Gyory: Obama should try 'spinach' approach

Bruce N. Gyory is a political consultant with Corning Place Consulting and an adjunct professor of political science at the University at Albany.

In about two and a half weeks, if the debt limit isn't raised by Congress, the nation will default on its obligations. Financial experts project a crisis in the markets at a tenuous time in our fitful recovery.

Both parties should act in the national interest.

But it's hard to make tough political choices with murky polling data. Congressional leaders on both sides tend to see what they want to see.

In May, the Pew Research Center found 48 percent of Americans believed that merely raising the debt ceiling would just lead to higher spending and greater debt. This poll bolstered Republican resolve to pare down the deficit without increasing revenue. A Gallup poll also found that month that 73 percent were concerned that failing to raise the debt limit could hurt the nation's economy.

And in a late-June New York Times/CBS News poll, 53 percent of registered voters cited the economy and jobs as the country's most important problem -- compared with only 7 percent citing the budget deficit. Two weeks earlier, an NBC News/Wall Street Journal poll found that 63 percent wanted Congress to "worry" most about keeping the deficit down.

These seeming contradictions are easily reconciled. The public knows President Barack Obama and Congress can cut spending, but some mistrust the Republicans on the straight extension of the Bush tax cuts while others mistrust the Democrats on the stimulus program. After all, the former did nothing to ward off the recession, and the latter hasn't turned the corner on unemployment.

Nevertheless, beneath this murkiness in public opinion lies a consensus. A majority would support raising the debt limit if it's tied to significant deficit reduction, weighted more heavily to cuts, but including a progressive revenue package that lowers rates but raises overall revenue by closing tax loopholes. An April Gallup poll revealed that a majority of Americans believe that upper-income Americans and corporations pay too little in taxes.

Such a plan should, with commonsense savings, sustain and not end Medicare and Social Security. If this plan sounds like the balanced Bowles-Simpson commission plan, it should.

Congressional Republicans have refused to budge on the revenue package, but the president has a trump card to play. Call it the "two spinach" approach.

Obama and the congressional Democrats would gain political credibility by agreeing to upfront spending cuts -- they eat their spinach first -- in return for the extension and expansion of the bipartisan payroll tax suspension, passed last December, geared to creating jobs.

No one wants revenue increases now, given the faltering recovery. In fact, the Bush cuts were only extended through 2012. This allows the president, if the Republicans won't enact a revenue piece as part of the debt- limit extension, to reiterate his pledge to veto any further extension of the Bush tax cuts, with a new wrinkle: Obama can pick a cutoff point of, say, $400,000 in income (as financial commentator Jim Cramer recently suggested) or $500,000 (as Sen. Charles Schumer suggested last December) for extending only a portion of the Bush tax cuts. All revenues from incomes above that cutoff could go toward deficit reduction -- up to $400 million annually, depending on where the line is drawn.

The congressional Democrats won't like the uncertainty of securing the revenue portion of this package in this way. But the president can lead them into the 2012 elections with a seminal issue: the need for Bush tax-cut revenues to be part of long-term deficit reduction.

That would mean the Republicans would have no choice but to eat their spinach later. If Obama is re-elected after having campaigned on a partial extension of the Bush tax cuts, Republicans must come to table. Precisely because they will not want the federal government to secure the full revenue windfall from the Bush tax cuts not being extended across the board. At that point, Obama can play the obstinance card the Republicans are playing now on revenue.

British philosopher A.N. Whitehead long ago observed that the test of military genius was the ability to see opportunity amid chaos. The same is true for presidents. Will Obama seize this political opportunity to lead Congress away from the ledge of petty politics?