Obama's tax cut extension part of strategy to show bipartisanship

By Scott Wilson
Washington Post Staff Writer
Tuesday, December 7, 2010; 12:58 AM

Although his liberal supporters are furious about the decision, President Obama's willingness to extend all of the George W. Bush-era tax cuts is part of what White House officials say is a deliberate strategy: to demonstrate his ability to compromise with Republicans and portray the president as the last reasonable man in a sharply partisan Washington.

The move is based on a political calculation, drawn from his party's midterm defeat, that places a premium on winning back independent voters.

The strategy emerged from hours of post-election meetings among senior administration officials who, after poring over returns, exit polls and midterm history, have determined that the loss of independent voters who supported Democrats in 2008 cost the party dozens of races this year. That conclusion places Obama at odds with many liberal Democrats, who say the midterm losses were the result in part of a political base dispirited by the president's penchant for compromise.

Faced with unified GOP opposition, Obama didn't get what he really wanted: the end of Bush tax cuts on household income of more than $250,000 and continuation of the rest.

Instead, he went along with emboldened Republicans to extend even the top-tier cuts for two years in exchange for unemployment insurance and other measures intended to boost the economy.

In doing so, Obama is trying to make the best of a bad situation. Administration officials now say that restoring the president's image as a post-partisan leader is more important for the next two years of his term and for his reelection effort.

That is likely to require even more compromise with Republicans in the coming months, forgoing a class-tinged debate that much of his party's base is itching to have.

"As much as the political wisdom may dictate fighting over solving problems, it would be the wrong thing to do," Obama said in announcing the tax deal Monday evening.

The president's conciliatory tack marks another shift from campaigning to governing, a transition that has proved difficult for him in the past. Behind the decision is a political fact: Unlike in the midterm elections, Obama's name will appear on the next ballot.

His advisers say the tax compromise will help protect a tentative economic recovery essential to his reelection prospects and appeal to independent voters looking for solutions rather than partisan fights. In a Pew Research Center poll taken after the elections, 59 percent of independents said Obama should work with Republican leaders, while 29 percent said he should stand up to them.

The challenge, White House officials acknowledge, will be keeping the party's base motivated through a difficult reelection campaign even as Obama works with a divided Republican Party that many think is weaker than the recent election returns suggest.

"You have to reinvent yourself to some effect, and become intensely political in the day-to-day trench warfare that will be Washington politics over the next two years," said Sean Wilentz, a Princeton University historian. "But you must combine that with an appeal that recaptures some of the excitement of the 2008 campaign. The thing is, you have to do that now not [as someone] running against Hillary Clinton or for history as the first black president, but for the good of the country."

Within days of the midterm vote, Obama acknowledged the need for a "midcourse correction." He has conceded that he sometimes governs in a way that runs counter to his pledge to change the partisan tone in Washington, whether in passing the stimulus bill without a single Republican vote in the House or pushing through health-care legislation amid a partisan uproar.

When Obama departed for Asia soon after the Nov. 2 elections, a group of senior advisers stayed behind to study presidential rebounds following midterm setbacks and draw conclusions.

Among the most important findings was the fact that, despite the precipitous Democratic losses, Obama's approval rating remains at 47 percent, a still-strong number in a country divided almost evenly along partisan lines. One White House official said, "He is still the most popular political figure in the United States," at least at the national level.

Both Ronald Reagan and Bill Clinton had lower approval ratings after their midterm defeats. Obama's advisers believe his has held steady because, in the words of one, "much of the country still believes he is reasonable."

White House officials say Obama's relatively steady approval numbers, and the lack of a clear Republican leader, mean there is less urgency for him to change than there was for some of his predecessors.

Some of them point to Clinton, who in facing then-House Speaker Newt Gingrich (R-Ga.), cast around for a year before declaring in his 1996 State of the Union address that "the era of big government is over." John C. Fortier, a research fellow at the American Enterprise Institute, noted that Gingrich was named Time magazine's Man of the Year in 1995.

"There is no sense that John Boehner is a historic figure, so I just don't think there's that same sense of desperation right now about Obama," Fortier said, referring to the next House speaker. "People are talking about things right now that may or may not be relevant if the economy does change."

Pursuing economic recovery is at the heart of Obama's tax-cut strategy and will influence his approach going forward. White House advisers note that Reagan coasted to a landslide reelection victory with an unemployment rate of 7.5 percent.

"Twenty three months is an eternity in politics," said a senior administration official, who spoke on the condition of anonymity to discuss internal White House thinking. "Just look where we were 23 months ago, and 23 months before that when we were a candidacy no one thought would win the nomination. So the answer to how we will change is probably: slowly but surely."

Obama's cautious approach to recovery has already meant avoiding fights that some within the Democratic base - and in the party's leadership - are eager to have.

Sen. Charles E. Schumer (N.Y), the Senate's third-ranking Democrat, proposed a compromise that would eliminate the Bush tax cuts on household income above $1 million, rather than the $250,000 threshold now in place.

But White House officials saw the proposal as useful only in setting up a partisan clash rather than in saving money, which was Obama's rationale for opposing the top-tier extension in the first place.

Referring to the extensions for the wealthy during an appearance Monday at a community collegein Winston-Salem, N.C., Obama said, "I have argued that we can't afford it right now."

"But what I've also said is we've got to find consensus here," he continued. "Because a middle-class tax hike would be very tough not only on working families, it would also be a drag on our economy at this moment."

The politics of the compromise, however, have confounded Obama's core constituency.

Adam Green, co-founder of the liberal Progressive Change Campaign Committee, said that "ending the Bush tax cuts for the wealthy is not an issue that pits the party's base against independent voters," citing poll numbers showing that both groups oppose their continuation.

"We've seen so much political malpractice and negotiating incompetence from this White House," Green said. "They consistently cede ground they do not need to cede, and give up on fights they wouldn't lose."

But Obama's bipartisan emphasis, which many of his supporters believe made him look politically weak in his first two years, could end if he does not think the opposition is working in good faith. The senior administration official said the president is taking a "trust but verify" approach.

"If the Republicans abdicate that responsibility to govern for political purposes, they will pay a price," the official said. "And we will make sure they pay a price."

Polling director Jon Cohen contributed to this report.

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