Intensifying his campaign to pass a tax-cut deal he struck with Republicans, President Obama is warning of the grim economic consequences of failure.
But for Obama, losing this closely watched and already hard-fought battle would carry calamitous political consequences, as well.
“This was a very high-profile fight, really the first thing Americans tuned into since the election and very high-stakes poker for the president,” said Karlyn Bowman, a political analyst at the American Enterprise Institute.
By any measure, Obama needs to end the legislative session with bang and not a whimper. He risked his political capital by negotiating a deal with Republicans extending Bush-era tax cuts to all income levels for two years in exchange for a 13-month extension of unemployment benefits. It was a move the White House hoped would set a new tone of bipartisanship that would help Obama in the short term by securing Senate ratification of the START arms treaty with Russia and in the longer term when Republicans in January take over the House and increase their number in the Senate.
But, so far, Obama has been unable to unify his party behind the tax cut deal. And Republicans are still balking on the START treaty.
“Appearance matters in politics,” said Dennis Goldford, a political scientist at Drake University in Iowa. “Liberal Democrats are having a fit because, in their view, he can’t manage the Republicans and that makes him look weak — but now it also looks as though he can’t even manage the Democrats.”
Apart from the tax cut fight, Obama is operating from another disadvantage. His 43 percent job approval rating, combined with perceptions within his own party that he gave in too easily to Republicans on tax cuts for the rich, has him looking somewhat diminished.
Fifty-one percent of Americans in a new Bloomberg News poll say they are worse off now than when he was elected. Two-thirds say the country is moving in the wrong direction.
Noting that unemployment was 7.4 percent when Obama was elected and now stands at 9.8 percent, Bloomberg found that Americans list jobs and the economy as their top concerns.
Just one-third support extending tax cuts for the wealthiest Americans, a concession Obama made to secure a deal on employment benefits, payroll tax cuts and more.
Taken together, it means Obama is taking a significant risk pushing an agreement with limited popular support on the tax cuts, on a promise that it has the potential to create “millions” of jobs.
With his package of tax cuts and jobless benefits, Obama said, “the average American family will start 2011 knowing that there will be more money to pay the bills each month, more money to pay for tuition, more money to raise their children.” If it fails, “the reverse is true: Americans would see it in smaller paychecks” and jobs would be lost, he said.
Obama’s attempt at a serious political repositioning is critical following the self-described “shellacking” he and the Democrats took in the Nov. 2 elections, said Cato Institute senior fellow Michael Tanner.
“He is already bleeding. And to a large extent the presidency exists on the myth of omnipotence,” Tanner said. “Once we find out they are human and can be beaten [politically], they lose an awful lot of power.”
