The budget battle could be a defining moment for Barack Obama

To revise and extend the epithet so often hurled at Barack Obama from the fantasy corners of the paranoid right, the Republicans have now proven the truth of a central Marxist insight. In the midterms, they cultivated their own variant of false consciousness, inducing voters to "imagine false or apparent motives" – which is how the concept was explicitly articulated not by Marx himself, but by his co-author Friedrich Engels.

Thus GOP candidates postured as tribunes of main street railing against the very bailout so many Republicans in Congress had voted for. But all along, their campaigns were powered by Wall Street money. In office, it's payback time – for the party’s patrons, not their voters – as House Speaker John Boehner’s brigade seeks wholesale repeal of the tougher regulations enacted in last year’s financial reform bill. Supposedly elected to serve main street, the Republicans have become servitors of Wall Street, enablers if they have their way of the reckless speculation that could again devastate middle America and decimate millions of jobs.

So it is across the board.

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After pledging to focus on jobs, jobs, jobs, they haven't offered a single bill that would create a single job. In pursuit of an ideology that disdains government endeavor unless it comforts the comfortable or interests vested interest, the Republicans are pushing a fiscal policy that cuts far and fast – and which, in a real world test case in Britain, has already reversed a recovery and triggered negative growth.

And this too comes with a series of legislative riders on the GOP budget bill, spurring the favored hobbyhorses of GOP reaction and retreat on social issues. While writing a budget for economic stagnation and higher unemployment – which for Republicans offers the additional advantage of perhaps profiting themselves politically in 2012 – they've also turned like a laser beam to vaporizing Planned Parenthood, a woman’s right to choose, and equal rights for gays. Their defining economic appeal last fall was primarily a pretext for their actual purposes.

They told seniors, falsely, that health reform would jeopardize Medicare. Now they're proposing a 10-year plan that would "save" the program by destroying it. They warned, falsely, of the specter of death panels. Now their attack on Medicaid would deny health care to millions of Americans; Medicaid cutbacks in Arizona have already deprived desperate patients of lifesaving treatments. Republicans want to nationalize this; their so-called block grants, which would starve the program, are the real death panels. All this is a first classic case of 21st century false consciousness, with voters conned by a Tea Party that largely consists of the most conservative Republicans, those with higher incomes and lower motives, who have been masquerading as populists. Despite appearances, the Tea Party is no motley crew, no mere grassroots movement, but a manipulated artifact brought to a boil by the abundant fuel of funding from extremists like the billionaire Koch brothers, determined to roll back the New Deal, the New Frontier, and the Great Society.

The GOP tricked people into voting against themselves. Now it's time for the showdown – in the form of a government shutdown and a proposed four trillion dollar shredding of the social safety net, backed up by the blackmail of refusing to raise the federal debt limit.

President Obama now has to call out the false consciousness that led us here; indeed, his is the only voice that can break through the polluted fog of illiterate economics, disguised unfairness, and blatant intolerance. But he can't do it by dealing with each challenge piecemeal or by continually "compromising," in the name of bipartisanship with Republicans who, in JFK’s phrase, insist that "what's mine is mine and what's yours is negotiable."

The president needs a narrative that pulls the issues together in clear and vivid ways that transcend Beltway arcana like budgetary benchmarks – and that resonate with what Americans experience and care about in their daily lives. It's a moment – a defining moment – that requires less Harvard Law Review and more plain speaking.

For example, Obama can redefine the grounds of decision, and the landscape of domestic politics, by asking Americans a few simple questions, over and over again:

• Do you really want to replace Medicare with vouchers for private insurance?

• Do you really want to lose guaranteed coverage – and pay more and more for less and less?

• Do you really want to exchange Medicare for a market that puts profits ahead of people?

• Do you really want to slash Medicaid so the sick are left without help in order to lavish tax cuts on the wealthy?

• Do you really want to let Republicans get their budget-cutting hands on your Social Security – because that’s the next target?

The President could even dare, finally, to defend health reform:

• Do you really want to let insurance companies cancel the coverage you paid for across the years once a loved one gets cancer or some other serious illness – and the bills mount up?

I know this may sound unlikely for the Obama who seems unbendingly determined to find common ground. But it’s inevitable if his leadership and legacy are to be recorded as change we can believe in instead of making history by becoming the fall guy for an era of retreat.

The president might even relish the fight – once he’s in it. Franklin Roosevelt did after he first spent two years trying to placate and work with Republicans who spurned him. In 1936, he famously replied: "Never have these forces of greed and privilege been so united in their hatred for one candidate. And I welcome that hate." That year, Roosevelt carried all but two states. Obama doesn’t have to go that far – and he won't. And in 2012, you can bet he'll carry many more than two states. But he can do much more than simply win re-election. If he speaks the plain truth into the face of false consciousness, he can win the contest for America’s future.

We've heard a lot about a shutdown of government. Now we have to hear more from an Obama who opens up. In the wake of his announcement that he's running for re-election, he needs to lead, as he promised an eon ago in Iowa, by "conviction, not calculation." At this turning point, that’s not only right in principle, but the right politics.

Not since FDR have the forces of greed and privilege been so united in their hatred for a president. Try as he might, Obama may not be able to reason with Republicans who are in fear or in favor of those forces; he will have to defy and defeat them. If he doesn't dare this, he may still retain the presidency for a second term, but suffer the loss of his party’s soul. He would become, after all that he promised, just another practitioner of false consciousness.

This is not the Barack Obama America came to believe in – and I don’t believe he came all this way for that.