Why President Obama took the fiscal cliff deal

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Some liberals were disappointed with the agreement President Obama accepted to avoid the fiscal cliff, which included dropping his pledge to raise taxes on all income above $250,000 and not including a provision to raise the debt ceiling, giving the GOP a chance to start another fiscal crisis in less than ten weeks.

But the actual details of this agreement were almost entirely in the president’s favor. Moving off of his desired numbers on taxes allowed the president to get billions of dollars in programs for the working poor and unemployed Americans that Republicans would only agree to as part of a larger compromise. The deal includes $30 billion to help Americans who have been unemployed for longer than six months, as well about $120 billion spread over five years  to keep in place increased child tax credits for low-income families with children and those paying for college that were in the 2009 stimulus and scheduled to expire.

While cuts may come later, there are actually almost no new spending reductions in this agreement. (The cuts from the 2011 debt ceiling negotiation will still eventually occur.) Obama successfully fought a Republican push to include Medicare or Social Security reductions in this deal.

Most importantly, almost every Republican senator and more than a third of House Republicans voted to raise taxes. Yes, Obama has proposed this years, but Republicans have opposed any increase on anyone for two decades. Obama not only forced them to take a tax increase now, but is promising more during the rest of his tenure to balance the national budget.

And for both everyday Americans and Obama, “going off the cliff” for days or weeks would not have been ideal. If no agreement had been reached, tax rates would have went up immediately, taking away funds from people who live paycheck to paycheck. (And the difference would have been noticable, as a payroll tax cut from the last two years has already been eliminated) And no president can govern in the midst of a Wall Street meltdown, as could have happened if no agreement was reached.

“Look, there are a lot of conservatives in the Republican caucus in the House who hate the bill for good reason. This is a complete surrender on everything,” conservative columnist Charles Krauthammer declared on Fox News, as Politico reported.

To be sure, this is far from a perfect agreement for the White House. It sets up another fiscal battle, likely less than two months away, on the federal debt ceiling. Republicans are planning to use that one, as they did in 2011, to push for major spending cuts. And Obama won’t have the leverage he had in this debate, when he could threaten a massive tax hike would happen if Congress did nothing.

More broadly, this perpetual cycle of fiscal battles is a major challenge for the administration. The White House wants to use the State of the Union to make a major push on immigration reform, as well as try to advocate for gun control laws while the public is still focused on the issue in the wake of the school shooting in Newtown, Connecticut. Traditionally, the president can deliver a series of speeches on an issue and help focus and perhaps even persuade the public to back his ideas. But that’s extremely hard to do in a environment with countdown clocks warning of the latest budget calamity.

The deal also keeps in place a long-term budget fallacy: the federal budget can be balanced simply by reducing spending and raising taxes on the wealthy. This deal locks into place historically low tax rates for most Americans , who will eventually either pay more or accept fewer government services over the long-term.

But in the short term, this is a major accomplishment for Obama. More than anything else in his 2012 campaign, he ran on a pledge to reset Washington’s budget-making process to include the consideration of major tax increases. Less than two months after winning re-election, he succeeded.

Follow Perry Bacon Jr. on Twitter at @perrybaconjr