Obama gets tough, with liberals

Posted: Monday, December 13, 2010

For months, anxious Democrats have been asking why President Barack Obama couldn't be more like Bill Clinton, their last successful president. Now Obama has gone and done something Clintonian by striking a compromise with Republicans to extend high-income tax cuts, and his own party's liberals are furiously accusing him of betraying their ideals.

That should come as no great surprise. Liberals often accused Clinton of the same sin - a bit of history many Democrats appear to have forgotten.

Clinton declared the era of big government over, cut spending on domestic programs, called for a balanced budget and compromised with Newt Gingrich on a welfare reform program that put a deadline on benefits for the poor.

"Ideological purity is for partisan extremists," he lectured his own party in 1995, sounding very much like Obama this week.

The result, back then, was an economic recovery and a handsome re-election - precisely the outcome Obama has in mind.

It's strange that liberals don't cut him more slack. He's got more solid liberal credentials than Clinton did. And he certainly got more done in his first two years than Clinton did. Obama's bill for near-universal health care passed; Clinton's never even got a vote.

But no. Liberals complain that the stimulus was too small, the health care bill - which survived, remember, by the slimmest of margins - too riddled with compromises. They wanted him to 'fight harder' against extending tax cuts for the upper crust.

Instead, Obama cut a deal. He gave the Republicans the continued tax cuts they wanted, even though he had campaigned against them as too expensive. In exchange, he got an extension of his own tax breaks for lower- and middle-income workers, plus a 13-month extension of unemployment benefits.

It was a Clintonian exercise in practical politics: He abandoned one of his most fervently argued positions, but the result was that he probably improved his own political standing in both the short term and the long term.

In the short term, Obama had few good alternatives. If Congress remained deadlocked and allowed taxes to spike in January (as some liberals were willing to risk), the public would look for someone to blame, and there was no reason to expect that fractious Democrats could win a 'messaging' war on that issue after losing similar battles all year.

More important, Obama's economic advisers warned him that a chaotic tax deadlock could cost the economy as many as a million jobs if businesses put hiring on hold until Congress resolved the issue. The last thing Obama needs right now is a slower economic recovery.

And that's where the president's decision connects with his long-term agenda. If this deal survives, he's just won something that seemed well out of reach: a new economic stimulus package.

Obama's reelection depends on one factor above all: the unemployment rate in early 2012. If the economy is appreciably stronger by the spring of that election year, he's in good shape, just as Clinton was in 1996. If unemployment remains stuck at 9 percent, he's not.

The prescription of most economists, including Obama's advisors and Federal Reserve Chairman Ben S. Bernanke, has been for more stimulus spending. But there was no way to get Congress to approve another stimulus package anything like the one passed in 2009, thanks to the Republicans' success at painting it as a failure.

Obama would have preferred a package that was less reliant on tax cuts, but that's the one form of stimulus the GOP will get behind. So the president struck a bargain: Both sides got the tax cuts they wanted, and Obama also secured a renewal of unemployment insurance, which he wasn't likely to get otherwise. The total cost of the package is roughly $900 billion over two years, and perhaps $300 billion of that is stimulus that wouldn't have happened otherwise. The liberal Center for American Progress estimates (optimistically) that the effect of the entire package could be to save or create 2.2 million jobs.

What's strange is that it's mostly liberals who are hopping mad, not the 'tea party' conservatives who marched to the polls last month to stop this kind of deficit spending. Sen. Jim DeMint, R-S.C., chieftain of the Senate's tea party wing, says he'll fight the deal. But so far, most Republicans in Congress appear to be falling in line; they still love tax cuts more than they loathe deficits.

It's no wonder Obama sounded more irritated at his own party at his news conference Tuesday than he did at the Republicans. Yes, he accused the GOP of taking the American people hostage, but that's something he's been saying for a long time. His real frustration was with Democratic liberals who don't want to compromise, even though November's election returns suggest that the tide is running against them.

Obama and his aides acknowledge that the deal they struck is far from their ideal. But they say they are doing what the country needs most - giving the economy a better chance to recover. 'When you're at war, you fire the bullets that you have,' his chief economic adviser, Austan Goolsbee, said.

They're also doing what independent voters - the ones who gave Obama his big majority in 2008 - say they want: show some willingness to compromise. For a president seeking reelection, there are worse things than being criticized by 'the professional left,' as one of his aides has called it.

Liberal Democrats have been pleading with Obama to show more passion, even flash a little anger now and then. This week, he finally did, but it was the liberals he unleashed it on.

If his Democratic critics have their way, he said, "We will never get anything done. People will have the satisfaction of having a purist position and no victories for the American people. And we will be able to feel good about ourselves and sanctimonious about how pure our intentions are and how tough we are - and in the meantime, the American people are still seeing themselves not able to get health insurance because of preexisting conditions or not being able to pay their bills because their unemployment insurance ran out."

For a moment there, he sounded just like Bill Clinton.

• Doyle McManus is a columnist for The Los Angeles Times. Readers may contact him at doyle.mcmanus@latimes.com.



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