What deal will mean for Obama

WASHINGTON -- It was President Barack Obama's bottom line, a position he repeated in every recent public utterance on his debt-ceiling talks with Congress: Any deal must be "balanced" with spending cuts and tax increases.

But in his eleventh-hour staredown with the tea-party-infused Republicans and a possible government default on the line, Obama blinked.

The apparent deal to trim the deficit by more than $2 trillion and increase the government's borrowing limit contains no guarantee that tax increases will be part of the equation. After weeks of presidential demands for sacrifice by corporate jet owners and hedge-fund managers, those taxpayers -- and everyone else -- can rest easy.

That is, unless Obama escalates his push for tax hikes on the rich, as the White House signaled Sunday he would do.

Nonetheless, liberals were furious as the terms of the agreement came into focus Sunday, and yet another capitulation by Obama on economic policy threatened to further dampen enthusiasm among the core Democratic voters he will need to win re-election next year.

But, for a White House eager to improve its standing with centrist independents who have been fleeing Obama, even a losing deal can be a winning strategy.

Most importantly for Obama, the agreement that was being finalized late Sunday appeared on track to avert a government default. Such an outcome would almost certainly have further weakened the economy and added to the growing frustration among many voters about how Obama is handling it.

A default would also have opened him to criticism from Republicans and others that he was a weak leader.

The deal also allows Obama to avoid another politically painful fight over lifting the debt ceiling before his 2012 re-election, with Republicans giving up their insistence on a second vote before then.

And the president, branded a socialist by many Republicans for his big-spending stimulus program and his health-care overhaul, can suddenly declare himself a deficit hawk as he courts the political middle.

Even an apparent capitulation by Obama helps present him to voters as a reasonable compromiser doing battle against rigid ideologues, his aides believe.

"In the short term, everyone suffers politically," said Obama campaign strategist David Axelrod in a recent interview. "In the long term, I think the Republicans have done terrible damage to their brand. Because now they're thoroughly defined by their most strident voices."

Look for Obama to take his case to the public, perhaps even harnessing his re-election campaign apparatus to target lawmakers, as he began doing this past week via Twitter.

A July Washington Post-ABC poll found that most Americans, including most Republicans, support some tax increases to reduce the deficit and oppose cutting programs such as Medicaid and Medicare.