Obama's Deficit Speech Planned Months In Advance As Part Of Far-Reaching Effort

WASHINGTON -- President Barack Obama’s much discussed speech last week on how to remedy the country’s fiscal future was part of a far broader, more strategically detailed political strategy than has been previously reported.

Several high-ranking administration officials have confirmed that the White House laid out plans for the address as far back as the last calendar year, with the president’s economic team and other senior staff members “meeting regularly since February to put the policy together and work on the speech.”

In presenting a fiscal roadmap, the administration aimed to demonstrate Obama's fundamental seriousness towards what is widely perceived to be a looming deficit crisis. But the speech also illuminated both the lack of communication between the White House and Capitol Hill and a growing conviction among insiders that the president must move the deficit debate off center stage in order to tackle other domestic priorities.

The address, delivered at George Washington University last Wednesday, outlined an expansive approach towards leveling the federal government’s balance sheet. Obama expressed a need for simplifying the tax code and raising the rates on the highest earners. He called for a “debt fail-safe” trigger, mandating Congress to pass across-the-board spending reductions if the nation’s debt does not decline. He advocated stronger cuts in the Pentagon’s budget and less waste in Medicare.

His remarks, in all, were positively received by Democrats and derided as partisan waste by Republicans.

Yet build-up to the speech illustrated more than reactions to it. Capitol Hill officials, including the White House's top allies, say they were left completely in the dark. No one, it appears, knew Obama would deliver an address until his top aide, David Plouffe, announced plans on the Sunday shows. Key aides were briefed on its content only days (if not hours) before the president took the stage.

“Members and staffs had no idea what they were going to say until about four hours before the speech—three days after the speech was announced," said a senior Senate Democratic aide. "It was pretty ham-handed in its roll out and members weren't pleased."

The abundance of secrecy left the impression that White House officials came up with the idea for Obama’s speech at the eleventh hour in an effort to divert attention away from the debate raging in Congress. “They were scrambling to change the subject from the budget debacle and this was what they latched on to,” said the aide.

Having failed to effectively brief members of Congress on the details of his plan, few lawmakers could therefore amplify the president's message.

Administration officials, for their part, steadfastly refute the idea that they simply "winged" it.

According to one Obama aide, the president and his team decided in December that he would have to “lay out a comprehensive plan” for deficit reduction “after the FY2011 funding debate had completed.”

Another White House official described the planning as even more specific, asserting, “Its been on the schedule for the Wednesday after the [continuing resolution avoiding a government shut down] was resolved for months now.” Because a vote on the continuing resolution was delayed on several occasions, the date of the speech remained, consistently, in flux.

According to these individuals, the President’s staff had been considering university locations near or in Washington, D.C. for venue well before the speech was announced, with an eye toward delivering subsequent deficit-focused addresses outside the nation's capital the following week.

Michelle Sherrard, a spokesman for George Washington University, did not have a specific date for when the administration first contacted the university. She noted only that "The White House and GW regularly communicate about the possibility of hosting upcoming events on campus."

One administration aide defended congressional outreach, adding, “Throughout this process the President’s team has been in touch with leaders on the Hill, including both the Gang of Six [Senators meeting on their own deficit proposal] and Congressman [Paul] Ryan, and other stakeholders like the deficit commission chairs.”

“In touch,” however, remains an inherently subjective phrase. As late as the Tuesday night before the speech was delivered, one extremely close White House ally professed to not having a clue about what would be said. “I don't think they have briefed anyone and I am not sure the speech is done!”

In fact, the speech wasn’t done. According to an administration aide, “the president worked until late in the night Tuesday, and put final touches on the speech on Wednesday morning.”

Why did it take so long to finalize the details on a speech planned months in advance?

For one, various areas of policy disagreement within the White House remained unresolved. In particular, officials familiar with the discussions say, Obama's economic advisers warned against calling for a final balance of three dollars in spending reductions for every dollar generated in additional tax revenue, arguing the ratio was too explicit.

