President Obama: A Decent Deal, a Weak Sales Job
Jules Witcover

In wheeling out his tax deal with the Republicans, President Barack Obama has managed to make the best of a bad situation while failing to do much of a sales job on what he got the Republicans to buy.

He's succeeded in making his liberal allies in the House irate over swallowing continued tax cuts for the richest Americans without getting much credit for the add-ons to the deal that could stimulate the stagnant economy.

He allowed the initial focus on the deal to be his yielding to the Republican blackmail of holding middle-class tax cuts hostage to the rich tax cuts, a fight on which he had public support and simple justice on his side. His defense that he wasn't willing to have middle-class taxes go up in a dire economy didn't mask the fact of his surrender.

Belatedly, Obama trotted out his new chief economic adviser, Austan Goolsbee, to make a strong argument that other elements in the deal were actually another federal stimulus without the label. They included extending federal benefits to millions of jobless Americans, a 2 percent cut in payroll taxes, and college and child-care tax benefits.

This latter rationalization only began to sink in to balking Democrats as the message was being pushed almost stealthily by the administration, so spooked had it become by the Republican denunciation of Obama's 2009 stimulus package as an utter failure.

Despite disappointment that the American Reinvestment and Recovery Act financing infrastructure and other construction projects across the country did not yield a dramatic economic upswing and drop in the unemployment rate, the stimulus was hardly inconsequential, either.

But the White House, even with Vice President Joe Biden riding herd on implementation of the Recovery Act with repeated cajoling of mayors, county executives and governors, did a poor job advertising what progress was being made.

Consequently, the Republicans were easily able to bury any consideration of a second openly declared stimulus package, even as many economists and liberal Democrats argued one was desperately needed to get the economy out of the plateau into which it had settled.

Federal Reserve Board Chairman Ben Bernanke moved to come to the rescue with a huge transfusion of new money into the economy. Then Obama seized on the seeming impasse with the congressional Republicans over the Bush tax cuts to piggyback the new simulative features onto his deal with them.

Obama may not have exactly turned a sow's ear into a silk purse with the deal negotiated with the congressional GOP leadership. His very bypassing of the congressional Democrats in striking the deal will leave scars, as will his characterization of some party liberals as "sanctimonious" defenders of "purist" positions.

But if the deal survives the pushback from the unhappy Democrats on Capitol Hill and in time can be shown really to have been a new stimulus to the economy, Obama will have taken a major step toward cementing his leadership in the party and in the country.

Somewhat submerged in all the discussion of his "surrender" is the fact that the Republicans, while continuing to declare themselves as stalwart advocates of deficit reduction, are buying into a huge spending and tax-cut package approaching a trillion dollars by some estimates.

As long as the American economy remains "in the ditch," as campaigner Obama liked to say in the midterm elections, the drive for reducing the federal budget is going to play second fiddle to recovery, for all the clamor stirred up by the deficit hawks.

And with the Republican takeover of the House and increased numerical strength in the Senate in January, the Democratic president faces a steeper hill to climb as he depends on economic recovery to staunch his political leakage.

Ironically, it took a political pasting in the midterms for Obama to take a major, tangible step toward the bipartisanship he mostly talked about in his 2008 campaign and in his first two years as president. Now it could prove to be either his unraveling within his own party or his ticket to reelection in 2012.

Jules Witcover's latest book is Joe Biden: A Life of Trial and Redemption (William Morrow).

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