Obama Wisely Doubles Down on a Tax Debate

In the past week, President Obama did something pretty unique and innovative in politics -- he proposed a compromise with a winner takes all kicker.  

The Proposal: Maintain tax cuts for households who make under $250,000 while letting those cuts expire for those who make more than that.

The Compromise: Extend tax cuts for all households earning up to $250,000 per year.  This seems to be a pretty universally supported element of policy in D.C.  America is mired in financial uncertainty and high unemployment.  No politician wants to raise taxes on 98% of Americans at a time like this.  Republicans and Democrats are both on the record saying they support the extension of these cuts.  The President has now said that he agrees and we should get this done immediately.

The Kicker:  Where Republicans, Democrats, and the President disagree is what to do for those households that make more than $250,000.  Republicans want to extend their tax cuts as well.  Most Democrats oppose this option, but it carries some support in their ranks.  However, that support doesn't matter because President Obama is on the record saying he'll veto any legislation with this provision.  The President's kicker is that he is saying to Mitt Romney, "Let's get the thing we both agree on done and then the winner can have his way with the tax cut for the $250k+."

I think this is a bold and calculated gamble.  It doesn't give the President that much ammunition against Romney (no one is surprised that he supports the tax cut for the richest), but it does help him shape the national narrative of how he has been working against a do-nothing Congress.  If they won't even work to approve a tax break for 98% of Americans, what could he ever count on them to do?  If this election is a referendum on Obama, this lets him shift that narrative some to focus on how he has been handcuffed by the GOP-controlled House.  Also, it won't hurt to have clips of Romney on the stump, defending the wealthy while the campaign continues to use negative ads to paint him as an out of touch millionaire.

Furthermore, if Congress acts on his compromise, then the President walks away with two victories.  First, he gets to tout the continuation of a massive tax cut for the vast majority of the electorate.  Second, and not as immediately obvious, he gets to regain some of his mojo as a "transcendant figure" who can work across party lines to battle back gridlock and get real progress accomplished, even in broken Washington, D.C.  This refrain was a popular one for candidate Obama in 2008, and this debate gives him an opportunity to own it again.

If the compromise is accepted, then this move will really pay off for the President.  If it's not accepted, I see it providing some nice talking points and debate jabs, but it won't be anything to build the rest of the campaign around; however, one more block toward building a statue of Romney and Republicans is never a bad thing.

Overall, I appreciate the President's compromise and his boldness to dare Republicans to place a bet on him losing by accepting the compromise, now.  It'll be interesting to see if this aggressive portrait of Obama carries through to election day.