Medicare reform sparked another element of disagreement. In his speech, the president proposed strengthening the Independent Payment Advisory Board, a group tasked with finding excessive and unnecessary spending within the system. Several aides wanted him to further outline specific ways to empower Medicare to negotiate over drug prices and medical procedures.

In the end, Obama kept the speech broad, leaving Democrats officials on the Hill largely pleased.

Several members of Congress also expressed agitation with the timing.

Obama’s speech came after Rep. Paul Ryan (R-Wisc.) unveiled his own budget plan, giving his own remarks the veneer of a presidential response rather than executive leadership.

Moreover, by calling for additional talks on deficit reform, the president miffed lawmakers either working on or invested in the Gang of Six talks currently ongoing.

“The fact that the president has come out with his vision should be a positive reinforcement, another indication that this is important work that needs to be done,” Press Secretary Jay Carney said on Monday in response to complaints Obama stepped into Gang of Six territory. “And the fact that the President built his vision by borrowing in many ways from the recommendations of the bipartisan commission on which a number of members of that Senate group sat… gives a good sign, a good indication, of the fact that there is a building consensus around the way to approach this problem. So he thinks it’s very complementary to the process.”

But many Democrats don't want "complementary." The Gang of Six already gives progressives angina, with the Democratic members of the group -- including Sens. Dick Durbin (D-Ill.) and Mark Warner (D-Va.) -- openly supporting elements of Social Security reform and even extending the Bush tax cuts. Should the president end up complementing or even embracing their approach, the worry goes, no progressive counterpoint to Ryan's proposal will emerge. Instead, the distance between the Gang of Six and the Republican alternative will become the “compromise.”

The White House has been noticeably tight-lipped about its thoughts on Gang of Six conversations, perhaps because scarce information exists as to what, exactly, the lawmakers are discussing. But signs of mounting concern permeate both on and off the Hill.

When Vice President Joe Biden hosts a deficit reduction meeting with members of Congress at the Blair House on May 5, no Democratic lawmakers from the Gang of Six will be present. Instead, Senate Majority Leader Harry Reid (D-Nev.) is sending Finance Committee Chairman Max Baucus (D-Mont.) and Appropriations Committee Chairman Dan Inouye (D-Hawaii). Gang of Six member and Budget Committee Chair Kent Conrad (D-N.D.), one Democratic Senate aide relayed, was more than “irked” by his absence from the talks.

Other Democrats voiced relief over the Gang of Six absence, speculating that both Reid and Sen. Chuck Schumer (D-N.Y.) were growing wary about the bipartisan group's role.

Gang of Six criticism is more intense off the Hill, with several of the nation’s most powerful union groups laying down crisp lines in the sand over elements they consider non-negotiable, such as ending tax cuts for the richest Americans.

“Any plan to reduce the deficit that does not include ending the Bush tax cuts -- a clear contributor to the deficit -- is not a serious plan,” said Michelle Nawar, Director for Legislation at the Service Employees. “Every middle class family should be offended if Congress calls on them to bear the burden for reducing a deficit they did not cause while continuing to handout more tax giveaways to millionaires and corporations. We'll see what the Gang of Six proposes, but how could any Democrat support a plan that cuts needed services for seniors and children while continuing these expensive tax giveaways?”

Nawar's question presumably extends to Obama, who has punted once on letting the Bush tax rates for the wealthy expire (they will now lapse at the end of 2012).

A far more immediate and pressing concern, however, is whether the administration’s attempt to jump ahead of the deficit debate will yield the type of political fruits the White House envisions. The president’s advisers -- chiefly, former Senior Communications Aide David Axelrod –- have long seen benefits to deficit hawk-ery in private polling.

But the payoff this time around has been limited: An ABC News/Washington Post poll released on Tuesday showed that 57 percent of Americans disapproved of the way Obama is handling the economy.

“I think they were concerned about how to give the president credibility on this issue and how to win over some independents,” one top party strategist said of Obama’s speech on Wednesday. “The irony is it won’t give him any. He could have offered $10 billion more in cuts for the CR and it would never be good enough for the GOP.”

Jen Bendery contributed to this report.

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