How the Republicans fleeced President Obama in tax-cut poker.
During his days as an Illinois state legislator, Barack Obama was a regular poker player. Based on recent evidence, I suspect he wasn't a very good one. In trying to negotiate a tax deal, he has made a series of amateur mistakes.
Betting timidly on a strong hand. It should have been obvious back in the fall that the Democrats were not going to get a better deal by keeping the game going until after the election. Yes, they were a few Senate votes shy of the 60 needed for a floor vote on a bill extending the Bush tax cuts only for those earning less than $250,000 a year. But after the election, they were surely going to be in a much weaker position, with Republicans ready either to assume control of both houses or to come much closer to that point. Before the election, Republicans were afraid of being forced to filibuster to block a vote on the issue and ostensibly willing to compromise. On Sept. 12, John Boehner told Bob Schieffer on Face the Nation that he'd vote for a bill only if faced with no other choice. That was the time for Obama to crack heads, rein in Democratic defectors, and cut the best deal he could with the GOP.
Letting the game clock work against him. Republicans, who knew they had reinforcements coming, were happy to keep dealing cards all night. They knew they'd come back with a bigger pile of chips after the midterm election. After that, the timing favored them even more decisively. Democrats weren't willing to let unemployment benefits or the lower rates for middle-class earners expire. Republicans were willing to take that risk, knowing that after January they'd have a real majority to restore lower rates. With every day that passed, Obama and the Democrats needed a deal more, while Republicans needed it less.
Telegraphing his hand. Oy, Ax, what were you thinking when you went on the Sunday shows right after the midterm and said that Obama wouldn't agree to "permanent" tax cuts for the wealthy? By saying that, David Axelrod may have thought he was drawing a line in the sand. Instead, he signaled that the president was prepared to accept a temporary extension of tax cuts for the wealthy. At that point, Republicans knew that the deal they couldn't get in September was now available. They would have to have been terrible players to settle for anything less than the two-year extension they got. So they demanded a further cut in the estate tax, too, and got it.
Letting tougher players bulldog him. "I think it's tempting not to negotiate with hostage-takers, unless the hostage gets harmed," Obama said in yesterday's press conference. "Then people will question the wisdom of that strategy. In this case, the hostage was the American people, and I was not willing to see them get harmed." If you want to lose consistently at poker, showing this kind of weakness is pretty good way to do it. The more your opponents see that you're unwilling to let something bad happen to you (or, in this case, to poor people and the economy as a whole), the easier it is for them to intimidate you into surrendering.
Folding a winning hand. Obama had a lot on his side in the tax-cut debate: the fairness argument, the deficit argument, populist outrage, and the legitimate case that Republicans were holding working people hostage so that millionaires could get a tax break. What did the GOP have going for it? Mainly the potential to confuse the issue so badly that middle-class people thought higher taxes for the rich would somehow apply to them. In his Springfield days, Obama was known as a conservative player who would only bet big on a decent hand. But if ever there was an opportunity for Obama to bluff, this was it. Republicans cutting off unemployment benefits and raising taxes on working people could have been another version of the government shutdown. He could have won big by simply saying no to a raw deal and putting the blame on the other side.
There's an old poker adage that if you don't see the mark at the table, you're it. Bad news, Mr. President. You're the mark.