President Obama talking to National Economic Adviser Gene Sperling, with Treasury Secretary Timothy Geithner on the phone. [Photo by Pete Souza]

President Obama talking to outgoing National Economic Adviser Gene Sperling, with former Treasury Secretary Timothy Geithner on the phone. [Photo by Pete Souza]

“Gene was reiterating what our position has been all along: that any big budget deal is going to have to include significant revenues if Republicans insist on entitlement reforms. And any budget deal needs to have first and foremost the goal of creating good jobs for middle class families and growing the economy””that’s our north star in any budget deal, big or small.” [Businessweek]

THE REPORT that Gene Sperling basically told Democrats that entitlements have to be on the table if they want to get a budget deal was met with rebuttals, but missed the crux of what Sperling meant. It’s not that entitlement cuts couched in reform, savings or economic rescue language are needed, it’s that President Obama long ago said he wanted them, so if Republicans can swallow revenue, it makes cuts to entitlements seem inevitable.

That’s a big difference.

From Joshua Green in Businessweek, quoting Sperling on a budget deal and entitlements, emphasis original:

“Sometimes here [in Washington] we start to think that the end goal of our public policy is to hit a particular budget or spending or revenue metric””as if those are the goals in and of itself. But it’s important to remember that each of these metrics “¦ are means to larger goals. “¦ Right now, I think there is among a lot of people a consensus as to what the ingredients of a pro-growth fiscal policy are. It would be a fiscal policy that””yes””did give more confidence in the long run that we have a path on entitlement spending and revenues that gives confidence in our long-term fiscal position and that we’re not pushing off unbearable burdens to the next generation. That is very important.”

That’s a vague, guarded, jargon-y Washington way of saying, “We’re going to have to accept entitlement cuts””get used to it.” Then came the justification, which was the weakness of the economic recovery…

Republican Rep. Tom Cole put revenue on the agenda on Friday when talking to Al Hunt. The devil of that offer is in specific details, especially if Democrats are going to start giving on entitlements, which will demoralize a Democratic base stoked after the shutdown win.

“The reality is, you’re going to have to have a deal here,” Cole said in an interview on Bloomberg Television’s “Political Capital with Al Hunt” airing this weekend. “And a deal means everybody gives something up.”

[…] “Both sides would like to deal with the sequester,” Cole said. “And we’re willing to put more revenue on the table to do that, and we would like to do it with entitlement savings.”

… Cole also indicated that the place to start with long-term cuts to entitlement programs is Obama’s own budget proposal. …

These include the chained Consumer Price Index, an alternative inflation yardstick, as a benchmark for Social Security cost-of-living increases, requiring higher-income Medicare beneficiaries to pay more and slowing Medicare growth by cutting payments to drug companies and health-care providers.

Senator Bernie Sanders is all over what’s been developing since 2011, when President Obama offered a grand bargain that Speaker John Bohener refused. Social Security Works has sent out emails with Sanders sounding the warning, and is gathering signatures.

Progressives will mount a strong argument against what’s being discussed in Washington, but they face a really tough fight this time around, much tougher than any time before. That’s because Republicans need a win very badly after what Ted Cruz and the Tea Party suicide caucus did to their brand during the shutdown and debt ceiling fiasco, so they may be ready to deal, with Cole’s hint at revenue an opener that meets President Obama’s demand. It’s likely that the White House also believes that a deal on entitlements for revenue is a legacy moment, because Democrats would never agree to do it for a Republican president, with the conservatives feeling this is their chance, because Obama’s been willing to deal on entitlements for revenue all along.

The NBC – Esquire poll that I’ve referred to continually since it came out doesn’t include a question on entitlements, but it does talk about spending. Here’s the graph that the White House, Democrats and Republicans are likely seeing reflected in their own internal polling.

Screen Shot 2013-10-26 at 9.54.16 AM

As you see above, this other tension is that while people in polls say they don’t want cuts to social programs, a majority of Americans, led by independents, do believe the U.S. is in real fiscal trouble. So, since we’re not at the stage where people are ready to cut further into the military budget, it seems, which is the real way we curb what’s going on, it’s revenue for entitlements in the budget board game.

What I’m laying out is the politics of it, like it or not.

If entitlement changes from Democrats are met with revenue from Republicans, the Washington to New York media establishment will sanctify it as a success and the steamrolling will start somewhere between “saving Social Security for future generations” and “not putting debt on the back of our children and grandchildren.”

Today, with President Obama serving up the grand bargain back in 2011, more than entitlements, the waste and bloat in the military industrial complex remains the real third rail of American politics.

The set up is beginning to gel, the talking point that everyone has to give on something their party values, which means no one will be happy. It’s the ultimate symbol for politicians that it’s a fair deal.

“Hopefully in the next year or so (we can) do something on a grand bargain. But the Republicans are going to have to retake their party or it will never happen. Because they have their mindset on doing nothing more on revenue. But until they get off that kick, there’s not going to be a small bargain.” [Washington Post]