Obama Tax Cut Proposal Puts Romney In No-Win Situation


With the Bush tax cuts scheduled to expire at the end of the year, the debate surrounding the tax code has rarely been this fierce. Yet, any witness to President Obama’s statement delivered in the East Room on Monday might believe Congress has to overcome its differences in an effort to become an efficient body built on reason and compromise.

In this political atmosphere of partisanship and gridlock, the president displayed this refreshing belief in our legislative body by framing his call for Congress to extend the Bush tax cuts for people earning less than $250,000 a year in terms of compromise and reasonability:

"While I disagree on extending tax cuts for the wealthy, because we just can’t afford them, I recognize that not everybody agrees with me on this. On the other hand, we all say we agree that we should extend the tax cuts for 98 percent of the American people. Everybody says that. The Republicans say they don't want to raise taxes on the middle class. I don't want to raise taxes on the middle class. So we should all agree to extend the tax cuts for the middle class. Let's agree to do what we agree on. Right? That’s what compromise is all about."

This announcement was not just effective in achieving a public feeling of well-being. It happened to be an extremely strategic and politically savvy move in the midst of a presidential race.

President Obama clearly states the opposing stances he and his opponent, Mitt Romney, have taken on the issue. In doing so, Obama accomplishes two things. First, the President makes the important step to establish the differences between his and Romney’s platform. Second, he corners Romney while appearing to be the voice of reason.

In the eyes of the public, Romney faces two choices. First, he can reasonably agree to “compromise” with the president. On the other hand, he can refuse to answer Obama’s call for compromise and rationality. In doing so, he would reaffirm the futile nature of a gridlocked congress, expose himself as an elitist politician, and admit he would rather let “98 percent of Americans” and “97 percent of all small business owners” suffer than allow the potential of raising taxes on the wealthiest 2%. Romney’s hand has been forced.

However, as reasonable as President Obama appears, he is in no way compromising. If representatives favoring full extension of the Bush era-tax cuts agree to pass Obama’s terms, they have effectively given full concessions to the President and are left with no leverage to bring Obama back to into negotiations.

In addition, if Romney advocates for Obama’s proposal, he could lose valuable donors who might feel threatened by the absence of support for their economic demographic.

It is also interesting to note that Obama’s stance on the issue has not changed since 2008. He agreed to extend the Bush tax cuts temporarily in 2010, but at a December 7, 2010 press conference he vowed to fight any future extensions to high-end tax cuts.

This “compromise” also comes at a point when Romney’s high income donor base has come under fire which makes the timing of Obama’s address seem premeditated. Clearly, Obama, whether attempting to or not, has begun transforming the public perception of himself and his opponent.