Obama Seeks to Make Amends With Unions, Democratic Activists Over Tax Deal

President Barack Obama today will meet with union leaders to try to heal a relationship strained by his agreement to extend Bush-era tax cuts. Behind the scenes, the White House is waging a broader campaign among Democratic Party loyalists to undo damage over the deal.

The administration is making an “all hands on deck” effort to contact party activists angry over the accord, Jared Bernstein, Vice President Joseph Biden’s chief economic adviser, said before the U.S. House last night passed the $858 billion bill. Bernstein has made phone calls and held meetings with activists to defend a deal with Republicans that continues tax reductions for all Americans, including top earners.

“The president is trying to build consensus among labor leaders for his compromise tax policy” said Amy B. Dean, a former official with the AFL-CIO labor federation. The administration has “no problem reaching out to the labor movement when they need labor to be part of their electoral coalition. But they quickly forget that labor has a role to play in their governing coalition.”

Obama today will sign the bill, which extends for two years all Bush-era tax cuts. Before the House voted 277-148 for final passage, lawmakers defeated an amendment crafted by some Democrats to express displeasure with the legislation and especially a Republican-backed proposal to cut the estate tax.

‘Fight Harder’

The president may find union leaders hard to win over during today’s meeting. In a statement after the House vote, AFL-CIO President Richard Trumka said “this deal comes at a terrible price” and vowed to “redouble” efforts and “fight harder” on behalf of working people.

In a Dec. 15 statement Trumka said he wanted the House to change the tax agreement to eliminate what he called an “indefensible” reduction in the estate tax, which he said was “simply another bonus to the super-rich.”

Obama and Labor Secretary Hilda Solis are scheduled to meet at 2 p.m. in the White House’s Roosevelt Room with labor leaders, in discussions the White House says will focus on jobs and the economy. Among those attending are Trumka; United Steelworkers President Leo Gerard; American Federation of Teachers President Randi Weingarten; Service Employees International Union President Mary Kay Henry, and United Auto Workers President Bob King.

Investors Cheered

Obama’s Dec. 6 announcement that he would agree to renew the Bush tax cuts in exchange for extending unemployment insurance and lowering the payroll tax boosted stocks, with the Standard & Poor’s 500 Index rising to a two-year high in early trading the next day.

Liberal activists responded to the deal by lashing out at the president.

“President Obama let down millions of voters who trusted him when he said he would fight for his core campaign promise -- ending the Bush tax cuts for the rich,” Adam Green, co-founder of the Progressive Change Campaign Committee, said in a Dec. 6 e-mail to the grassroots group, which claims 650,000 members.

Such activists are bound to get angrier as the president “governs more from the center” over the next two years, said Mark Penn, a pollster who worked for former President Bill Clinton. Penn said Obama must “work with the independents, and the vital center and also, at the end of the day, rally the base” to get re-elected.

‘Like Gnats’

Not everyone considers liberal angst a serious problem. Angry progressives are “like gnats” who won’t be able to stop Obama from being re-elected, said Democratic strategist James Carville. Carville said there isn’t a lot progressives can do to hurt the president other than “run around.”

Still, enthusiasm among young voters, among Obama’s biggest backers, is slipping. A Bloomberg National Poll conducted Dec. 4-7 showed that just 51 percent of respondents under 35 give the president a positive job-approval rating.

And John Aravosis, who runs AMERICAblog, a website that focuses on gay rights, said the left may not be as motivated in 2012, which could hurt Democratic fundraising. Obama brought in a record $749 million for his 2008 campaign, Federal Election Commission records show, with 54 percent coming in donations of $200 or less.

In the 2010 elections, gay advocates and political action committees linked to gay causes gave less than half of the $2 million they did in the 2006 midterms, according to the Center for Responsive Politics.

‘Don’t Give’

Aravosis helped create the “Don’t Ask, Don’t Give” campaign calling for a boycott of donations to the Democratic National Committee, Obama’s campaign, and Organizing for America, the president’s political arm outside the White House until they “keep their promises to the gay community.” Among them are the repeal of the military’s “don’t ask, don’t tell” law.

The White House is taking these concerns seriously, said Bernstein, who spent more than a decade at the Economic Policy Institute, which focuses on lower-income Americans. He’s among officials, including Biden and budget director Jack Lew, dispatched to quell concern among Democrats.

Today’s meeting with union leaders is part of that effort.

In the past two years, Obama and the Democratic Congress delivered some labor-backed legislation, such as the health-care overhaul and a law making it easier for women to sue employers for wage discrimination.

Card Check

On other issues, like the “card-check” bill, which would make it easier for workers to join a union, labor has been frustrated that Democrats failed to overcome Republican opposition.

Labor leaders have voiced opposition to the tax-cut deal since its announcement. “If we made the choice to invest in job creation, the tax breaks for the wealthy could get unemployment under 8 percent by the end of 2012,” Henry of the Service Employees International Union said in an e-mailed statement the day after the president announced the deal.

Carville said the White House shouldn’t be too concerned about the pushback from some of the party loyalists.

“There’s a lot of time between now and November of 2012,” he said. “It’s not that a lot can happen, it’s that a lot’s going to happen.”

To contact the reporter responsible for this story: Kate Andersen Brower in Washington at Kandersen7@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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