William Katz:  Urgent Agenda

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WITH EYES ON 2012 – AT 9:27 A.M. ET:  You can be sure that every initiative taken by this president will be launched with an eye on 2012.  That's pretty normal politics for any president.  And there is a chance that Obama will maneuver to the center, making clear to his leftist base that a new day has dawned, and that he must do what a politician must do.

Obama has a major meeting with Bill Clinton coming up, and they won't simply be comparing Christmas recipes.  Clinton maneuvered to starboard after he took an Obama-style shellacking in the 1994 congressional midterms.  He went on to win easy reelection in 1996. 

Obama is already moving to make taxes his issue, rather than ceding it to the GOP, as The Wall Street Journal reports:

President Barack Obama has instructed his economic team to draft options to close loopholes and lower income-tax rates ahead of what would be a multi-year effort to overhaul and simplify the U.S. tax code, administration officials said Thursday.

Lowering corporate tax rates could give the administration the opportunity to build an alliance with business leaders, though it would likely depend on which tax breaks officials propose to eliminate.

White House aides cautioned that the effort was in its infancy. But in the wake of last week's report from his presidential deficit commission, a broad tax overhaul has been pushed toward the front of the discussion as members of both parties try to find a way to bring down the $1.3 trillion budget deficit with minimal pain.

"The president has long said that reforming the tax system is a priority, and the bipartisan fiscal commission recently made recommendations that he will consider as part of the budget process," said White House Deputy Communications Director Jen Psaki. "But he is not considering specific policy proposals, and no decisions have been made about whether this is a priority he will push for in the near future."

The debt commission proposed ending certain tax breaks, known as tax expenditures, that allow many corporations and individuals to minimize their tax burdens. By attacking such loopholes, the commission concluded tax rates could be lowered while still bringing in more revenue to the Treasury.

COMMENT:  There are disturbing reports that some incoming Republican congressmen are rushing to abandon their campaign pledges and returning to the old earmark system of filling money bills with special-interest favors.  And Republicans, if only temporarily, blocked federal aid to 9-11 workers sickened by conditions at the attack sites as they worked to clear the rubble.  While these funds will probably be released, the headlines did the GOP's image no good as it worked to insure continuation of the Bush tax cuts for the very comfortable.

Obama's move toward possible reform of the tax system may be very shrewd.  Historically, Republicans have been monumentally inept in explaining some of their domestic positions, especially as regards taxes and assisting people in need.  It is one of the reasons why polls showed that, while the Democrats were defeated last month, the Republicans were hardly embraced.  The party has a poor image, a greedy image, whether deserved or not.  If Obama can exploit that image by proposing popular changes in the tax system, he can pin the GOP to the wall. 

Do not count Obama out in 2012.  His fight with his own base over the tax compromise with Republicans will probably help him with the broad center of American politics.  And where would his base go for a presidential candidate on election day, 2012?  Lenin is dead and the head of Wikileaks is in prison.  Both are unavailable and poorly funded.

And blacks, for understandable reasons of group solidarity, will back Obama in 2012 even if he tries to switch the national anthem to "Dixie."  Although I doubt if he will. 

Charles Krauthammer believes that Obama won a great victory in his tax negotiations with Republicans, because what emerged is really a new stimulus plan that he couldn't get through the newly elected Congress if he called it that.  While the blurry-brained left may not realize that Obama did quite well in his talks with the GOP, the president himself will know how to claim the credit.

No, don't count him out.

December 10, 2010