Is this Obama’s defining moment going into 2012?

The payroll tax cut debate is a perfect opportunity for Obama to draw a line in the sand


The payroll tax cut controversy is providing President Obama with a moment similar to the government shutdown confrontation between President Bill Clinton and Newt Gingrich in 1996, which most observers credit for Clinton’s successful re-election campaign in 1996. Back then Speaker Gingrich refused to vote for appropriations to keep the government in operation in order to force government reductions in spending programs , giving Clinton the choice to either capitulate or allow the government shutdown. He chose the latter and Gingrich got the blame. It became a test of strength and leadership on the part of the president. It was a defining moment for his presidency and his re-election the following year.

The Senate last weekend voted to extend both the payroll tax cut and unemployment benefits for two months. Granted, Obama got less than he wanted—he wanted one year and wanted to tax millionaires to pay for it—but he is winning the debate on middle class tax relief. Senate Republicans understood that and joined their Democratic counterparts in voting for the measure. The House, in later rejecting the deal, showed that Tea Party intransigence still has a hold on the Republican caucus and could give Obama an edge as the election year begins in earnest in the New Year.

House Speaker John Boehner initially seemed willing to support the measure, only to reverse his position when he consulted his caucus. The Wall Street Journal condemned the move and chastised the Republicans for making Obama look like a tax cutter after spending years painting him as a reckless spender. As a result, Obama, who seemed to be in the ropes entering the election year, suddenly finds himself on the right side of what could be the defining issue of the upcoming election—income inequality.

Boehner has since made a deal with the Senate to extend the measures for two months, and has agreed to work toward an agreement to extend the tax cut and expanded UI benefits for a full year, as Obama requested. It is a meaningful concession, but the question remains: Who pays for it all?

A word of caution here: the debate will resurface after the holidays and the Republicans are not expected to mellow as the party primaries begin. Obama will once again be facing some strong GOP resistance . This time, however, he should not count on the Republicans being divided, as was the case this past week.

The GOP, whose best hope to recapture the White House depends on making the upcoming election a referendum on Obama’s presidency and his handling of the economy, is just as suddenly on the defensive with respect to income inequality. The Tea Party’s successes from just a year ago are fading. Recent polls show support for Obama edging up and generic Republican poll numbers decreasing. The House’s tactics are turning into a holiday gift for Obama.

By all accounts, it was a good week for Obama and a really bad one for Boehner. While Obama held his ground, there will be many more challenges down the road. Obama had a lot at stake in this latest battle with Congress. The mid-terms were a disaster for him and, while he eventually recovered somewhat in the polls thanks to the killing of Obama Bin Laden, the summer showdown over the U.S. debt made him look weak and too compromising. This image still lingers; however, since Labour Day weekend and the presentation of his jobs bill, Obama has seemed more focussed and the campaign magic is returning. After the holidays , he cannot appear to back down now when the battle resumes. Too many middle class people are hurting. This is his moment to draw a line in the sand.


Is this Obama’s defining moment going into 2012?

  1. What a complicated mess – I feel so sorry for the American people – 10 more months of this posturing.
    From the WSJ:
    “The bill’s $33 billion cost is expected to be covered by an increase in fees charged to mortgage lenders by government housing agencies Fannie Mae and Freddie Mac. That has been criticized by the firms’ regulator and industry analysts, who say it will complicate the task of revamping the mortgage giants.
    The fee increase, expected to raise about $35.7 billion in revenue over 10 years, likely would be passed on to new-home buyers, raising their monthly mortgage payments by as much as $15 on mortgages of $210,000.”


  2. If a two-month extension to a tax cut is a “defining moment”, then heaven help Obama.

    I mean, there is absolutely no sense to a two month extension.  Companies won’t even be able to adjust their payroll systems in time to account for it.  And what’s the point to the change anyway?  Either extend the cut for a meaningful amount of time, or don’t extend it at all.

    It’s this kind of garbage that makes people hate politicians. Obama is playing silly games with this, trying to paint himself as a tax cutter for a 2 month extension.

  3. This article contains quite a lot of wishful thinking.

  4. Merry Christmas all.

    The problem with Obama, and also apparently with many (all?) in the press, is seeming inability to see beyond “how does this poll” to “how does this affect the future of the country”.  Granted, with Obama it’s confusing because he often even gets “how does this poll” wrong, but he and his defenders all seem to confuse image with substance.

    It’s a two-month tax-cut extension.  Is this substantial?  No.  Does Obama care?  No. 
    Is he really a defender of tax cuts in principle?  No.  Does he care?  No!  

    One is reminded of Cicero here:  the honourable thing is often also the most expedient thing.  If Obama were to concentrate on the honourable thing, namely doing what’s best for his country rather than what his base demands or what his pollsters tell him, he’d extend the tax cuts indefinitely so that companies can plan for the addition to their balance sheets and start hiring new people with the extra money.  That would be called “creating jobs”.  

    Instead Obama tries to satisfy his base by not letting “millionaires” and “fat cats” (i.e. small companies) keep more of their profits for the long term, and simultaneously tries to move up in the polls by maneuvering to extend the tax cuts for a negligible interval so as to paint himself as a “tax cutter”, while painting those who oppose this kind of posturing as both taxers and defenders of the greedy rich.  None of this, of course, is good for the country either economically or in terms of unifying it and resolving class warfare.

    Hopefully the voters, unlike the pundits and journalists, will not be so airheaded as to let the illusions cloud their view of what the US really needs:  a better President, and better journalists.

  5. I am not singling you out Le_o, just utilizing your figure of $33 billion.
    A brand new office in the CIA received $50 billion for this years funding. The USA spend 100 times that $33 billion every year just spying on their own citizens, and thousands times that figure annually on duplicated intelligence agencies. Maybe it is time for them to pull their heads in a little and start paying attention to their own country and it’s people.

  6. Hmm, who is this “Obama Bin Laden” you speak of?

Sign in to comment.