The President doesn’t always look like he knows what he’s doing, but, despite appearances, he indeed does. When he cut a deal to extend the Bush era tax cuts for everyone in 2010, he was widely derided as having caved in to House Republicans. At the time, it wasn’t a deal that Democrats relished, but they swallowed it, as it was widely seen as having been the course of least resistance. The President set the terms down that the issue would be revisited two years hence, which is today.
In politics, as in life, timing is everything. Democrats seem finally to have found a measure of confidence and are taking a page out of the Republican playbook, taking a ‘my way or the highway’ approach to keeping the Bush era tax increases for everyone but the wealthiest of Americans. The GOP is balking, saying that increasing taxes on anyone, least of all the ultra-rich (whom they somewhat misleadingly title ‘job creators’) is a form of economic suicide and should be prevented at all costs.
The President, however, shows no signs of caving. He set the terms of the extension two years ago so that the issue would come up now, and it’s bubbling up to the fore with fury. According to the terms of the deal, if new revenues aren’t found, automatic spending cuts will take place, totaling over one trillion dollars by years end to blunt the economic effect of high deficits, which will continue to persist and will do so until the country has made a full economic recovery and we’ve had some measure of common-sense tax reform.
The President’s position is that we should go ahead and keep all of the tax cuts for everyone, except for earners in the top income brackets. If he loses the election, he says that the country should go ahead let the superrich keep their lower rates, but that in the meantime, in order to forestall important cuts in defense spending, we ought to do that which everyone agrees on right away, and see how the election turns out. If Republicans continue to demand that the wealthy get their tax cuts as well, they’re doing so at a time when the story line coming from the presidential campaign is that Mitt Romney’s not releasing more than two years of his tax returns, that he earned lots and lots of money from Bain (whether or not he was actually at the helm of the firm is anyone’s guess at this point) and growing questions as to the paper trail that may (or may not) be true regarding Romney’s tenure at Bain.
So, when the President made the gambit to cede a tactical victory to the GOP two years ago, he demoralized Democrats. And by a combination of luck and planning, the President is increasingly able to set the terms of the debate for the coming election in such a way that Romney is going to find it hard, very hard indeed, to not look like the bad guy in this one. And, he’ll likely get his way on the tax measure as well.