With New Tax Bill, a Turning Point for the President

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The New York Times
By: Peter Baker
December 17, 2010

WASHINGTON -- With the stroke of a pen, President Obama on Friday enacted the largest tax cut in nearly a decade and, in the process, took a big step toward reinventing himself as a champion of compromise in a politically fractured capital.

When he first struck the deal two weeks ago, a sour Mr. Obama announced it by himself, lamented his own agreement and testily denounced his Republican partners as "hostage takers" and his liberal critics as "sanctimonious." By the time he signed it into law on Friday, little more than six weeks after an electoral debacle for him and his party, he stood with the Senate Republican leader and celebrated the package as a hallmark of cooperation.

"The final product proves when we can put aside the partisanship and the political games, when we can put aside what's good for some of us in favor of what's good for all of us, we can get a lot done," Mr. Obama said buoyantly at a bill-signing ceremony in the White House complex. "I'm also hopeful that we might refresh the American people's faith in the capability of their leaders to govern in challenging times."

One leader in particular. Mr. Obama's embrace of compromise comes as he tries to find his footing after midterm elections that cost the Democratic Party control of the House and pared its majority in the Senate. As the weeks have passed, the president who has emerged appears increasingly more confident than chastened, eager to revive his campaign image as a postpartisan leader who can work across party lines even at the cost of alienating his own supporters.

Such an identity is hardly new to Mr. Obama, but it has largely eluded him in his first two years in office. As a candidate, he managed to come across as diametrically opposite to different supporters, the leader of a new progressive movement to some and a reasoned pragmatist who could bridge the divide in Washington to others. If the first identity dominated his opening two years, the second may come to the fore in his next two.

"These two aspects of his persona have existed side by side from the very beginning," said Geoff Garin, a Democratic strategist who in 2008 worked for Mr. Obama's opponent for the presidential nomination, Hillary Rodham Clinton. However imperfect, the tax deal "spoke to a deep feeling in the country about the need to work across party lines to get things done," he said.

It remained unclear whether Mr. Obama can, or would want to, sustain such an approach. The tax deal may be a one-off situation where a looming end-of-the-year deadline forced action to avoid tax cuts expiring across the board. And in reality, of course, it is much easier for politicians to agree about cutting taxes and adding the bill to the national debt than, say, cutting spending or other much tougher choices to come.

"Sometimes the lessons take a while to sink in, particularly if you're a person of great arrogance, as he is," said Peter H. Wehner, who was a top White House aide to President George W. Bush and is now a senior fellow at the Ethics and Public Policy Center in Washington. "But he's not suicidal, and it's beginning to kick in."

Still, Mr. Wehner said, "it may be seen as an anomaly rather than the beginning of a trend."

Indeed, Mr. Obama has made it clear that he will press advantages where he sees them, and he has chosen an energetic agenda for a lame-duck session beyond taxes and other issues that had to be addressed because of deadlines.

He decided to wage a full-fledged fight to push his arms control treaty with Russia through the Senate before it returns next month with five more Republicans. And he has given no ground in the legislative battle to end the ban on gay men and lesbians serving openly in the military.

"His strong resolve was we were not going to meekly limp out of this year not having accomplished what he needed to accomplish," David Axelrod, the president's senior adviser, said in an interview.

But Friday's tableau of the Democratic president flanked by Senator Mitch McConnell, the Republican leader and his prime nemesis on Capitol Hill, served as a portrait of the change in his presidency. While Ronald Reagan, Bill Clinton and both George Bushes advanced top priorities in tandem with the opposition party, this was the first time in Mr. Obama's presidency that he forged a major bipartisan compromise on a signature issue -- and it was Mr. McConnell's first time at a major White House bill signing under this president.

The $858 billion package Mr. Obama signed extends Bush-era tax cuts for two years, pares back payroll taxes for a year, lowers the scheduled tax rate for the largest estates, extends jobless benefits for the long-term unemployed for 13 months and continues a series of other tax cuts benefiting businesses, parents and students.

The entire cost will be added to the federal debt, and arguably Mr. Obama has succeeded mainly in buying a temporary truce by delaying a final reckoning on the fundamental questions of who deserves to pay how much in taxes. But for the moment, the plan has polled well and the White House has fended off protests from Mr. Obama's party.

Mr. Axelrod, who once referred to the parts of the tax plan benefiting the wealthiest Americans as "odious," said this was not a day to focus on the negatives. "This is something to celebrate," he said. "The fact that we got this done is something to celebrate."

At the ceremony, Mr. Obama gave a nod to criticism from the left, noting that "there are some elements of this legislation that I don't like." But, he added, "that's the nature of compromise," and focused on what he considered the benefits of the accord, particularly the expectation that it will stimulate economic growth.

"It's a good deal for the American people," the president said. "This is progress. And that's what they sent us here to achieve."

He added, "There will be moments, I am certain, over the next couple of years in which the holiday spirit won't be as abundant as it is today." But, reviving a phrase used on the campaign trail, he said, "I don't believe that either party has cornered the market on good ideas."

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This page contains a single entry by CFED published on December 20, 2010 3:51 PM.

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