There are two types of Progressives right now, those who are focused on the day-to-day pragmatics of politics–let's call them pragmatic Progressives–and those who are concerned about long-term systemic trends–Let's call them structural Progressives.
Structural Progressives worry about the long-term destabilizing effect of wealth being distributed upward the way it has been over the last 30 years. The structural group is big picture, and "symbolic" victories matter to them if they are understood as wins in the longer-term war that is being fought for the soul of the country.
If you don't think that the aggregation of wealth and the power that comes with it in the hands of so few is a problem for a democratic republic, you're probably fine with the Obama deal. Long-term trends don't matter that much to you–you're more concerned with making it to next week or to the next election cycle. Or you're oblivious of or incredulous that America is evolving into a stratified, Brazil-like oligarchical society. Sure, you're concerned about wealth stratification, but not that concerned. You've got other things to worry about.
The pragmatic progressives, and Obama is one of them, are, therefore, small picture, play-the-cards-you're dealt, get done what you can, and all that matters is getting the best deal in the short run. History will take care of the big picture. They focus on what's possible in the given political reality, and accept as a victory whatever progressive gains they can obtain given the hard political realities. They tend to look at structural issues as "symbolic" and impractical. There is for them no "war"; there is only the day-to-day skirmishing, and at the end of it, after one term or two, history will judge whether a presidency was net gain or net loss, success or failure.
The structural group cannot accept short-term victories if they undermine obtaining the objectives of the longer-term war. This tax deal undermines those long-term objectives in three fundamental ways:
First, it reinforces the basic principle fought for both symbolically and in practical terms by the GOP that the tax code is not a tool for wealth distribution. It will be harder, not easier, to get these tax cuts removed two years from now. That's why the Republicans are so happy about this.
Second, it let's the GOP get away with winning these irresponsible, deficit expanding, unpaid-for tax breaks for the wealthiest without paying a political price. We're at a critical point in the electorate's perception about who to side with–the Dems or the GOP, and this is a critical battle to make clear to the public that the GOP is not on their side. Obama, already widely perceived as an agent of Wall Street, reinforces that perception.
And third, by agreeing to these unpaid for tax breaks for the wealthy, Obama colludes with the Grover Norquist wing of the GOP, which wants to cripple the government's long-term ability to do anything by insuring that it cannot afford it. That's why the GOP started two unpaid-for wars and viciously pushed for its unpaid-for Medicare D, in addition to its unpaid-for tax cuts. Whatever the short-term tactical reasons for for these GOP policies (e.g., enriching cronies), they also serve the long-term strategic goal, which is to cripple the long-term capability of the government. They want to insure that whenever Dems come into power that this mantra will fill the media echo chambers: "We can't afford to pay for Dem progressive programs."
So, from where I stand, whatever short-term tactical gains Obama gets from this deal, they are dwarfed by the long-term strategic losses. If you were to ask me whether we should let taxes go up for everyone in January, I'd say yes. Force the Republicans to pay the price. Force them to vote against a tax cut for the non-rich in the new term. I know it's complicated administratively, but some hassles are worth it if you take the long-term issues as something more than "symbolic", something worth fighting for and paying a price for.
And there's a good chance the GOP would have caved before 12/31 anyway. If GOP leadership knew they were dealing with a tough negotiator willing to go the mat on principle, and that they will have to pay a political price for opposing him, why do we assume that they won't cave?
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