Shortly before midnight Thursday, the much-debated GOP-Obama tax deal was passed in the House of Representatives by a bipartisan vote of 277-148. Those expecting a swift end to the protracted struggle in Congress were kept in abeyance earlier that day, after leftist opposition successfully derailed the vote in the House just before it was brought to the floor. After passing handily in the Senate by a vote of 81 to 19 Wednesday, the bill was widely projected to pass in the House by Thursday afternoon, but a procedural dispute sent Democrats back to the negotiating table. Passage was never seriously in jeopardy, but the perplexing aspect of the incident was constituency that halted the process. The tax cut revolt from far-left Democrats may be an early sign of serious opposition from President Obama’s key supporters; a prospect that ought to be deeply troubling to a president facing record-low approval ratings.
The dispute principally arose from the estate tax compromise brokered between Obama and Republican leadership, which leftist Democrats have vehemently railed against since the bill was unveiled. Under the new tax plan, the lapsed estate tax (or “death tax”) would be reinstated at 35% on estates in excess of $5 million. Left-wing Democrats, however, had pushed to include an amendment that would increase the rate to 45% on estates over $3.5 million. This is in addition to general disapproval of extending the current tax rates for all Americans, including high income earners.
Despite broad-based support (even among Republicans) and exhortation from the Obama administration, left-wing Democrats would not cede the amendment issue. The parameters of the debate had to be changed to ensure that objecting Democrats could vote, symbolically, for the amendment to the raise the estate tax (which was defeated overall), while also preventing an altered bill from having to be sent back to the Senate. Senate Republicans, backed by the Obama administration, issued a stern refusal to pass any altered bill. House opposition also demanded time to air dissent on the floor, which was granted.
Though annoying, the procedural stumble did not impact the bill’s passage. But the incident is notable for its clear defiance of the Obama administration’s entreaties. Leftist opposition was never conducted with the expectation that their draconian fiscal demands were achievable. Early on, leading opponent Anthony Weiner (D-NY) admitted “the writing is on the wall.” The same could be said for the amended version of the bill offered by House leftists – which failed, predictably, 194 to 233. Why was this futile battle prolonged?
In answering this questions, let’s also consider the bountiful economic stimulus measures secured by President Obama in the deal, which, as conservative columnist Charles Krauthammer pointed out, amounted to the “biggest stimulus in American history” – with Bill Clinton arguing the same. Republicans had vowed to thwart a second round of stimulus measures, long sought by left-wing Keynesian religionists. Now, with the Obama-GOP tax deal, the battle won’t be necessary; the golden goose came gift-wrapped. Albeit artificially, Stimulus II, as it’s called, will decrease unemployment and increased GDP – just in advance of the 2012 presidential election. Furthermore, as The New York Times pointed out, the two-year extension on the existing tax rates for the wealthy is likely to frame a coming debate on tax code reform. Such reform has broad bipartisan support, particularly as a way to address the deficit.
All prospects that the far-left cannot, apparently, countenance without a petulant spectacle. Instead, the Left insisted on voicing their opposition to Obama and recording as much for posterity. Yet the bill is not a conservative one by any stretch of the imagination. It is popular among conservatives because of a few sacred cows, and because Republicans were successful in inducing a total volte-face from Obama on the polarizing “Bush tax cuts.” But the bill is also quite popular with the center and among independents, who have steadily lost faith in Obama.
In essence, the Obama-GOP compromise was the president’s first flirtation with centrist governing since he assumed office. Through centrist governing, Obama may reclaim much of his popularity with the much-coveted independents. The risk is in alienating the very vocal – and unforgiving – left-wing in the process. The response from House leftists Thursday was, in many ways, a clear glimpse into the fallout from such alienation.
Unfortunately, Obama’s drift to the center and cool alliances with Republicans will only become more pronounced on a number of fronts. Lurking in the background of the national discussion on tax rates is the ponderous deficit. Late Thursday night, the $1.1 trillion “omnibus,” or general spending bill was yanked from the Senate floor. Republicans were certainly happy, but President Obama, who publicly derided the 2009 omnibus bill and intimated that he would not sign another in 2010, was likely also pleased. Relatedly, with tax rate increases now taken off the table as a way to manage the public debt, reforming government spending must now be approached with new rigor. While most Republicans will gladly take on this mantle, Obama’s fiscally conservative “blue dog” Democrats have been exorcised by approximately half. On the other hand, the loose-spending Progressive Caucus projects it will gain members in the new Congress, with 41% of incoming House Democrats (out of 185) self-identifying as “progressive.”
This is to say nothing of the war in Afghanistan. Amidst the drama of tax increases, the annual review of strategy in Afghanistan was released Thursday. The war is deeply unpopular with Obama’s left-wing base and is becoming more unpopular with the general public. Unfortunately, the strategy report made clear that gains made in the region were “fragile and reversible,” as President Obama described it. This only affirms speculation that the administration’s prior withdrawal date of July 2011 is fleeting. As withdrawal dates come and go, general malaise may encourage the anti-war Left to become more combative toward the conflict.
Concerns over Obama’s discontent base has been fueling speculation of a possible primary challenge in 2012. Although opinion ranges greatly on this issue, the prospect is not as far-fetched as it may seem. Presidents Jimmy Carter and George H.W. Bush faced primary challengers before receiving the nomination during their reelection campaigns – and both lost reelection. While it’s unlikely that Obama would not ultimately receive the nomination, especially considering the importance of the African-American vote to Democrats, if a challenger does emerge, this will be a bad omen indeed. Or good, as the case may be.