Go to the Globe and Mail homepage

Jump to main navigationJump to main content

US President Barack Obama (Photographer:/Saul Loeb/Getty Images)
US President Barack Obama (Photographer:/Saul Loeb/Getty Images)

On the tax deal, Obama got the best of the GOP Add to ...

One side did most of the compromising. But it increasingly seems as if it is the other side that has been most compromised by the tax deal worked out between the White House and Republicans in Congress.

President Barack Obama provoked an open revolt among Democrats by reneging on his campaign promise to raise taxes on the wealthy. His decision to accept an extension of current tax rates for the rich and middle class alike even increased the odds of a primary challenge to him in 2012.

More related to this story

Yet, it's not the Democrats who risk being thrust into an all-out civil war over the $858-billion (U.S.) deal Mr. Obama negotiated to extend Bush-era tax cuts for the wealthy, in exchange for a smorgasbord of stimulus measures that will help boost the economy in advance of the next election.

Liberal Democrats are resigned to the package, even if they used their remaining leverage on Thursday to delay a final vote on it in the House of Representatives. The deal sailed through the Senate a day earlier. The rebellion in Democratic ranks has been intense, but it is largely symbolic.

Instead, the deal's lasting impact is more likely to be felt among Republicans. Those who support the deficit-widening compromise are being tarred as hypocrites by Tea Party groups. And the top two contenders for the 2012 nomination have broken with party leaders in Congress over the deal.

"The compromise is not only what the public wants, but it's a huge gain for Obama," Vanderbilt University political science professor John Geer said in an interview. "The tax issue becomes a non-starter for Republicans to use against him in the 2012 campaign."

That has forced prospective GOP nominees to stake their ground early, with Mitt Romney and Sarah Palin coming out strongly against the compromise package. Mike Huckabee, Tim Pawlenty and Newt Gingrich have offered qualified endorsements, though The Huffington Post reported that Mr. Gingrich has been "privately expressing growing concern" that the deal could backfire on the GOP.

Two polls released on Thursday show support for the compromise among a broad swath of the electorate. A similar proportion - about 60 per cent - of Republican, Democratic and independent voters endorse the package, according to a Pew Research Center survey. Only a fifth of all voters disapproved of the deal. A Wall Street Journal/NBC News poll found a similar level of support, but a higher disapproval rate - 36 per cent.

The compromise unveiled by Mr. Obama last week would prevent income-tax rates from going up on all Americans on Jan. 1. Previously, the President had vowed to permanently extend middle-class tax cuts first passed in 2001, but to increase rates on households earning more than $250,000. Instead, he agreed to extend current rates for all for two years and support a lower tax on private estates than Democrats wanted.

In exchange, however, he got Republicans to agree to a substantial reduction in Social Security taxes for all workers in 2011, the continuation of up to 99 weeks of unemployment benefits for the jobless for another year and a slew of tax breaks principally aimed at the middle class.

The deal exposed fault lines in the GOP. While Republicans have an ideological proclivity toward tax cuts, they also spent the past two years vowing to impose fiscal responsibility on Congress. But their first action since the midterm election that resulted in near-record GOP gains involves a deal that massively expands the deficit over the next two years.

"Given the unambiguous message the American people sent to Washington in November, it is difficult to understand how political leaders could have reached such a disappointing agreement," Mr. Romney, the former Massachusetts governor and GOP runner-up in 2008, wrote in a USA Today op-ed article this week.

The tax deal gives Mr. Romney, considered a moderate Republican, an opportunity to show off his conservative bona fides to the GOP voters most skeptical of them - Tea Partiers and their ilk.

Ms. Palin, the former Alaska governor and 2008 GOP vice-presidential nominee, does not need to prove her conservative stripes. Still, she took to Twitter to blast the tax deal: "Fiscal conservatives, we expect you to fight for us & America's solvency."

South Dakota GOP Senator John Thune, who is also mulling a run at the nomination, shot back, saying it was "perhaps politically expedient to stand on the sidelines and criticize this proposal." But the Republicans now in Congress, he said, had to move to stop taxes from going up on Jan. 1.

If Mr. Obama was the first to take flak for this deal, Republicans will be dealing with their own shrapnel long after Democrats have kissed and made up.

Follow on Twitter: @konradyakabuski

 

In the know

Most popular videos »

Highlights

More from The Globe and Mail

Most popular