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Obama’s Lost Leverage

It wasn’t supposed to be like this for the White House and a re-elected president with political capital to spend.

But President Barack Obama is in a position of supplication to Hill Republicans, talking loudly and often about the harm of automatic budget cuts but lacking the leverage to get the GOP to buckle.

Senior administration officials had for months predicted that Republicans would cave on the sequester and agree to more taxes, even after agreeing to $600 billion in tax increases in the New Year’s Eve fiscal-cliff deal.

After all, aides noted, Republicans had caved again and again: on the 2012 payroll tax cut, on tax rate increases for the wealthy and on a debt ceiling extension.

Why not one more GOP rollover? Polls seemed solidly in the president’s favor.

But so far it’s not working out as the West Wing planned.

Obama held out hope that the GOP might yet yield following a face-to-face meeting with congressional leaders that accomplished nothing.

He said he understands that Speaker John A. Boehner of Ohio has strong opposition in his conference to allowing any more revenue now.

“My hope is that they can do it later,” after the effects of the sequester kick in across the country, the president said.

But Obama gave away the one big legislative stick he has in his arsenal. He said he wouldn’t risk a government shutdown by demanding a sequester fix in the continuing resolution needed to fund the government past March 27.

“I think it’s the right thing to do to make sure that we don’t have a government shutdown,” he said on March 1.

The White House had been quietly signaling to its Democratic allies on the Hill that Obama would not threaten a veto out of fear the public would blame Democrats for the shutdown.

But the decision only underscored what many Hill Democrats believe was a major negotiating error by the White House and Vice President Joseph R. Biden Jr. in the fiscal-cliff deal.

By making all of the tax cuts permanent but only avoiding the sequester for two months, the president traded away most of his leverage in return for only half of the revenue he had been seeking — and no clear way to force Republicans to the table for more.

“It’s playing out exactly as we warned them it would,” a senior Senate Democratic leadership aide said.

It’s not as if Republicans were shy about making that argument at the time: GOP leaders immediately said that the deal effectively set in stone revenue for the president’s second term.

The sequester’s deep cut to the Defense Department budget was supposed to be the club that cowed the GOP, but the party’s defense hawks are now outnumbered by Republicans who put cutting spending at the top of their priority list.

Indeed, after the fiscal-cliff deal, Republican leaders regrouped. Boehner repeatedly told his restive conference they would stand firm on the sequester.

Boehner and Senate Minority Leader Mitch McConnell of Kentucky stuck to a mantra that worked to unify their fractious party — the president had already gotten his tax hikes and now it was time for spending cuts. Boehner and McConnell, the master of back-room deals, also promised their rank and file that the time for private deal-making was over.

Republican aides said the GOP has maneuvered the president into a corner. Aides believe the sequester will affect Democratic constituencies more deeply than Republicans’, and by adding defense-related bills into the continuing resolution, they feel they can pacify their own hawks longer than Congressional Democrats can keep in line their members who cherish social programs.

“It’s going to be more comfortable for us than it is for them,” a House GOP leadership aide predicted.

Indeed, another senior Senate Democratic aide acknowledged that it will be hard for Democrats to keep holding the line against GOP efforts to give the president flexibility on how to implement the sequester.

Republicans also believe that they are bearing dividends of the “Williamsburg Accord,” in which Republicans agreed to push off the debt ceiling, and noted they will move a CR well in advance of a shutdown.

“Without a catastrophic news-friendly deadline … pressure builds slowly rather than a sudden cataclysmic event, which makes the president’s bully pulpit less effective,” the House aide said.

All this has Republican leaders thinking it is just a matter of time before Democrats come to them, hat in hand, acceding to a sequester deal without tax increases.

The president seems to be at a loss as to how to get Congress to bend to his wishes.

“Sometimes I reflect, you know, is there something else I could do to make … some of the House Republican caucus members not — not paint horns on my head?” he asked at a White House news conference on March 1.

Obama joked that people seem to think he should perform a “Jedi mind meld” with Republicans to get them to agree, and at another point he rhetorically asked the reporters in the room for advice.

He gamely warned again of the consequences of the sequester — although he seemed somewhat more subdued than at the rallies he’s had across the country against the cuts.

He insisted the sequester would cost 750,000 jobs and knock as much as 0.5 percent off of gross domestic product this year.

“We’re not making that up. That’s not a scare tactic. That’s a fact,” Obama said of the economic consequences.

He also kept up his attack line against the GOP.

“They’ve allowed these cuts to happen because they refuse to budge on closing a single wasteful loophole to help reduce the deficit,” he said.

He said he would reach out to a “caucus of common sense” on Capitol Hill in both parties willing to accept both entitlement cuts and new revenue.

But, he lamented, “It is a silent group right now.”

Obama issued the order triggering the $85 billion sequester in federal spending at 8:31 p.m. on March 1.

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