Tax deal displays Obama’s backbone

December 9th, 2010

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This piece was originally published in Politico.

Bill Clinton had his “Sister Souljah moment,” when he admonished an African-American rap singer, in front of an audience that included the Rev. Jesse Jackson, over lyrics that seemed to countenance race-based killing. President Richard M. Nixon, in the middle of the Cold War, secretly plotted a badly needed rapprochement with communist China. And President Harry S. Truman faced down the steel industry and striking workers.
In each case, their actions were met with howls of protest, editorial derision — and sharp accusations of betrayal from their base voters. And in each case, the politician emerged in a strengthened position.

Did President Barack Obama “punt on third down” as Rep. Anthony Weiner (D-N.Y.) lamented? Or did the president have a clarifying moment when he announced a tax cut compromise that caught many Democrats off guard and infuriated progressive organizations?

On the substance, the Obama tax plan leveraged (as supporters say) or surrendered (as detractors lament) the Bush tax cuts for upper-income earners to win a series of victories for Democrats. The spoils include renewal of more than $3 trillion in middle-class tax rate cuts, a 13-month extension of unemployment benefits, an increase in the earned income tax credit, an extension of the college tuition tax cut and the mother lode — a 30 percent employee payroll tax holiday for one year and a big package of incentives like accelerated depreciation — to restore confidence and get consumers and companies buying and investing.

It was a deal, to paraphrase Bruce Springsteen, which everyone could love and hate in a single sound. But it’s the criticism from Obama’s base that stings the most. Democrats of nearly every stripe argued that the president should have stood up and fought harder for a better deal. He had campaigned against the Bush tax cuts, they argued, and he owed it to his base — and all Americans — to stick to that promise for as long as possible. Coupled with some other high-profile skirmishes in which the president demonstrated ideological and governing flexibility — particularly when he scotched the public option from health care reform — some of the left’s loudest voices have begun to question Obama’s backbone.

Simply put: They don’t get it. It takes much more courage and backbone to anger your friends — over a principled disagreement — than your adversaries.

Let’s face it, would another scathing diatribe from former House Speaker Newt Gingrich about Obama’s anti-colonial Kenyan mind-set cause Obama to lose any sleep?

The decision by Obama to take the political establishment by surprise, cut an early deal and avoid the political theatrics that seemed certain to envelop the Capitol throughout the holiday season and the winter was a bold, aggressive move. It may well set that elusive post-partisanship tone that Obama promised during his campaign.

This move could begin to reframe and refocus his presidency — from one of expanding the social safety net to increasing economic growth (a term he used 13 times in his official release). It could even pave the way for a series of accomplishments on the New START, South Korea free trade, education, Social Security solvency, deficit reduction and “don’t ask, don’t tell.”

Whether it turns out to be a one-time moment of bipartisanship or presages a larger set of political possibilities, the president’s tax deal embodies the twin imperatives he will face over the next two years.

The first is political: how to win back the moderates who made clear in the midterms that they’ve grown disgusted with the hyperpartisanship and ideological rigidity of both parties.

The second is economic: how to address not just the recession but also the coming economic growth crisis — in which the Congressional Budget Office predicts a 2.1 percent annual growth rate for the next 20 years. Quite effectively, this deal begins to do both.

There is, indeed, a lot to like and dislike about the substance of this bipartisan tax cut plan. Alas, that is the nature of compromise in an era — likely to last a generation or longer — of divided government and a polarized electorate.

That means the lasting political impact of this decision is still to be determined. Gutsy stands, such as President George H.W. Bush’s “read my lips” pledge, can backfire badly. But the courage it took to strike such a deal is not in doubt.

Jim Kessler, vice president of policy at Third Way, served as policy director for Sen. Chuck Schumer (D-N.Y.). Jon Cowan, president of Third Way, served as chief of staff of the Department of Housing and Urban Development under Secretary Andrew Cuomo.