Go big, go medium, go small - but don’t go home. Those seem to be the options facing President Obama, Democrats and Republicans in Congress as all three sides grapple with the idea of a grand bargain that will cut the federal budget deficit, by as much as $4 trillion, through a series of spending cuts, entitlement cuts and “revenue increases” (higher taxes). President Obama took to the microphone this morning to argue for the “go big” option, believing that now is as good as any time to make the series of hard choices that will be necessary to trim a $14 trillion deficit and structurally change the finances of a federal government that seem to be perpetually in flux. Speaker of the House John Boehner seemed to chose “go medium” when, late on Saturday, he announced that he was withdrawing from his direct negotiations with President Obama because Republicans would never agree to any new tax increases.
“Go small” could become the only practical option left - trimming spending and still increasing the federal debt ceiling while putting off the politically difficult sacrifices that would have to be made by both parties and all Americans, including cuts to entitlement programs like Social Security and Medicare and raising taxes. And still, there is the “go home” elements in both parties that are so entrenched in their positions—no changes to Medicare, no new taxes—that any kind of deal might prove impossible. Is the time ripe, as President Obama believes, for a sweeping deal that fundamentally alters the way the federal government does business? Or is it time to give up, take a deal, no matter the size, and kick the can a little further down the road?