In the fall of 1995, a year after the Democrats had lost control of both houses of Congress in a devastating midterm sweep, Bill Clinton’s advisers were so worried that he would give in to draconian Republican budget cuts that they joked about disconnecting the Oval Office phones to keep him from calling Newt Gingrich, then the Speaker of the House. Flying home on Air Force One from the funeral of the Israeli Prime Minister Yitzhak Rabin, aides maneuvered to keep the President from wandering back to sit with Gingrich (who promptly committed political suicide by announcing that he was toughening his budget demands in retaliation for being snubbed). In the end, though, Clinton stood fast for the quartet of Medicare, Medicaid, education, and the environment. That December, when he vetoed the Republican budget, precipitating the second of two government shutdowns, he used the same pen that Lyndon Johnson had used to sign Medicare into law, thirty years earlier. Confrontation over principles sent the President’s poll numbers up, as triangulation never did, and he coasted to reëlection in 1996.

Illustration by TOM BACHTELL

A few of those advisers are back in the White House, no doubt beset by déjà vu. In the months after last fall’s midterm wipeout, President Obama took to floating above the ugly congressional fray as if he were the unaffiliated head of state in a parliamentary system. In December, during the battle over the Bush tax cuts, he chided both sides for squabbling, and earlier this month, in the negotiations over the 2011 budget, he praised both sides for making sacrifices. While his supporters in public-sector unions around the country were desperately fighting—and, for the most part, failing—to retain their collective-bargaining rights, the President remained largely silent. The politics of his withdrawal were clear enough: in the wake of an electoral rebuke, Obama, like Clinton, was signalling to voters that he understood their displeasure. He was also positioning himself to be the candidate of the broad middle when he runs for reëlection.

The problem with this strategy was that Obama and his party sustained defeat after defeat. In order to secure an extension of unemployment benefits, the President broke a campaign promise to let the tax cuts for upper-income Americans expire. It was a deal that congressional Republicans, at the time still negotiating from the minority, were happy to get. In the budget negotiations, the Republican majority in the House managed to sucker Democrats by raising its bid after the White House thought that it had an agreement; in the end, Obama was forced to slash programs central to his domestic agenda, such as high-speed rail and environmental protection.

The Republicans now hold just one house of Congress, yet they have controlled the terms of the debate, because they understand that budget battles are about far more than numbers, and they’ve made the ideology behind their various bargaining positions startlingly clear: government should be reduced to gasping for air. What’s more, they’re willing to deploy legislative terrorism—threatening to shut down the government and to allow the United States to default on its debt—to get their way. In politics, the side with a fixed notion of ends and an unscrupulous approach to means always has the advantage.

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A decade and a half after Clinton and Gingrich, Republicans are once again trying to privatize Medicare, gut Medicaid (by turning it into block grants), cut education spending and regulations that protect the environment, and give yet another round of tax cuts to the rich. They continue to insist—despite years of evidence to the contrary—that market forces will lower health-care costs and that tax cuts will create economic growth and lift all incomes. “Ideology makes it unnecessary for people to confront individual issues on their individual merits,” the late Daniel Bell wrote. “One simply turns to the ideological vending machine, and out comes the prepared formulae.” Ideology knows the answer before the question has been asked.

Principles are something different: a set of values that have to be adapted to circumstances but not compromised away. Last week, the President remembered that he was a Democrat and gave a speech at George Washington University articulating his and his party’s vision of the positive role of government: “a belief that we’re all connected, and that there are some things we can only do together, as a nation.” He praised social-insurance programs, saying, “We’re a better country because of these commitments. I’ll go further. We would not be a great country without those commitments.” For once, he seemed eager to join a fight and draw clear lines.

The impetus for Obama’s return to politics was the budget plan of Representative Paul Ryan, the doe-eyed Wisconsin Republican who chairs the House Budget Committee. The Ryan plan, which claims to cut the deficit by $4.4 trillion over the next decade (and was passed by the House last Friday, along party lines), contains every Republican dogma about political economy, and Obama, in his speech, pointedly called them out, while Ryan sat seething in the audience: “There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. And I don’t think there’s anything courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill.” Obama then offered a counter-plan, vague on details, that would combine spending cuts and tax increases in roughly equal measure, imposing cost controls on health care but preserving entitlement programs, while claiming to arrive at roughly the same savings as Ryan, but guided by vastly different principles.

How much of this would the President—who has a record of giving things up even before sitting down at the table—be willing to bargain away? The distance between the two sides is so great that it’s hard to imagine any resolution this year. So, in 2012, the question will go to the voters, where it belongs, since elections should be arguments over principles. By the current wisdom, Obama will then join Clinton in the ranks of two-term Democrats, because most Americans value economic security more than fiscal austerity. If so, Obama will have Paul Ryan, in part, to thank.

All this suggests, not for the first time, that the President might be a better tactician than his critics. But outmaneuvering his political opponents is not the same thing as achieving a country that, as he said last week, “values fairness.” The most persistent and corrosive feature of American life over the past three decades is income inequality: it rose steeply during Clinton’s first term, and, despite his budget victory, it continued to go up in his second. Obama often discussed inequality during the 2008 campaign, and his health-care plan represented the most serious effort in a generation to reverse it. But last week he mentioned it only in passing. As he knows, the reform stage of his Presidency lasted less than two years. We have now entered the period of rearguard defense. ♦