To re-engage with Republican lawmakers, Obama is doing things he has never done. How the GOP forced Obama's hand

President Barack Obama used to want a grand deficit deal because he philosophically believed it was best for the country, and politically believed it was best for him.

Now he needs it because he has no choice.


Obama’s failure to avert $85 billion in spending cuts known as the sequester underscored the limits of his outside strategy and signaled that he could not persuade Republicans to raise revenue again without a comprehensive agreement to overhaul the Tax Code and entitlements.

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A lull in the deadline-driven budget battles could soon give way to a fresh round of fiscal crises — from rising public pressure to lift the sequester to a looming summer deadline to increase the debt limit. If the president is to have any hope of resolving either fight to his liking, he’ll need more revenue. But Republicans won’t even consider it unless entitlement reforms are on the table.

So after more than two months in hiding, talk of a grand bargain has suddenly resurfaced in Washington.

Obama is doing things he’s never done — like dine out this week with a dozen Republican senators at a meal in which they talked fiscal issues, invite House Budget Committee Chairman Paul Ryan (R-Wis.) to the White House for lunch — and to re-engage with lawmakers after almost two years of campaigning against them.

“This week, we’ve gone 180,” House Speaker John Boehner (R-Ohio) said Thursday. “After being in office now for four years, he’s actually going to sit down and talk to members.”

( PHOTOS: Obama’s dinner with Republicans)

There isn’t any irrational exuberance in the White House that a big deal is back within reach, one senior administration official said, but changing circumstances have given the president some hope.

“There is an increased focus on engagement because of the opportunity the circumstances provide,” White House press secretary Jay Carney said. “He is trying to make something good out of a bad situation. We don’t have a looming deadline. Republican leaders have made clear they’re not revisiting, at least not anytime soon, the idea of postponing the sequester in a balanced way. So the sequester is here. The budget process, regular order, is moving forward.”

Republican and Democrats broadly agree on the need for a grand bargain and the general outlines of what it should entail — tax reform, entitlement changes and spending cuts — but that’s where the agreement ends. Both sides acknowledge that a charm offensive won’t seal a deal, let alone get the two sides close.

Privately, House Republican leaders think they’ve checked two of the three boxes of a grand bargain: first, the Jan. 1 tax increases; second, the spending cuts via the sequester. Now, in their view, all that’s left is entitlement reform. Top Republicans are also skeptical Obama would agree to the kind of tax reform that House Republicans have drawn a firm line on: The revenue to be generated by closing loopholes would go to lowering rates.

Obama respects Ryan’s intellectual heft, but the two are still at odds on nearly every important budgetary issue. Boehner won’t cede his leadership responsibilities to Ryan, who has political interests of his own. The Budget Committee chairman and 2012 vice presidential nominee won’t be eager to enter into private negotiations with a president whom most House Republicans don’t trust, particularly after Boehner promised to move all bills through congressional committees.

Most of the rank-and-file Republican senators at Obama’s dinner Wednesday at the Jefferson Hotel are vociferous opponents of his policies. But they did offer some signs of hope.

Senate Minority Leader Mitch McConnell (R-Ky.), who faces reelection in 2014, could be a major obstacle to Obama’s grand bargain plans. And Majority Leader Harry Reid (D-Nev.) would need to persuade many reluctant Democrats in his caucus to fall in line behind entitlement cuts that even he has opposed.

The fresh round of outreach to Republicans signals that the White House saw a need to recalibrate after its latest attempt to pressure Congress from the outside fell short.

The White House entered the sequester debate in January hoping to replicate the playbook of the $620 billion fiscal cliff deal: warn of a looming threat, highlight the damage to regular Americans, push a politically popular solution, hammer Republicans as protectors of the wealthy, watch their poll numbers crumble, wait for them to splinter and capitalize on the divisions. This approach forced Republicans to accept tax rate hikes for the first time in a generation.

But with the sequester, it didn’t work.

Republicans felt burned by the fiscal cliff deal, opposed further tax hikes and, contrary to West Wing predictions, would not cave. Senior administration officials also assumed Republicans wouldn’t be able to backtrack on their dire warnings of the sequester during the 2012 campaign and their party’s reliance on defense industry contributions.

“It was a gross miscalculation and a miscalculation that flew in the face of common sense,” said Jim Dyer, a former Republican appropriations aide on Capitol Hill. “They poked the Republicans once too hard.”

Former White House press secretary Dee Dee Myers said on MSNBC’s “Morning Joe” that the sequester fight showed that “there were limits to [Obama’s] effectiveness campaigning against the Republican House.”

“That approach wasn’t particularly successful,” said Myers, who was press secretary under Bill Clinton. “So it’s time to try something else. And this is something he’s been getting a lot of advice about recently, that he’s been a little aloof. He hasn’t invested time building relationships on either side of the aisle, quite frankly, and maybe it’s time to try a different approach.”

White House officials began privately acknowledging several weeks ago that the president would have to return to a big deal if he hoped to wring any more revenue out of Congress.

Boehner praised the effort Thursday, calling the Ryan lunch and the Senate dinner — featuring his buddies Richard Burr of North Carolina and Saxby Chambliss of Georgia — a “hopeful sign.”

“I’m hopeful that something will come out of it,” Boehner said. “But if the president continues to insist on tax hikes, I don’t think we’re going to get very far. If the president doesn’t believe that we have a spending problem, I don’t know if we’re going to get very far. But I’m optimistic.”

At a meeting at the White House last Friday, Boehner implied to the president that he should involve more members in the legislating process, according to a source familiar with the meeting. The speaker twice made the point that Congress should move legislation through regular order, so more people feel ownership in the process.

Robert Bixby, executive director of the Concord Coalition, said both parties may be realizing that short-term fixes are no longer possible.

“It is encouraging that the people are talking because it demonstrates that they are not stupid, that they can look at what is happening,” Bixby said. “Both sides dug themselves into a rhetorical hole, and they need each other to climb out of that hole.”

Republicans are only half of the equation, and a large-scale deficit deal will almost certainly need Democrats to pass the House. Although Republican and Democratic insiders think Obama’s party will fall in line, Minority Leader Nancy Pelosi (D-Calif.) isn’t ready to roll over.

Pelosi on Thursday said reforming Social Security alongside tax reform would be a nonstarter — effectively ruling out chained CPI, a Republican favorite.

Pelosi said that raising the Medicare eligibility age is a “scalp” and “trophy” for Republicans that “doesn’t produce any money.”

Pelosi seemed to think that the meetings Obama was holding were a waste of time: Republicans don’t seem to be moving toward Obama.

“As one who has been a leader in the Congress for a while, I always think it’s very important to understand the motivation of members and what the possibilities are in terms of courage,” she said. “And so I think it’s important that they all get to know each other better.”