Leading article: Mr Obama's depressing realpolitik

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The Independent Online

It marks a low point in the political cycle in the United States that Barack Obama has been forced to extend George Bush's tax cuts for the wealthiest 2 per cent of Americans which were due to expire at the end of the year. Mr Obama had been happy to extend the cuts for most Americans but had promised in his 2008 election campaign to scrap them for those earning more than $250,000 a year.

Last month's Congressional elections changed all that. The resurgent Republicans have demanded cuts for everyone and Mr Obama has had no option but to climb down. With the Republicans now controlling the Senate a new political era of compromise has dawned. In order to get extensions for benefits for the long-term unemployed, the President has had to concede more tax cuts for the rich. He is also to freeze the pay of federal workers.

Mr Obama could have said No – and blamed the resulting tax rises for everyone on Republican intransigence. That would have saved almost $4 trillion in lost revenue over the next decade. But the political cost would have been too high. Taxes would have increased by $3,000 for the typical family and that could have cost the economy a million jobs.

More than that, the President has to pick his fights. He needs Republican ratification in the Senate if the centrepiece of his foreign policy – the Strategic Arms Reduction Treaty – is to go ahead, cutting US and Russian deployed nuclear warheads by 30 per cent. He would also dearly like to get agreement on ending the US military's "don't ask, don't tell" ban on gay people serving openly in the armed forces – on which he has made significant progress – with the Pentagon recently conceding that a change would not adversely affect combat readiness. He may still even hope for progress on more realistic immigration laws and perhaps some moves to combat carbon emissions, though his cap-and-trade bill now seems doomed.

There is a realpolitik to all that. Still, it is depressing that he has had to make concessions to a group of politically-inconsistent deficit hawks lobbying for tax cuts for the rich. Their position is not hard to decode. It is a "reward the rich, hammer the poor" agenda of the most unattractive kind.