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12.07.10

Obama Gets Rolled

The deal announced last night to extend the Bush tax cuts may help the economy. But it also shows the president to be a pushover, with no taste for high-stakes negotiation.

The Conciliator-in-Chief announced a “framework for a bipartisan agreement” on taxes at a hastily assembled White House press conference on Monday night. There were no party leaders to flank him and no signs of celebration. Even the president sounded downbeat. “I have no doubt that everyone will find something in this compromise that they don’t like,” he said. “In fact, there are things in here that I don’t like.”

The tentative agreement would extend all the Bush tax cuts for two years, while extending unemployment benefits for the next 13 months. In addition, the payroll tax would be slashed as a new stimulus, while new equipment purchases and college-tuition tax credits would be kept in place. In an unexpected concession, the so-called death tax would be set at 35 percent with a $5 million exemption. “In one fell swoop, you have a Democratic president and a Democratic Congress ratifying the signature domestic policy accomplishment of the Bush administration,” Taegan Goddard of PoliticalWire.com told The Daily Beast.

The far left greeted the news with the kind of despair usually reserved for Bush-Cheney inaugurations. Vermont Sen. Bernie Sanders immediately denounced the plan as “an absolute disaster, an insult to the vast majority of the American people.” Commenters at Daily Kos were calling the president “Captain Caveman” while FireDogLake.com offered the headline “President Bush Obama, GOP Agree: Bail Out the Rich, Destroy Democratic Party.”

By point of conservative comparison, over at RedState.com, the headline read “Obama Retreats on Tax Hike. We Won.”

There is one point of growing agreement between the left and right: This president is a lousy poker player, with no love for the tough-minded gamesmanship of high-stakes negotiations. He believes in reasoning together, even with unreasonable people. This honorable approach leaves him liable to get rolled.

Randall Lane: Obama’s Lousy Bluffing Skills“If you’re going to fold, fold fast,” said a source familiar with internal White House economic strategy. “There could have been a better version of this deal in the fall." In fact, the core of the White House’s framework closely resembles the proposal floated by former Obama OMB Director Peter Orszag in his controversial first column for The New York Times, which was dismissed as naïve and disloyal by his former colleagues at the time.

“If you’re going to fold, fold fast,” said a source familiar with internal White House economic strategy. “There could have been a better version of this deal in the fall."

Likewise, the political judo move of making the new top rate $1 million, proposed by Senator Chuck Schumer, seems like it could have given Democrats a win if it had been proposed earlier and received White House backing. It would have forced Republicans to defend tax cuts for people making more than $1 million a year, while drawing a distinction between the working wealthy and the super-rich. Now it seems that fight will be delayed until at least 2012, when the tax-cut debate will be reignited alongside accusations of class warfare—just in time for the presidential campaign.

This compromise shows how President Obama has internalized the 2010 elections: It’s about growing the economy and winning back the center by trying to work constructively with Republicans. Concerns about the deficit and debt have apparently been forgotten by both parties as they doled out roughly $1 trillion in unpaid-for tax cuts. The understandable frustration for Democrats comes from the base feeling ignored while Republicans strong-arm policy gains they will give the president no credit for in the end.

President Obama is left trying to center himself in the surreal debate that has dominated much of his administration; conservatives think he’s a socialist while liberals think he’s a corporate sell-out. That’s close to a no-win situation, a reflection of a nervous nation, hopped up on hyper-partisan Kool-Aid.

In the end, the president justifies his high-minded compromises with the hope that they will strengthen the economy while inspiring good faith negotiations. He is trying to lead by example. The president says correctly that “We cannot play politics at a time when the American people are looking for us to solve problems." But his opponents are playing remorseless politics, and this leaves Obama at a tactical disadvantage. He is by nature a bridge-builder and the margins keep getting moved as he strains to make a deal. This is partly the legacy of electing a legislator as president instead of someone with executive experience. It is also an argument for bringing advisers with business backgrounds into the White House.

The tax-cut compromise might prove to be good for the economy, but the immediate fallout indicates the tough and thankless road that lies ahead for President Obama. The Conciliator in Chief is going to have to upgrade his poker game going forward, leading like a happy warrior while remembering this old gambler’s saying: “Don’t play to impress, play to win.”

John Avlon's new book Wingnuts: How the Lunatic Fringe Is Hijacking America is available now by Beast Books both on the Web and in paperback. He is also the author of Independent Nation: How Centrists Can Change American Politics and a CNN contributor. Previously, he served as chief speechwriter for New York City Mayor Rudy Giuliani and was a columnist and associate editor for The New York Sun.