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Obama's new budget proves the grand bargain is finally dead

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One of the most striking elements of the Obama administration's budget proposal to be released later today isn't anything that it's in it. It's what isn't in it — at least according to briefing documents provided by the White House. There's no entitlement reform. There's no Obama negotiating with himself. There's no bending over backwards to look reasonable to his adversaries or to centrist pundits. Every previous Obama budget has been about positioning himself for a legislative or electoral showdown. This one isn't.

And while It would be an overstatement to call it a liberal dream budget — left-wing Democrats could dream up plenty more — for the first time it's really Obama's dream budget. This is the end of the "grand bargain" era, and instead an opportunity for Obama to lay out his priorities for the long term — from transportation infrastructure to transforming child care. Rather than position himself in advance of a potential compromise, he wants to outline his vision for a future that will extend well beyond the life of his administration.

Make no mistake, Obama is still proposing things that would reduce the deficit. His budget offers $640 billion in net deficit reduction via a tax reform plan that would make the rich pay more. He says comprehensive immigration reform could deliver $160 billion more in deficit reduction. And he has $400 billion worth of ideas to build on health care cost containment ideas from the Affordable Care Act.

But these are purely aspirational statements of purpose. They are ideas that Obama believes in and wants to go on the record as supporting. They are rather obviously not things Republicans are going to vote for. Obama is trying to clarify where he stands on fiscal policy, not hoping they become law.

Here are five reasons for the new tone.

1) Compromise didn't work

This is the big one. Republicans proved in 2011 and 2012 that, for better or for worse, they take their anti-tax pledges very seriously. Trying to focus the national conversation on the idea of a big bargain on the budget doesn't lead to compromise on the budget.

There actually are a few big issues — including the Trans-Pacific Partnership and patent reform — where Republicans and Obama are very close, plus a few other topics (transportation infrastructure, K-12 education) where compromise is certainly possible. Attempting to launch a big new round of budget negotiations risks filling the congressional agenda with a topic on which there isn't going to be any progress. A budget proposal Republicans will just dismiss out of hand lets Congress move on to other grounds.

2) The deficit is much lower

This is not really a good reason in logical terms, but politically speaking one major reason for the reduced emphasis on long-term deficit reduction is that the short-term deficit is much smaller than it used to be.

The Great Recession hammered tax revenue, shrank GDP, increased welfare costs, and prompted a big short-term stimulus. That led to a 2009 deficit of nearly 9 percent of GDP. The 2014 deficit was just 2.8 percent of GDP, and this year it's projected to be even lower at 2.6 percent of GDP. Combine this with ultra-low federal borrowing costs, and there's simply much less political concern about the deficit than there was a few years ago.

The irony is that even though the short-term deficit used to be really high, the short-term deficit was never actually a problem — the issue was always the burden of long-term Medicare and Social Security costs. Conversely, even though the deficit has shrunk enormously the long-term fiscal picture looks a good deal worse. Deficit hysteria arose in 2010 for bad reasons, and five years later it's faded as those reasons have faded away. But the long-run issues are still lurking.

3) Acting reasonable didn't pay off politically

Obama's grand bargaineering wasn't just about trying to reach a grand bargain. It was also about trying to reap the political benefits of positioning himself as reasonable and open to compromise, and his GOP opponents as unreasonable.

It didn't really work.

After huge gains in 2006 and 2008, Democrats lost Senate seats in 2010, lost some more in 2012, and then lost some more in 2014. When Obama got to argue the merits of his agenda versus those of Mitt Romney, he secured reelection. But he's never succeeded in prompting some kind of broader backlash against congressional Republicans. Previous proposals to cut Social Security benefits or raise the Medicare eligibility age prompted infighting with other Democrats without delivering any tangible political wins.

4) Obama's new plan is more popular

Barack Obama has long been an advocate of higher taxes on the highest-income Americans. In the 2012 "fiscal cliff" negotiations, he accomplished a fair amount of that tax hiking agenda but there's still a decent ways to go in terms of achieving his full aspirations in this regard.

Republicans really don't like this idea.

Back in the grand bargain days, Obama's notion was to trade something Republicans hate (tax hikes on the rich) with something that's anathema to liberals — rollbacks of Social Security and Medicare. On a PR level, this was an odd combo. It paired something that rich people would furiously resist — higher taxes — with two ideas that are deeply unpopular with the middle class. The new Obama tax proposition is a much cleaner sell — take money from the rich in order to cut taxes on the middle class. The result is an agenda that has the same enemies as the old agenda, but could also find champions.

5) Progressives have found their next cause

This last reason is perhaps the most subtle, but it's important. The grand bargain happened in the wake of the contentious passage of Obamacare. It was a moment at which leading Democratic Party politicians seemed exhausted by the effort to expand the welfare state, and actually a little uncertain where they wanted to go next.

Over the past few years, that's changed.

From Hillary Clinton's circle to the new budget document, it's clear that there's an emerging Democratic consensus over what's next — children and family policy. There are a few different threads to this, including early childhood education, special tax benefits for working moms, child care subsidies, and paid sick leave and maternity leave. Presidents generally don't accomplish everything they propose. Harry Truman and Bill Clinton both made pushes for universal health care before Obama made it happen. Now Obama is using the last two years of his presidency to lay down some markers around universal access to leave, child care, and preschool that he hopes will be redeemed by a future president.