- Guest post submitted by Hannah McKale
Did President Obama hurt or help his chances for re-election in 2012 by compromising on the tax cut extension bill? Did he cave in to Republican demands, or did he actually see this deal as a second stimulus that, as syndicated columnist and Fox News Contributor, Charles Krauthammer, surmised, Obama would never have gotten had he simply asked for it directly?
It isn’t a secret that the majority of the Democrats were extremely upset when the president said that, although he was against extending the tax cuts to the wealthiest Americans, common ground (with the Republicans) had to be found. To the liberal far left, this was the worst thing their leader could do. Some probably even questioned why any leadership schools would name their establishments after Obama. To say they were not happy with what they construed as a complete surrender to the right-wing Republicans would be an understatement. Rumors started flying that once again President Obama broke a campaign promise and the minute he signed the bill into law he kissed any chance of re-election good-bye. Or did he?
The President is smart enough to know that his far left policies were not as popular with the American people as he had hoped. He learned this lesson, obviously, in the mid-term elections last November, when the Republicans won the most House seats since the 1938 mid-term elections, their biggest House majority since 1946. Obama had to make a move to the center if he was going to win back the independent voters who were abandoning him left and right (pardon the pun). He was also well aware that the majority of the people just wanted their representatives to stop quibbling and do something about the economic situation. To help Obama in this task, he enlisted the aid of former President Bill Clinton, who had been in the same predicament in 1992, yet still managed, by moving to the middle, to get re-elected. It worked for Clinton, so why not Obama.
As in any business deal, compromise is essential to getting things accomplished. The Republicans were not going to budge on their insistence that the tax cuts remain for all income levels. When the President decided to accept this, was he really just conceding? He knew the Republicans wouldn’t move on this issue, and he wanted this bill to pass during the lame duck session while the Democrats still had most of the power. After all, if it didn’t pass it would be brought up again in January with the new Congress, when the Republicans would have more power and the compromise outcome would be much different. It was also vital that he get the unemployment extensions passed to continue to help those families struggling from joblessness. He also managed to get some energy subsidies for ethanol, wind, and solar power, in the bill. Would that have happened in the new Congress?
What about the Estate Tax, or Death Tax as some call it? The majority of the Republicans claim it kills jobs, hurts small businesses – especially family farms – and is an immoral, double tax on people who have already paid their share of taxes throughout their lifetime. They wanted to get rid of it completely. The Democrats wanted to raise the top Estate Tax rate to 55%, the compromise was 35%. What would it have been if the bill hadn’t passed during the lame duck session? Not to mention, everything in this bill has an expiration date. All of this will be debated again during the 2012 campaign season. This could go either way for the President. If the economy and unemployment improves, his chances for re-election could be good, especially if in the minds of the people the bill was passed only because the President reached out across the aisle and compromised. If the economy and unemployment aren’t much better, these same people could look at it as the Republicans fault for extending the tax cuts to the rich. As always, Only time will tell.
Hannah McKale recently received her Masters in Political Science, and is currently seeking a Ph.d program. McKale focuses much of her writing on the international political economy. When she is not working she is often traveling the world, or advocating for online universities.
