With the administration's new bank tax pledge coming in for criticism for not being agressive enough, it's important to remember the politics; as the Times puts it today, "Political analysts expect the bank tax to pass easily in the House but face resistance in the Senate." Surprise!Ignoring the populist spin, the administration's argument about this tax is that it will fulfill their statutory mandate to recover TARP costs ahead of schedule, and perhaps more important, it is a bill that can pass the Senate. Offering a compromise right out the gate has become a signature of the administration; while much has been made of this CQ study that shows President Obama had more success pushing his agenda through the legislature than even the legendary Lyndon Johnson, the data reflects the administration's willingness to tailor its proposals to the mores of the Democratic majority rather than its ability to push the Democratic majority in new directions.
Throughout the year, Obama has yet to suffer any real legislative defeats because of his willingness to compromise; that's why we got a good stimulus bill but not an ideal one, and why we're, fingers crossed, going to get a good health care bill but not an ideal one. Perversely, this success has raised questions on the left about the administration's willingness to push hard -- if we could go this far on health care, why couldn't we get a public option in the bill? It's difficult for either side to prove the counterfactual: That if pushed, Congress could produce a public option and a better bank tax, or, on the other hand, if pushed, Congress would blow up the whole process.
Given the disenchantment, perhaps the White House would be better served by an honest loss. Pick something big -- maybe opposing Chris Dodd's insane idea of bargaining away the Consumer Financial Protection Agency (right now Treasury officials refuse to comment on the matter) -- make it a dealbreaker and, if it comes down to it, take the honest loss. It's easier to sell your base on the Senate's intransigence in matters progressive if it's completely clear that the Senate is muffed the job. No doubt some critics won't be swayed even by that kind of demonstration, but others might give greater credibility for a future compromise. Even better, of course, is that perhaps the administration's political calculus is wrong and progressives can win in the Senate. I wouldn't bet on it, though.
-- Tim Fernholz
Above: Obama meets with the Senate Democratic Caucus.
