Republicans believe increasing taxes is wrong. Wrong for their constituents, wrong for their donors, and wrong for the economy. Also, they "believe" that the deficit and national debt is the biggest problem, except for higher taxes, holding back the economy and preventing job growth. How many times have you heard, we don't have a revenue problem, we have a spending problem? Technically that incorrect but so what? Math, charts, and truth have nothing to do with Republicans slogans, policy, or dogma.
So, what can Obama do faced with Republican intransigence? A smart "politician" like Obama can fine a compromise that allows the Republicans to seemingly maintain their "principles" while achieving his goals of increasing revenue and reducing the deficits while ignoring unemployment. Obama cleverly offered the Republicans the opportunity to lower tax rates and eliminate deductions while increasing government revenue. This seems reasonable but the Republicans and the Tea Party have Grover Norquist that defines a tax increases as any change to the current tax code that increases government revenue. Ah, rock v. hard place.
This negotiating style is classic Obama. He picks a negotiating starting point that doesn't violate his opponents "values" then coerces his supporters to ignore their values for the greater good - COMPROMISE. Compromise can be defined as health care reform that leaves Medicare, Medicaid, and health care inflation as the largest percentage of future debt and deficits. Or financial reform that institutionalizes "Too Big To Fail". Every Obama policy decision neatly fits into the acceptable values of Republicans with a hint of Liberalism. The Stimulus was a third tax cuts, a third state aid, and a third "shovel ready" projects. Health care reform was modeled on a 1990's Heritage Foundation Republican plan. Afghanistan and Iraqi war policies are praised by Republican warmongers. GITMO remains open despite most Democrats hate its existence. The Patriot Act was extended without any Democratic opposition. US trade policy was written by corporate America (Walmart via Bill Clinton). Wall Street reform was a disgrace. The GWB tax cuts were extended, and instead of allowing them to expire in 2013, Obama suggest tax reform. The Obama presidency can be defined as Democratic governing within the limits of Republican dogma regardless of the result.
The problem is the problems are real, huge, and immediate. And Republican policies have failed. During an average recession, compromised tinkering at the edges is enough but we are in a Great Recession. And we need Great Recession level policies. If past is prologue, Obama is incapable of leading Great Recession level policies. It's impossible for him to even suggest any Progressive policies that aren't within Republican limits. Why suggest a policy that is politically impossible given the Republican's majorities in the House and Senate (Republicans have an effective 47 - 53 majority in the Senate)? Whether Obama is a weak Liberal or a Manchurian Republicans, the Democratic Party must nominate a Progressive that advocates Progressive policies and fights for them. Barack Obama doesn't have the necessary leadership tools to handle our current problems.
Monday's presidential address about the Standard & Poors downgrade was a prime example. S&P downgraded America's credit rating because the American political system is incapable of making big changes to solve our long term deficits. Rather than announcing bold new policies to revive the economy, spur job growth, and solve our long term structural problems, Obama suggested reducing our long term deficits by tinkering around the edges with modest tax reform and entitlement cuts. Whether S&P got the math right or not, they were proven right by Obama's failure of leadership and Democratic/Republican finger pointing. Would America be in its current state of decline if we had German anti-competitive anti-growth trade and labor policies, British socialist health care, French nuclear energy policy, or Japanese anti-interventionist foreign policy? Have no fear, there isn't a chance Obama will ever purpose any of those policies, they are outside the Republican dogma limits.