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Tax deal with Republicans signals shift in course for Obama

A deal between the White House and Republicans on taxes represents a major policy compromise and will disappoint much of the president's left-wing base. But it is likely just a hint of things to come in the second half of Obama’s term.


During US President Barack Obama’s first two years in the White House, Democrats were able to win a handful of fierce battles with Republicans and emerge with some significant legislative achievements.

That was before the midterm elections.

Now, with a reduced number of Democrats in Congress, Obama has accepted a tentative deal with Republicans that represents a major compromise on what was an important campaign promise: ending Bush-era tax cuts for the richest Americans.

According to the agreement, Democrats would extend the tax cuts for the wealthiest two percent of the population in exchange for an extension of unemployment benefits and tax breaks for parents, students, and the middle class.

Though it is an example of the kind of bipartisanship Obama has always hailed, the deal is considered a betrayal of his left-wing base; an editorial published in The New York Times Tuesday called it “a disappointing retreat by the White House” and concluded that Obama “should have fought harder”.

But for better or for worse, the compromise is also a hint of what is likely to come in the second half of Obama’s term.

Pragmatism over principle

When announcing the deal, Obama presented it as a practical move intended to protect struggling Americans. Indeed, if Democrats had chosen to refuse the extended tax cuts for the rich, a prolonged Congressional battle might have ensued; that would have resulted in the expiration of tax breaks for lower and middle-income earners, as well as an end to unemployment benefits for millions of people.

“I’m not willing to let working families across this country become collateral damage for political warfare here in Washington,” Obama said.

Obama’s compromise will likely please moderates of both parties; after several ambitious, often controversial left-wing reforms were accomplished while Democrats held healthy majorities in both Congressional chambers (the stimulus package, healthcare, and the financial regulatory reform), all signs suggest Obama is preparing to govern from the centre for the remainder of his term. This shift has earned praise from some of Obama’s harshest critics: House Republican leader John Boehner said Obama’s decision was “encouraging”, while Senate Republican leader Mitch McConnell said he was pleased with the administration’s “openness” in forging the deal.

The left feels the sting

But Obama’s liberal base – the people who propelled him into the White House to begin with – has been left reeling from the compromise. The most progressive wing of the party already felt that Obama gave too much ground to Republicans on major reforms – forgoing the “public option” in the healthcare battle, for example. His latest maneuver will only bolster some of his supporters’ fears that the president is not willing to get his hands dirty defending cherished Democratic principles.

Left-wing blogger Rich Boatti told that Obama supporters had reason to be disappointed. “Sometimes compromise can be a good thing, but in this situation he’s giving up way too much for what he’s getting,” Boatti said.

Some leading Democrats have warned that the deal could cause considerable backlash among Democratic lawmakers. The hint of inter-party conflict has raised a question that has, until now, seemed mostly extraneous: is Obama, by distancing himself from his base, setting himself up for a challenge from within his own party ahead of the 2012 presidential election?

If nothing else, Obama’s deal with Republicans is the latest confirmation of his pragmatic approach to the presidency and his willingness to scrap idealism in order to get things done – even if those things are sometimes far more modest than anticipated.

“The American people didn’t send us here to wage symbolic battles or win symbolic victories,” Obama said when announcing the tax deal. Time will soon tell if he is right.

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