this because the public is confused, distracted and doesn’t really understand that the safety nets are being dissembled gradually for the more nefarious purpose of eliminating them altogether. I do think a Dem POTUS is the perfect cover for selling this, especially since he is the person who EVERYONE, on the left and the right, expects to protect the safety-nets. As we all know Obama is the master of the soft sell.

    Am I beginning to sound like a conspiracy theorist?

    • RalphB says:

      Well, something is going to be done about health care costs or we’re going to be like the snake that eats it’s own tail. There are a couple of fairly simple things which would work fine for Medicare without harm to a patient. Repeal the law which forbids Medicare from negotiating with Pharma companies for lower drug costs being the most obvious. Since Medicare premiums are currently means tested, increase the means testing to be more aggressive and reach higher incomes.

      If Medicare could negotiate lower drug costs, and publicize those costs, private insurance companies would start getting lower prices and overall health care spending for the country would drop so some extent.

      • ANonOMouse says:

        Totally agree Ralph…..It’s the cost of healthcare, not the fault of the recipient of healthcare and certainly not the fault of Medicare/Medicaid recipients. It’s the Pharmaceutical Companies, the Medical Equipment companies, the Diagnostic services, the for profit hospital systems, the Physician services, the for Profit Insurance Administration, in essence UNBRIDLED capitalism is the culprit.

      • bostonboomer says:

        Many experts have recommended having doctors paid by the patient rather than billing for each individual procedure.

      • RalphB says:

        Yes BB, that’s the “outcomes” based method. I’m all for it and it would certainly lower costs by a lot. To some extend, physicians would do some reorg of their practices to realize more money from that method of payment but even that would mean better care for patients at lower costs.

      • ANonOMouse says:

        If I remember correctly Obama supports the “outcome” method of payment. It makes sense to me too, but I don’t think Docs will go for it, and it’s ultimately the providers, the hospitals and the drug companies that swing the biggest stick

      • ecocatwoman says:

        Steve Brill, who wrote a lengthy piece in the latest Time magazine about our health care system, was on The Daily Show last week & on The Diane Rehm Show this week. Here’s a link to Diane’s show – it was really excellent, IMHO: Brill did some real in depth research, spoke with patients and others. Give a listen, if you’re interested.

      • RalphB says:

        I read Brill’s opus in Time. I liked his research fine but his conclusions on fixing the problem were just wrong. In fact, they were bizarrely wrong.

  10. bostonboomer says:

    Greg Mitchell at The Nation — From Legend to Laughingstock: Bob Woodward Cites Bogus ‘Threat,’ Calls Obama ‘Nixonian’

    Meanwhile, we are waiting for Bob to call a press conference and declare either (1) “I am not a kook” or (2) “You won’t have Woodward to kick around anymore” or maybe (3) “Follow the dummy.” Or, à la The Godfather, he’s petrified that he will wake up tomorrow and find in his bed a horse’s…ass.

    BTW, Woodward should know what real White House retaliation looks like. After all, he was forced to testify at the Plame trial.

    • RalphB says:

      Dave Weigel: Lanny, You’re Out of Your Element

      It’s at moments like these when reasonable people wonder: Is Politico engaged in a massive psy-ops trolling exercise?

      Did Gene Sperling effectively handle his interactions with Bob Woodward? Hardly, says friend and former colleague Lanny Davis.

      What kind of fool offers himself up as an expert on a media story, doesn’t familiarize himself with the story, and weighs in anyway? This whole affair is working like flypaper for D.C.’s thriving population of know-nothings, and for that, maybe, we should appreciate the massive trolling campaign.

      Even a scumbag lobbyist wants some of the publicity.

  11. mjames says:

    Ever since the Catfood Commission (the members of which were handpicked by Obama and the very existence of which was blatantly unconstitutional), Obama’s mission has been clear: cut Social Security. Maybe he’s never said it explicitly, but his actions have always spoken louder than his words (FISA, anyone?).

    And, as the “Affordable (ha ha ha) Care Act” gets implemented, wait and see how much more it will cost all of us. Medicare for All or single payer would solve the problem of healthcare costs, but that would be regulated capitalism and we cannot, we simply cannot, have that. Corporations have feelings too, don’t they?

    This is a guy who picks which folks he’s going to drop bombs on via drones – you think he gives a hoot about our keeping our tiny Social Security benefits? Hell, he won’t even release the memos allegedly showing how he has the right to kill any of us any time any place.

    Good pick-up, nonetheless. Maybe the Bots will learn something. Lord knows, they are incredibly slow learners.

    • bostonboomer says:

      As I wrote in my post, Obama said pretty explicitly in his book Audacity of Hope, that he wanted to privatize (i.e. cut) Social Security. That is the main reason I didn’t support him in 2008.

      The important thing from my point of view is that anyone who cares about the safety net jump on every opportunity to call attention to Obama’s goal so that people who aren’t paying as much attention as we are will raise hell.