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Deficit Negotiations Collapse — Are Progressives Cheering?

Now that it is clear that a possible deal between Republicans and the White House has collapsed, Democrat activists are breathing easier tonight. They may even be breaking out the champagne.

Throughout the week progressives were panic stricken that a deal was close at hand. Over the week they launched a political campaign to torpedo any White House deal. They may have succeeded tonight.

This outcome reflects the point of view espoused by Mother Jones’ Washington bureau chief David Corn. Yesterday he predicted: “It may well be that for Obama the best political outcome is no deal.”

As talks broke down late today, House Speaker John Boehner (D-OH) pointed an accusing finger at the president, saying the White House upped its demands by insisting on $400 billion in new taxes.

In the last 24 hours there has been widespread fear among Democrats that the president was poised to surrender to Republicans on spending, entitlements, and taxes.

Nearly giving up on the White House, stricken progressive groups this week launched a counter campaign called an “Emergency Call-in Day.”

Activist groups hoped to generate tens of thousands of calls into Congress on Friday. They saw the House and Senate as a last ditch firewall to any bad White House deal. The ad hoc coalition said they were “demanding that they reject the terrible deal being reportedly negotiated by the White House,” according to the organizers. The group consists of MoveOn.org, the AFL-CIO, CREDO Action, Democracy for America, PCCCAFT, Campaign for America’s Future, and Change Nation.

Moveon.org director Justin Rubin is quoted in The Nation today as saying: “The Democratic base did not work night and day to elect Democrats so that they could cave to Tea Party extremists.”

Across the board Democrats still seem dispirited and alarmed.  They have staked out “no-no-no” positions on virtually all proposals that are circulating in Washington. This campaign indeed may have resulted in the retreat by the president.

Democratic fears spilled over to hysteria on Thursday when the Washington Post erroneously reported a deal that would cut federal spending by $3.7 trillion over ten years and contain no new taxes.

Both the White House and Boehner said no deal had been cut. But it still triggered a congressional revolt among Democrats on the Hill. Politico reported yesterday that reports of the deal sparked “a fierce, angry, even screaming reception at the Senate Democratic Caucus” with Jack Lew, President Obama’s budget chief.

Washington Post blogger Felicia Sonmez wrote that “House Democrats and liberal groups were livid” about outlines of the deal.

Politico’s Mike Allen, in an e-mail this morning, reported that the White House stances “infuriate Senate Democrats, who complain that the president’s chief of staff, Bill Daley, is too quick to make concessions to Boehner.”

SEIU union President May Kay Henry has called reports of a deal with Republicans “morally wrong.” She told The Nation that with most of the the deals publicly floated “Medicaid will be eviscerated, access to healthcare for millions of Americans will be gutted.”

Rep. Elijah Cummings (D-MD) steamed that “[i]t would concern me greatly if these folks – the tea party group – have been able to convince the president to go along with a deal that basically gives them everything they want.”

Corn also warned that “House Democrats are poised to go ballistic should Obama reach an agreement with Republicans to squeeze the entitlement programs.”

Unions are taking aim at the “Gang of Six” proposal being crafted by three Senate Democrats and three Republicans. They bought a full a page ad around the nation denouncing it. Earlier in the week President Obama praised the Gang of Six proposal, which would cut Medicare and Social Security. The ad says that the compromise “is bad for working families.” It was paid for by the AFL-CIO, the National Education Association, American Federation of State, County and Municipal Employees, the Food and Commercial Workers Union, and SEIU.

MoveOn.org director Justin Rubin called upon Democrats in Congress to stop the Gang of Six deal. He called it a “total non-starter and Democrats in Congress should rule it out immediately.”

The level of discouragement among liberal Democrats became clearer when today CNN  released its latest public opinion poll that showed President Obama’s  approval rating fell to 45%.

CNN’s pollsters said the continuing downward spiral for the president was  “driven in part by growing dissatisfaction on the left with the president’s track record in office.”

The news organization did not publish it anywhere on its CNN home page. It was buried on a separate web site at its specialized CNN Politics page.

CNN Polling Director Keating Holland explained that one major source of the dissatisfaction are reports that the president will concede to Republicans on entitlements: “It’s likely that this is a reaction to some of Obama’s recent actions, including his willingness to discuss major changes in Social Security and Medicare as part of the debt ceiling negotiations,” he concluded.

The president’s retreat means he is throwing the dice that public opinion will support the White House if there is no deal.

No one still knows what kind of plan will emerge. But if Democratic insiders who have an ear into the White House are clanging alarm bells, it’s possible Obama, hoping for a second term, may have been close to securing a Grand Bargain with congressional Republicans.

But it was not to be. Apparently he believes that it is more important to secure his own base rather than continue to see the continued slide in popularity among his supporters.

In the end, the nation loses.

Boehner did not announce the collapse in talks until the stock market closed.  If there is no more movement over the weekend, expect a massive sell off on Wall Street.