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Obama's tax-cut strategy may falter on other fronts

As the partisan divide in Congress widens, chances of bridging it look slimmer.

December 17, 2010|By Paul West and Christi Parsons, Washington Bureau
  • President Obama confers with House Majority Leader Steny Hoyer (D-Md.), right, and Minority Leader John Boehner (R-Ohio). Might Obamas compromise with the GOP on tax cuts be a turning point in his strategy? His cautious reply: Maybe.
President Obama confers with House Majority Leader Steny Hoyer (D-Md.),… (Charles Dharapak, Associated…)

Reporting from Washington — President Obama's year-end deal-cutting with Republicans, which produced an important compromise on extending George W. Bush-era tax cuts, has come to represent what White House officials see as a successful template for the president's role on other issues heading into a contentious 2011.

By emerging as a mediator, Obama showed a way of doing business that many voters were expecting but didn't see during most of his first two years. As a result, White House aides now feel they have "a little wind at our back," a senior White House official said. That could help point the way on other issues, such as trade, education and energy.

But as the tax deal was wrapping up, there were few indications that Washington's partisan divide has eased. If anything, the gulf is likely to widen as a new, more conservative Congress is sworn in. Chances for repeating the bipartisan compromise that led to the tax deal stand to be sparse, many analysts think. Governing is likely to become even messier.

That might be why, when a recent White House visitor asked whether the tax deal represented a turning point for him, the president replied cautiously. "Maybe," he said.

Obama tried to run as an outsider in 2008. But once he was in office, his image as a different kind of politician "took some hits," according to the senior administration official, who requested anonymity to provide a more candid assessment of the president's standing.

Obama pushed a healthcare overhaul, stimulus package and other initiatives through Congress almost exclusively with Democratic votes.

"To people who thought he was going to break down some of the ideological wars, they didn't see that," the official said. "They saw him passing healthcare on a Democratic party-line vote."

In the White House view, the president is finally convincing voters that he's focused on the economy and ready to reach across party lines. That, they say, could help him rebuild his image in the new year and beyond, including for a 2012 reelection try.

Republicans are expected to stick closely to what's worked for them up to now: obstructing Obama's initiatives. As soon as the president signs the $858-billion tax-cut package, Republicans will "start slapping him upside the head" over federal deficits, predicted Rep. Ron Kind (D-Wis.), who survived the purge of moderates in last month's election.

Brookings Institution scholar Thomas Mann said Republicans would be "looking to keep the president's record as meager as possible" as a way of convincing their conservative supporters they're sticking to principles.

The recent bargain over tax cuts and jobless aid, Mann said, was a unique circumstance and is unlikely to be repeated.

Obama's aides believe he's better positioned for coming fights than he has been since the earliest days of his presidency, in large part because of the tax-cut deal.

"It's very consistent with the Barack Obama they sent to office in 2008," said Dan Pfeiffer, Obama's communications director. "Someone willing to work with both parties … to do what's best for the country, who has a core set of values but is not an ideologue by nature."

Obama plans to use the Republicans' rise to power to his advantage, forcing them to choose between new compromises or a backlash from voters.

"Now Republicans have some skin in the game," said the senior official. "That gives us an opportunity to work with them and, at least, be the people who are initiating the efforts at getting beyond partisan warfare."

Obama showed a willingness to give up something during the recent negotiations with Republicans: his opposition to more tax breaks for the wealthiest Americans.

"The public sees him as more willing to compromise than the Republicans," Mann said. "This is the time for him to draw a line and take them on."

It isn't clear exactly when the first clash will come or what shape it will take. Many are expecting the familiar Washington game of chicken, prompted by a potential government shutdown or related fiscal crunch.

One potential tripwire: raising the $14.3-trillion debt ceiling early next year, which is required for the U.S. Treasury to continue selling securities. "Tea party" conservatives vow to vote no unless new spending cuts are included.

White House aides and members of Congress see future possibilities for cooperation — on trade, alternative energy, overhauling the No Child Left Behind education law and job-creating tax credits.

Obama will probably be forced to rely on Republican support to keep his Afghanistan policy intact, particularly if liberal opposition grows as it becomes clearer that the large U.S. troop presence will stretch into 2014.

But Republican attacks on domestic spending are likely to keep the president and congressional Democrats on the defensive.

Both sides are already gearing up for battles over GOP efforts to "defund" agencies that oversee the healthcare overhaul and to slash spending for education and state nutrition and health programs for children and the poor, among others. The Republican-controlled House can be expected to approve a series of politically themed measures — including repeal of the new healthcare overhaul — that will die in the Senate, where Democrats are still a majority.

With control of Congress about to be split between parties, Obama will need to forge shifting, issue-specific coalitions to get things done, said Sen. Benjamin L. Cardin of Maryland, a liberal Democrat whose seat is up in 2012.

"In some cases, he'll be with Democrats; in some cases, he'll be with Republicans. But he has to lead," he said.

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