Chicago 'Cabal' Convinced Obama to Let Ryan Lead on Budget Reform

During a presentation at the Wall Street Journal's "CEO Council" in November 2011, Democrat Erskine Bowles placed blame for the failure of the National Commission on Fiscal Responsibility and Reform on a "cabal" of Chicago politicians surrounding President Obama. Bowles said the group convinced Obama to stand aside and let Rep. Paul Ryan lead the way on budget reform in order to gain a political advantage over Republicans.

In November 2011, The Wall Street Journal assembled over 100 CEOs of top companies to hear from political leaders on a range of financial topics. There were dozens of featured speakers from both sides of the aisle including Eric Cantor, Timothy Geithner, Jon Huntsman, Jack Lew, Paul Ryan and both co-chairs of the Simpson Bowles commission. During their presentation, the two men were asked why their recommendations were not adopted or advanced by the President.

Bob Reynolds, Putnam Investments: Your presidential commission delivered your report in December. How surprised were you that your commission gave the president tremendous coverage to do something, and it wasn’t even mentioned in the State of the Union?

Erskine Bowles: If you think you were surprised, you should have looked at us. I negotiated the budget for President Clinton. And every investment banker will tell you the key to success is knowing your client and defining success up front. So, I knew what success was on his part, and I could go in there and negotiate the deal. I did not know President Obama, and neither did Alan. So, we spent a tremendous amount of time with him and his economic team up front defining success. And we negotiated a deal that got a majority of Republicans to vote for it, so he had plenty of cover on the other side. It also exceeded every single one of the goals that he had given us. I fully expected them to grab hold of this. If it had been President Clinton, he would have said, “God, I created this, this is wonderful. It was all my idea.” So we were really surprised.

My belief is that most of the members of the economic team strongly supported it. Like every White House, there’s a small cabal of people that surround the president that he trusts and works with, and I believe it was those Chicago guys, the political team that convinced him that it would be smarter for him to wait and let Paul Ryan go first, and then he would look like the sensible guy in the game.

The first part of Bowles answer is nearly identical to one he gave during another 2011 speech which Breitbart News published three days ago. However, in the CEO Council appearance Bowles went farther and specifically placed blame on the cabal of Chicago politicians surrounding the President. Though not identified by name, this group would likely include Rahm Emmanuel, David Axelrod and Valerie Jarrett.

Rather than lead on budget reform, Bowles says the President allowed Paul Ryan to do so knowing he could then criticize the Ryan plan and gain political advantage as the "sensible guy." The commission's recommendations did not receive the necessary 14 votes to be considered a formal recommendation, however the plan was out in December of 2010. The President could have embraced it then. Instead, he waited. Paul Ryan's original Path to Prosperity budget was passed by the House on April 15, 2011.

Obama's cynical move was noted recently by left-leaning commentator Ezra Klein. Klein points out that the Obama Team anticipated running against Ryan's budget all along. When it didn't receive the attention necessary to villain-ize it properly, Obama gave a speech just two days before Ryan's plan was passed to help raise its profile:

On April 13, 2011, with Ryan sitting in the audience, Obama delivered a searing speech, perhaps the toughest of his presidency to that point, on the subject of Ryan’s budget. He said it would mean an America that “would be fundamentally different than what we’ve known throughout our history.” He called it “a vision of our future that is deeply pessimistic.”

The gambit largely worked. The news media devoted more coverage to Ryan’s budget and, perhaps more important, Republicans furiously rallied around Ryan. By pitting his presidency against Ryan and his budget, Obama helped make Ryan the de facto leader of the Republican Party.

What Bowles and Klein, both Democrats, are saying is that the President's abdication of leadership on budget reform has been part of a considered political re-election strategy beginning in 2010. The President chose not to lead on much needed reform knowing Paul Ryan would do so and thereby make himself a convenient political punching bag during a divisive campaign. Simply put, the President cares more about getting himself reelected than he does about addressing the dire financial situation the nation is facing. It's hard to imagine a harsher criticism of presidential failure or a better reason to replace Obama with real leadership this November.


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