The President’s instincts are to confront the Republicans, not to compromise. He has begun to talk the talk, but he has yet to walk the walk. He may try the same strategy with the Bush tax cuts. If so, the Republicans will push back and the final deal may be a temporary extension of the cuts, delaying the ultimate showdown.
The Republicans believe that the issue is a public opinion winner for them. Obama’s advisers seem to think that they will benefit from the “tax the rich” argument. In the past, that argument has had limited success. The White House may be calculating that the financial stress faced by middle income families will change the equation enough to force the GOP to accept Obama’s plan. That would be a big victory for Obama and precedent for other “progressive” tax, welfare and spending policies that the White House wants to push in the next two years. Obama wants to campaign as the president who stood up for the “little guy” while the Republicans lined up to support “the rich.”
Everything is on the line in a lame-duck session. The shape of the coming debate may become more important than the revenue or tax policy arguments because that debate may define the 2012 campaign.