Can Obama Corral Dems on Entitlements?

“The reason for the momentum is very simple. It is that Paul Ryan has become a down-ballot disaster for Republicans across the country.”

-- Rep. Steve Israel, head of the Democratic Congressional Campaign Committee, on Sept. 13 forecasting that Democrats would retake the House thanks in part to opposition to Rep. Paul Ryan’s budget plan.

Democrats spent nearly a billion dollars this year to win back eight or nine of the 63 House seats they lost in the 2010 midterm elections – not a great return on their investment.

While the Blue Team holds that the reason they fell so far short in their bid was Republican redistricting and while it’s also true that re-elected presidents traditionally have short coattails, the biggest problem for Democrats may have been in the message on the district level.

The plan for House Minority Leader Nancy Pelosi and her team was to use the budget blueprint pushed by House Budget Committee Chairman Paul Ryan and passed by the Republican-controlled House as a weapon against GOP incumbents.

According to conventional political thinking, this should have worked. Republicans passed a bill that would have created individual Medicare accounts for seniors to use to find private insurance. This plan didn’t just touch “the third rail of American politics,” but made the topic of entitlement reform its central premise.

In races across the country, Democrats used the old language: “would end Medicare as we know it” and “put seniors at risk.” The result was that after the election, Republicans still hold what, by historical standards, is one of their largest majorities in the post-war era.

As we wait to see what kind of budget deal is being cooked up between President Obama, Speaker John Boehner and Senate Majority Leader Harry Reid, most of the focus has been on whether Republicans will allow any “new revenue” (that’s what politicians call taxes when they are increasing them).

But there’s little dispute that the president, having made higher taxes for top earners the central policy pillar of his re-election campaign, will get his way on that subject. Republicans are busily scrambling for ways to have those in the top brackets pay more, whether through caps on deductions, millionaire surtaxes and other complicated devices.

The real battles on taxes are over how much new money Democrats will demand and whether the president is willing to accept something that makes payments go up but doesn’t raise rates.

Less discussed, though, is whether Democrats, having failed in their bid to use the former Republican vice-presidential nominee’s budget plan as a tool to retake the House, are prepared to accept that entitlements will be part of the formula in reaching a deal on deficits and borrowing.

Obama very much needs a deal that will reassure markets and create enough certainty to allow him to move on with the business of implementing his agenda. A failure now would hurt Republican chances in the midterms, but would make Obama a lame duck even before his second term begins.

As he looks to the Democratic Senate, though, the president will find a narrow path for a “balanced approach.”

Several Senate Democrats, including Washington’s Patty Murray, the head of the party’s political arm in the Senate, have taken a hard line on entitlements. And ahead of the first meeting on the deal, the Senate Democratic leadership refused to offer any concessions on the subject, beyond finding “efficiencies.”

There are rank-and-file Democrats in both Houses who believe that seeing an across-the-board income tax increase would be preferable than ceding ground on the subjects of Medicare and Social Security.

While mainstream Democrats seem to be positioning themselves to protect Social Security from any alterations, there are plenty of loud voices that will decry any changes to Medicare.

But in retaining the House, especially with Ryan’s name at the top of the ticket, House Republicans changed the political calculus that had stood immutable for three generations. Democrats made the 2012 House contests a referendum on Ryan’s budget plan and lost.

It was a bad strategy because with the passage of Obama’s 2010 health law, “Medicare as we know it” was kaput anyway. By slashing his own party’s sacred cow in an effort to find funding for an expensive new entitlement, Obama neutralized “Mediscare” as a tactic.

As Republicans negotiate the deal to come up with $1.6 trillion over the next decade, they can thank Pelosi and her team for the fact that Medicare will most certainly be a part of it.

Chris Stirewalt is digital politics editor for Fox News, and his POWER PLAY column appears Monday-Friday on FoxNews.com. Catch Chris Live online daily at 11:30amET  at  http:live.foxnews.com.