Promises, Promises

“Read my lips. No new taxes!”

- President George H.W. Bush at the 1988 Republican National Convention

This is are probably one best known political quotes in recent American political history.

In cutting a deal with the Republicans to extend everyone’s “tax cut” from the Bush era for two years, Obama got only a one year extension of jobless benefits in return. Obama, the born-again supply-sider is now suddenly saying raising taxes in a recession is bad economics. No matter how he positions it, he will be seen as having broken one of his key campaign promises, and betraying a core position in his campaign.

Just as President George H.W. Bush was when he raised taxes in the middle of his Presidency.

Bush had economics on his side. He needed to raise taxes to address the deficit created by Ronald Reagan. But he did not prepare the political landscape for the switch. He did not make the Democrats pay a political cost for raising taxes. He did it as part of a negotiated deal with congress.

Sound familiar?

In 2008 President Obama made letting the Bush tax cuts for the “wealthy” expire a center piece of his campaign. It was one of the main differences he drew between himself and John McCain. Two years later he gave on this point almost from the beginning of negotiations over a tax deal. He claims that he did so to preserve tax cuts for everyone and to extend unemployment benefits for a year.

There were some hard, interesting political reality behind Obama’s actions.

Almost as popular a stance as letting the tax cuts for the “wealthy” expire, was preserving the tax cuts for everyone. Looking at the polls these two positions are almost identical in popularity, and had broad support through nearly all demographics.

An interesting point in the tax cut discussion was why the definition of “wealthy” kept changing. The percentage of people earning $250,000 or more has dramatically increased since 2000. From a political viewpoint, 2008 was the first time that Democrats had as much support among voters earning $250,000 to one million dollars as Republicans.

This fact helps explain why he simply did not have the votes in the Senate for a middle-class only tax cut. The Democrats were reluctant to alienate a new and growing Democratic voter group over a position that was only slightly more popular than the alternative.

All of this may have figured into the White House’s calculations.

But if Obama had played his hand differently, he could have easily had the strength to let the tax cuts for the “wealthy” expire while getting everything he got out negotiations he got from the Republicans.

Had the Democrats forced a tax cut vote before the election - say in the beginning of September. Hard on the heels of the that vote the next vote should have been on unemployment benefits. Again the Republicans would line up against it. As the Democrats controlled both houses of Congress they only needed to bring these up for a vote one time, make the Republicans vote against both proposals and never bring it back to the floor after their defeat.

This strategy would have forced the Republicans into a position of explaining to the voters in the weeks before the election why they were voting against tax cuts for the middle class to keep tax cuts for the rich.

If that had happened the Democrats would have had strong message to run on (since they were too afraid to run on health care). Obama could have pounded the Republicans every day of September and October on how they were sticking it to the little guy while helping their rich supporters.

If things had gone well, the Democrats could have brought the tax vote up again in October, along with unemployment benefits. The Republican position would have been even harder for them to defend, and the Bush cuts could have been rolled back then, and the Democrats could have also gotten unemployment benefits through.

Instead the House Democrats took symbolic votes on topics like cap and trade, that pleased the base but angered everyone else. The Senate, with Harry Reid occupied with his re-election, took a pass, and most Democrats cowered in the corner afraid to run on the party’s accomplishments over the last two years.

As it stands now, Obama is in the position of saying, “No next time I will really mean it, when I say roll back the tax cuts!” Democrats will have no reason to believe him. Republicans now think they can simply whisper their opposition and Obama may leave the field without a fight. Obama’s electoral base feels let down, congressional Democrats feel betrayed. All of which left Obama weakened.

Time has passed and the tax cut fiasco has been buried under START and “Don’t Ask, Don’t Tell.” It has gone from being seen as collapse of Obama’s political will to a great bipartisan accomplishment. But, the political landscape is littered with political careers ended by such accomplishments. As Obama looks towards the new Congress, he should remember that. Otherwise, he may wind up like the first President Bush, remembered mainly not for his accomplishments, but for breaking a key promise and becoming a one term President.