By Sam Youngman - 12/07/10 11:00 AM EST
President Obama could be crippling his own reelection effort by making a deal with Republicans to extend all of the Bush-era tax cuts, Democratic strategists and liberal groups said Monday.
A two-year extension of tax rates ushered in by President George W. Bush nearly a decade ago, would ensure a resumption of today’s fiery debate in 2012, when Obama is expected to reapply for his job, strategists in both parties said.
“President Obama has shown a complete refusal to fight Republicans throughout his presidency even when the public is on his side — and millions of his former supporters are now growing disappointed and infuriated by this refusal to fight,” said Adam Green, co-founder of the Progressive Change Campaign Committee.
The PCCC on Monday afternoon circulated quotes from 2008 Obama campaign staffers who expressed disillusionment with the president for agreeing to extend tax cuts for the wealthy amid signs that the White House and Republicans were edging closer to a deal.
“Obama is demobilizing the troops and demoralizing the public right before he seeks reelection,” Green said.
The compromises by the White House have also disappointed liberals in the House and Senate, who have pushed Obama to take a tougher line with the GOP. Some liberals had said it would be better for Obama to allow all of the tax cuts to expire rather than cave to GOP demands and allow tax cuts for the wealthy to be extended.
Democratic strategists are disappointed that the president appears to be fighting the tax debate on terms dictated by Republicans, who have been able to frame a tax increase on any taxpayers as detrimental to a struggling economy. Friday’s unemployment report, showing a surprising jump in the jobless rate — to 9.8 percent — didn’t make matters easier for the White House.
“This is only a tough fight [now] because Americans have lost faith that President Obama is fighting for their economic futures,” said Jamal Simmons, a Democratic strategist and former official with the Clinton administration.
But Simmons and other Democrats believe a shift in the economy could help the president and Democrats argue for an end to the tax cuts in two years.
“I think most people feel like the economy is still really bad, and the idea of raising taxes on anyone right now does strike the average person as ‘This might not be a good idea,’ ” said Lara Brown, a political science professor at Villanova University. “But when people are making money, tax increases are just not as scary.”
Aware of the second round of fights facing him, Obama said in his late Monday statement that he will spend part of the next two years engaged in a conversation to try to convince people that the country cannot afford another extension of the high-end cuts.
By agreeing to a two-year extension of the cuts, Obama appears to be gambling that he — and the economy — will be in a better position to define the debate in 2012, when it could be more fruitful for Obama to sell a tax hike for the rich as part of an effort to lower the national debt.
“If by 2012 the president can convince voters of his commitment to helping them reclaim the American Dream, they’ll support denying tax cuts for the wealthy that put us $700 billion in more debt to China,” said Simmons.
Privately, both White House and Republican aides say they would love to have a fight over the high-end tax cuts as a central 2012 campaign issue.
“It’s ultimately a question of whether Democrats believe their own rhetoric,” said one Senate GOP aide. “They seem to think that Americans are OK with raising taxes on small businesses. Republicans disagree and would love to debate that notion anytime.
“It’s an area where the GOP can hit the Democrats hard any day,” the GOP aide said.
But one Democratic strategist said that defending tax cuts for the wealthy will put 2012 candidates in a tough position with conservative, blue-collar primary voters.
“As a campaign issue it can play both ways — the GOP is more likely to be seen as the party of big money, big oil, big special interests, et cetera,” the strategist said. “So they would be in the position of again defending bonus tax cuts for millionaires and billionaires — not where you want to be message-wise in early primary states.”