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Obama Faces Democratic Doubts on Tax Cut Strategy

Sunday, 21 Nov 2010 04:35 PM

Democratic fury at President Barack Obama over the party's rout in U.S. congressional elections is jeopardizing a consensus on tax-cut extensions and poses a leadership test for Obama.

Just a few weeks before Democrats are forced to surrender control of the House of Representatives and contend with a weakened majority in the Senate, Obama is scrambling to pass measures that would prevent middle-income Americans from facing higher taxes in 2011.

But Obama's colleagues in Congress, fresh from losing 60 seats in the House of Representatives, are bitter about his role in their loss and divided about how to move forward -- a situation that could overshadow his next two years of governing as well as his priorities for the "lame duck" session now.

"Congressional Democrats are pissed. We just lost 60 seats. And we lost 60 seats for a lot of reasons ... One of those reasons was the president," said Democratic strategist Liz Chadderdon.

"Democrats are divided and ... not interested in carrying his water right now."

That bitterness is spilling into the tax debate. Confusion about the president's position and division over how hard to fight Republicans' push to extend tax breaks for the rich are complicating the discussion just as Obama seeks a united front with his allies on Capitol Hill.

Democrats are especially wary about Obama's willingness to compromise with Republicans, who, bolstered by their Nov. 2 election victory, insist that Bush-era tax cuts be extended for everyone, not just families making less than $250,000 a year.

"There's anxiety from the House Democrats about what the White House is going to do," said one Democratic strategist and former Clinton administration official.

"Are they going to make a bad deal with the Republicans that is going to be bad policy ... for the Democrats politically who were out there fighting for a more progressive outcome?"

The administration may have more riding on the success of efforts to extend the cuts than lawmakers. Though some Democrats view taking a strong stand against Republicans as politically savvy, Obama must show he has learned a lesson from the election he described as a "shellacking."

 

Perhaps more importantly, with an eye toward re-election in 2012, the president cannot allow an effective tax hike to hurt prized middle class voters in a sluggish economy, even if that means allowing an extension of tax breaks for the rich.

"The problem is right now everyone is calculating their approach to all of these things in terms of 2012," said Ross Baker, political scientist at New Jersey's Rutgers University, who recommended an "intervention" to allow Democrats to vent their frustration with the White House.

Obama's dilemma is that he wants to score a political win for Democrats by extending the tax cuts in 2010. But Republicans may see little advantage in allowing him to do that since it would mean passing up the chance to enact the legislation in January, when they could claim credit.

The challenge for the White House and congressional Democrats will be ensuring that Republicans get the blame if tax rates go up on Jan. 1.

Obama's critics say a reluctance to take a firm stand on policy issues was one reason for the election losses, and they want to see decisive leadership from him on taxes.

"The president needs to put down a marker," said Representative Earl Blumenauer, a Democrat from Oregon.

"There is more confusion on the Senate side and there is a little ambiguity about what the president is going to do."

Obama has a chance to do that before he meets with Republican leaders at the White House on Nov. 30. Analysts said he needs to offer a clear stance on whether he favors continuing all the cuts or just those for the middle class.

"We're sort of all waiting for the president to tell us where he is," said one senior Democratic aide on Capitol Hill.

The White House wants more information before that happens. Obama challenged Democratic leaders last week to offer ideas on on a strategy for extending the middle class tax cuts. His aides have made clear he would be the first to advocate extending only the middle-income tax breaks -- if there were the votes in Congress to do that.

But that is not the political reality he faces, and the debate will test Obama's frayed relationship with his party and also his attempts to reach out to opposition Republicans.

Rutgers' Baker said Democrats are "dazed by the enormity of the defeat" and need to transition from months of campaigning to governing in a situation where Republicans hold more sway and are showing little inclination to give ground.

"It takes time to adjust from being a combatant to being a prisoner of war," Baker said.

Steny Hoyer, the No. 2 Democrat in the House, on Sunday played down differences with Obama on the tax-cut strategy, emphasizing that all Democrats wanted to avoid increasing the tax burden on "average working Americans."

And while he was noncommittal about whether congressional Democrats would compromise with Republicans on extending tax cuts for the rich, Hoyer said on CBS' "Face the Nation" he would talk to Obama about "how we move the ball forward."

© 2017 Thomson/Reuters. All rights reserved.

 
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Democratic fury at President Barack Obama over the party's rout in U.S. congressional elections is jeopardizing a consensus on tax-cut extensions and poses a leadership test for Obama. Just a few weeks before Democrats are forced to surrender control of the House of...
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2010-35-21
Sunday, 21 Nov 2010 04:35 PM
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