Bush Tax Cuts Teach Obama Administration a Lesson About Politics

In 2001 and 2003, Congress passed controversial tax cuts, now known as the “Bush-Era Tax Cuts.”i In 2008, Obama ran for president and said he would end the tax cuts for households that make over $250,000 a year. And two weeks ago, he announced a dealii with Congressional Republicans that would extend those now infamous tax cuts for two more years—including those for high-income families.

Many Democratic Congressmen weren’t happy, and the President received a lot of negative media coverageiii for caving in to the Republicans. In his defense, Obama did work a 13-month expansion of unemployment benefits and what he described as “key tax cuts for working families” into the deal. He also acknowledged that he was going back on campaign promises, and that he didn’t actually agree with the Republicans who want to “make permanent the tax cuts for the wealthiest 2% of Americans.”

Speaking from the White House, Obama tried to play the part of a martyr, forced to sacrifice his beliefs and campaign promises for the sake of Americans. Describing the deal in the simplest possible terms, he boiled it down to this: if he hadn’t given in to Republican demands, they would have blocked tax cuts for all Americans, including the low-income households and middle-class families who need it the most.

“That would be a chilling prospect for the American people,” Obama said. “I am not willing to let that happen.”

Though most Democrats continued to express anger and frustration with the President—many threatened to vote against the deal—the tax cuts have since been passed by Congress, and even won the majority of votes in both parties. But the lesson learned is clear. In response to his own party voicing discontent with the decision, Obama gave another news conference where he explained the deal further and, rather emotionally, defended his decision.

If people refuse to compromise, Obama said, “People will have the satisfaction of having a purist position and no victories for the American people. And we will be able to feel good about ourselves and sanctimonious about how pure our intentions are and how tough we are, and in the meantime, the American people are still seeing themselves not able to get health insurance because of pre-existing condition, or not being able to pay their bills because their unemployment insurance ran out.”

Obama thus defended deal-making in Washington, which, two years ago, he promised to end. Between that and the extension of the Bush Tax Cuts, it does seem like the President has fallen back on a lot of his campaign promises. But those promises were never very feasible. Wanting to change “politics as usual” is admirable, but the fact is that deal-making is deeply embedded in our government. No one party is ever going to win, and no one is ever going to be happy. Politics is all about compromise.