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Rothenberg: Obama Wins First Round, With More Bouts to Come in 2013

We’ve just seen Round One in what amounts to a political heavyweight championship fight between Democrats and Republicans. Get ready for the next 11 rounds.

Though they were unhappy with a package that included more spending and higher taxes on the wealthy, Republican realists understood that defending tax cuts for millionaires is never an ideal strategy.

Democrats had successfully maneuvered them into a corner, pounding them with blows to the solar plexus and even an uppercut or two. Battered and bloodied — with a job approval rating in the teens — savvy congressional Republicans figured that it was time to accept the loss of a round in the hope of making up ground later in the fight.

They know that over the next year or two the match will continue, over the now-delayed sequester cuts, the debt ceiling, entitlement spending, tax reform and, yes, more taxes.

Round One was not pretty. But politics isn’t about aesthetics, and our system of checks and balances, combined with a more polarized nation, makes compromise more difficult.

Yes, President Barack Obama won the election, as Democrats remind all of us repeatedly in demanding more compromise from Republicans. But House Republicans also won their elections, and that is the real reason our elected officials had such a hard time agreeing on how to avert the fiscal cliff.

While it is easy to complain about gridlock in the nation’s capital and bemoan the inability of Congress to compromise on taxes, spending, unemployment insurance, the farm bill and other matters, it’s important to remember that Congress’ job isn’t merely to pass legislation. It is to pass good legislation, or at least legislation that the individual member and his or her constituents think is worthwhile.

To many conservatives, raising taxes on anyone and failing to address the nation’s growing debt and entitlement problems are at least equally dangerous outcomes (maybe even worse than going over the fiscal cliff) that will take the country one step closer to the kind of economic crisis that Greece and other countries in Europe face. For these conservatives, their opposition to the deal wasn’t merely “selfishness” or “partisanship,” criticisms often leveled at Congress for its inaction. It was based on principle, on members of Congress doing what they believed was the right thing for the country and for their constituents.

Still, conservatives ought to be happy that almost all of the Bush tax cuts were made permanent, that the estate tax was adjusted and that there was a compromise on capital gains — and more importantly that they didn’t get knocked out by Democrats before the bell at the end of Round One.

Obama continues to be well-positioned for the next few rounds. His job approval remains good, the fiscal cliff deal may provide a short-term boost to the stock market, and the GOP’s brand is still terrible.

Just as important, the president has found the sweet spot in American politics when he talks about compromise. That’s probably why his remarks from the White House on Dec. 28 were so odd. Instead of sounding conciliatory, the president gloated the way Muhammad Ali would have, prancing around the ring and taunting his opponent. He even threatened congressional Republicans if they sought a rematch.

It was a silly thing to do, and it served as a reminder that though he is a great campaigner, Obama doesn’t entirely understand how to use all of the assets at his disposal as president.

So Democrats won the first round, on points. The problem is that politics is about results. The president will look good if the economy improves and Americans give him and his party credit for prosperity. But slow growth and weak employment numbers (or higher inflation and growing debt) will make him appear ineffectual and, even worse, unsuccessful.

Republicans want Round Two of the fight to be about spending and entitlements, and they will have their opportunity. After watching Congress and the president “raise taxes” on the wealthy and spend more on the unemployed, voters are likely to turn their attention to other matters, including the long-term economic health of the country. That’s the way voters are.

“Washington missed this magic moment to do something big to reduce the deficit, reform our tax code, and fix our entitlement programs,” said Democrat Erskine Bowles and former GOP Sen. Alan K. Simpson of Wyoming in a joint statement after the fiscal cliff agreement was passed.

“The fiscal cliff was a significant missed opportunity to put the nation on a sustainable fiscal path,” echoed Michael Peterson, president of the Peter G. Peterson Foundation.

Expect Round Two to be just as hard-fought as Round One. It may even make Round One look like a garden party.

Stuart Rothenberg (@stupolitics) is editor of the Rothenberg Political Report (

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