Liberal House Democrats and their outside allies are railing at President Obama for his tax deal with Congressional Republicans. This anger is misdirected. Let’s examine the President’s three basic bad options for a post-election negotiating strategy, and a fourth option that would have allowed the Left to win on taxes.
Option 1 – Cut a deal with Republicans in 2010
The key element of this strategy is “in 2010.” Negotiations occur with the outgoing Congress and while Rep. Pelosi is still Speaker.
For the President this strategy did not risk the harmful policy effects of tax increases on January 1 or the political blame that would accompany them. It clears the decks of the 2010 agenda, allowing a fresh start in the State of the Union address. Rep. Pelosi is still be Speaker during the negotiations, providing a small tactical advantage.
At the same time, by setting a deadline and explicitly avoiding a veto fight, the President gave up negotiating leverage.
Shortly after Election Day the President chose this option when he said he intended to resolve this issue in 2010. At that moment my hopes for a good outcome spiked upward.