History of Compromise Brought Obama to Tax-Cut Deal

U.S. President Barack Obama
U.S. President Barack Obama. Photographer: Roger L. Wollenberg/Pool via Bloomberg

From Harvard to the halls of Congress, Barack Obama has demonstrated an ability to compromise. Pragmatism was his default position, he promised. Consensus building, his specialty.

With Democrats in charge of Congress and Republicans united against his agenda the last two years, there was little opportunity or incentive to compromise. Now, after midterm elections that cost Democrats control of the House, Obama has struck an $858 billion deal with Republicans on taxes and spending, convincing many Democrats he’s serious about working with the opposition and displeasing them in the process.

Activists in his party are threatening a primary challenger. By agreeing to an extension of the Bush-era tax cuts for the highest income earners in exchange for measures to boost the economy, Obama finds himself being assailed for something he always said he’d do: compromise.

“He’s not a terribly ideological president; he’s a pragmatist more than anything else,” said Simon Rosenberg, president of NDN, a Washington-based advocacy group formerly called the New Democrat Network. “He has passed more meaningful legislation than anyone in the modern era, and the only way he was able to do that was by being pragmatic and working with the people in power at the time.”

The alarm among Democrats that Obama, who rode to the presidency on a promise of pragmatism, is more than willing to negotiate is matched only by their worry that he isn’t particularly skilled at it.

Looking for Fight

“When did the fight happen?,” Representative Anthony Weiner, a New York Democrat, asked on NBC’s “Meet the Press,” Dec. 12. “Did the full-throated fight happen?” With a Democrat in the White House and his party still in charge of both houses of Congress until January, “We’re acting like we have a weak hand,” Weiner said.

Obama, 49, came into office with a pattern of not letting ideology get in the way of practical solutions, either for a larger political goal or his own ambition.

At Harvard, Obama was elected the first black president of the Harvard Law Review by convincing different ideological factions that he would listen to their concerns. He wasn’t someone who “demonized conservatives or personalized politics,” Brad Berenson, an editor during Obama’s tenure at the journal who later was counsel under President George W. Bush, recalled in a 2008 interview.

Offshore Drilling

That flexibility carried over to the national politician. As a presidential candidate, Obama supported the publicly financed election system, yet opted out of it to spend a record $740.6 million. He bucked many of his supporters when he announced he would grudgingly back an expansion of offshore drilling as part of an energy plan to reduce record oil prices.

“What I don’t want to do is for the best to be the enemy of the good,” Obama said Aug. 2, 2008, in Florida during the heat of the presidential campaign, announcing his support for the energy plan. “If we can come up with a general bipartisan compromise in which I have to accept some things I don’t like, then that’s something I’m open to.”

Once in the White House, Obama promised to put health-care negotiations on C-Span, and then negotiated behind closed doors an $80 billion deal with the pharmaceutical industry to secure its support for his overhaul. The president also issued waivers for lobbyists to work in top administration posts, overriding his own ethics rules.

Not Defeat

Whether backing a deal on an energy bill over two years ago or tax cuts, Obama has maintained that compromise isn’t defeat.

“I recognize that folks on both sides of the political spectrum are unhappy with certain parts of the package, and I understand those concerns,” Obama said Dec. 13 as the Senate was clearing the way for a tax-cut vote. “But that’s the nature of compromise -- sacrificing something that each of us cares about to move forward on what matters to all of us.”

U.S. stocks rose on Dec. 7, after Obama announced the deal with Republicans to extend the tax cuts for two years, sending the Standard & Poor’s 500 Index to a two-year high.

Kevin Caron, a market strategist in Florham Park, New Jersey, at Stifel Nicolaus & Co., said the announcement “takes off the table a great degree of uncertainty.”

Those gains were wiped out later that day after a probe of insider trading reportedly widened and Obama said he’ll push to overhaul the tax code in two years.

Pay Freeze

For some, the question is whether Obama tacks too far and gives up too much for too little in return, sometimes for nothing at all. While he agreed earlier this year to an expansion of offshore drilling, he never got a deal with Republicans on a comprehensive energy bill. Similarly, he announced this month a pay freeze for federal workers without getting anything from Republicans who had been demanding it.

“You don’t make concessions unless the other side works for it,” said Herb Cohen, author of “You Can Negotiate Anything.” “A concession given when the other side doesn’t work for it isn’t appreciated.”

Even so, after the Senate’s passed legislation yesterday to extend the tax cuts, some House Democrats seem resigned to pass the measure and the deal has received endorsements, most notably from former President Bill Clinton. Former colleagues say the deal is vintage Obama.

Illinois Record

“I don’t think national Democrats should be surprised that President Obama compromises, if they knew what his record was back when we was a community organizer and a member of the Illinois General Assembly,” said Kirk Dillard, a Republican who served with Obama in the Illinois state legislature and appeared in television ads for him during the campaign. “He was always somebody who would compromise.”

That style leaves Obama open to criticism that he’s vague and unprincipled. In the Illinois senate, he voted “present” close to 130 times, on issues ranging from the age at which juveniles can be tried as adults to anti-abortion legislation.

In many ways, being elusive was an asset during the presidential campaign. Obama’s primary challenger Hillary Clinton, and then general election opponent John McCain, voiced frustration at not being able to pin him down on issues. Their argument that Obama lacked experience didn’t sway voters.

Energy Bill

They both criticized Obama for his 2005 vote in favor of an energy bill because it contained oil-industry tax incentives. The then-freshman Illinois senator defended his decision as making critical investments in renewable energy, and in a 2005 press release said he “reluctantly” voted for the measure.

In the current political environment it remains to be seen whether Obama can build consensus by rising above the partisan squabble or whether opponents, even within his own party, will endanger his presidency by casting him as malleable and ambiguous on his convictions.

“If you are a pragmatist and you are willing to change your opinion on what it takes to get a deal, then that could look like some people as if you don’t have any core beliefs and it’s confusing about what you’re actually for,” Rosenberg said.

Obama has said that he regrets not doing more to bridge the partisan divide in his first two years in office. At the same time, administration officials say Obama had to remain faithful to his guiding principles in a time of economic crisis. They disputed any suggestion that the president failed to articulate those principles.

Partisanship Risk

“This comes down to leadership.” White House press secretary Robert Gibbs said. “This comes down to the president being unwilling to risk the economy.” He also warned of the consequences of partisan calcification.

“The world we live in now requires that each party is going to have to work with the other party to get something done,” Gibbs. “If everybody’s unwilling to do that then the next two years are going to produce nothing.”

That pragmatism helps Obama position himself for re-election in 2012, said Allan Lichtman, a political history professor at American University in Washington.

“However disgruntled his base may be it has nowhere else to go in 2012,” he said. “This deal is all about stimulating the economy. Obama knows that if the economy recovers over the next two years he will rather easily win re-election, much like Reagan in 1984.”

Even political opponents say Obama’s consensus-building could seal the deal for a second administration.

Senator Tom Coburn, an Oklahoma Republican with whom Obama worked on ethics legislation when both were in the chmaber, said he’s optimistic the president’s leadership style will forge more consensus with Republicans.

“We didn’t see that before, so I think we’ve got to have some time and give him some maneuvering room, give him time to adjust to the new realities,” Coburn said.

“He’s a good guy, he’s smart, he’ll figure this out on how to work it,” he said. “And if he doesn’t, he’s going to be a one-term president.”

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