Tax compromise: Obama finally sets a bipartisan model

Many Democrats strenuously object to President Obama’s compromise with Republicans to temporarily extend the Bush tax cuts for all Americans. But Mr. Obama correctly judged that the nation needs a bipartisan deal in Washington more than it needs a political showdown.

“We cannot play politics at a time when the American people are looking for us to solve problems,” the president said Dec. 6. That sounds more like the old Obama, the one who said there’s neither red nor blue America, the one whom voters backed in 2008.

Just like the moribund economy needs a confidence boost, so does America’s politics. Leaders in Congress and the White House must show the public that Republicans and Democrats can work together on urgent and controversial issues such as the previous president’s tax cuts, set to expire at the end of the month.

By creating a degree of certainty on taxes where there previously was none, progress on the political front can help build momentum on the economic one. In a Washington frozen by icy political conditions, compromise must triumph over particulars.

Not that the particulars don’t matter. Many Democrats are howling over the two-year extension of tax cuts for households that earn more than $250,000. Obama also clearly doesn’t like this; it violates his campaign promise.

Democrats maintain the public is with them. Indeed, polling shows that more Americans favor continuing tax breaks for earners under the $250,000 cutoff than continuing them for everyone. If only Democrats held their ground, liberals reason, the GOP would have to retreat.

But Republicans have shown themselves quite capable of standing their own ground, as they did last weekend when they led the Senate defeat of two Democratic proposals on the tax issue. Substantial GOP gains in the midterm elections have meanwhile strengthened the party, though not enough to win tax-breaks-for-all that are permanent, as Republicans originally wanted.

The president wisely considered last weekend and what might happen if Democrats also dug in. “There’s no reason to believe that this stalemate won’t continue well into next year,” he said in announcing the compromise, which also grants the favorable treatment for estate taxes – a favorite GOP issue.

Without a deal, taxes would go up on all Americans Jan. 1, and millions of jobless would no longer receive unemployment benefits, which were running out.

In this case, Obama put country ahead of party and allowed the two-year tax-cut extension to evolve as an election issue for 2012. He is bitterly disappointing the left, but he’s also making the kind of tough choice that can move things forward in Washington.

It also shows he learned something from the crushing midterm elections, in which independents – his previous supporters – deserted him. After the elections, a Pew Research Center poll showed that about 60 percent of independents wanted the president to work with Republican leaders, while only 30 percent wanted him to stand up to them.

Is the president caving? Some will interpret it that way. But you could also say he’s belatedly leading.