The deal to trim the federal deficit by more than $2 trillion and increase the government’s borrowing limit contains no guarantee that tax increases will be part of the equation.
After weeks of presidential demands for sacrifice by corporate jet owners and hedge-fund managers, those taxpayers and others can rest easy — at least for now.
Liberals were furious as the terms of the agreement came into focus Sunday, and yet another capitulation by Obama on economic policy threatened to further dampen enthusiasm among the core Democratic voters he will need to win reelection next year.
But for a White House eager to improve its standing with centrist independents who have been fleeing Obama, even a losing deal can be a winning strategy.
Most important for the president, the agreement struck Sunday averted a government default — an outcome that probably would have hurt the U.S. economy and added to voters’ frustrations with Obama’s leadership.
The deal also allows the president to avoid another politically painful fight over lifting the debt ceiling before the 2012 election, with Republicans giving up their insistence on a second vote before then.
And Obama, branded a socialist by many Republicans for his big-spending stimulus program and his health-care overhaul, can declare himself a deficit hawk as he courts the political middle.
As he put it in remarks late Sunday praising the agreement, the result of his negotiations would be “the lowest level of annual domestic spending since Dwight Eisenhower was president.”
An administration official told reporters later that “it’s important to show the American people we are serious about deficit reduction.”
Even an apparent capitulation by Obama helps present him to voters as a reasonable compromiser doing battle against rigid ideologues, his aides say.
“In the short term, everyone suffers politically,” Obama campaign strategist David Axelrod said in a recent interview. “In the long term, I think the Republicans have done terrible damage to their brand. Because now they’re thoroughly defined by their most strident voices.”
Obama and his aides insisted Sunday that the president has not given up his fight on taxes.
The creation in the agreement of a bipartisan committee that will recommend the bulk of the deficit reduction later this year gives the president more chances to apply public pressure for tax increases on the wealthy.
Obama will take his case to the public, perhaps even harnessing his reelection campaign apparatus to target lawmakers, as he began doing this past week via Twitter. A July Washington Post-ABC News poll found that most Americans, including most Republicans, support some tax increases to reduce the deficit and oppose cutting programs such as Medicaid and Medicare.