Obama's Tax Deal: Straight from Clinton's Playbook

Obama's angered his base by compromising on the Bush tax cuts. But like Clinton who also bucked his party, it could lead him to a bigger political win.

To the utter dismay of his “progressive wing, ” President Obama has engineered a comprehensive deal on Bush tax cuts, the estate tax issue and other extenders, and a 2% reduction in payroll taxes for the next calendar year.

House Speaker Nancy Pelosi recognizes what has happened.  Sen. Bernie Sanders of Vermont recognizes it as well.  It’s called triangulation, the technique Bill Clinton used masterfully.

Against the opposition of his own party, and the vocal opposition of his wife, Clinton decided to push for and eventually sign into law a comprehensive welfare reform bill.  Republicans provided the votes for final congressional passage.

Clinton’s presidency revived in part because of the welfare deal.  He went on to re-election.

With 9.8% unemployment, and the U-6 unemployment rate at about 17%, Obama did what he had to do:  get 13 months extension of unemployment insurance, a 2% payroll tax cut, continuation of the earned income tax credit and expanded child care credit, and 100 per cent expensing for business investment.  And he did it all at the cost of merely giving Bush tax cuts to the wealthy for two years.

If Obama’s actions spur consumer spending and help small businesses begin to recover once again, unemployment might decline much more rapidly than most economists now predict.  If that happens, paint Barack Obama as really back in the game for 2012.

Triangulation has been turned into a dirty word by zealots on the left and right of the political spectrum.  In the old days, such actions were called compromises for the sake of the country.  Long live triangulation!