For a long time, President Obama (or Candidate Obama) wanted to let the soon-to-expire Bush tax cuts for the wealthy (a.k.a. families making over $250,000 a year and individuals making over $200,000 a year) die a natural death, while extending them permanently for those making less. But in his post-election press conference, 60 Minutes interview, and weekly YouTube address that nobody watches last week, Obama signaled a willingness to compromise with Republicans by extending the rich-people tax cuts at least temporarily. And Robert Gibbs even went so far as to suggest last week that they'd be open to extending all the tax cuts on a one- or two-year basis, including those for people making less than $250,000.
That's pretty close to an optimal position for the GOP they didn't want to "decouple" the taxes, because then they'd have to vote on extending "rich-people tax cuts" by themselves at some point so if you consider such a compromise "caving," then that's when the caving happened, not despite the reaction of the Internet today in David Axelrod's interview with the Huffington Post last night, in which he seemed to merely reiterate the same position. Indeed, with the liberal blogosphere throwing a fit over the Huffington Post interview, Axelrod has released this statement:
There is not one bit of news here. I simply re-stated what POTUS and Robert have been saying. Our two strong principles are that we need to extend the tax cuts for the middle class, but we can't afford a permanent extension of the tax cuts for the wealthy.
Many of Obama's supporters would like to see him fight for and defend his original position permanent cuts for people making less than $200,000, no extension for those making more. But Obama has always preferred pragmatic compromise to principled political fights that may or may not end successfully for him. He wants to get things done, even if he has to make concessions, and in this case, the thing he wants to get done is making sure the middle-class tax cuts don't expire at the end of the year. His supporters should probably start getting used to this sort of thing.
UPDATE: White House denies giving in on Bush tax cuts: [Plum Line/WP]
White House Gives In On Bush Tax Cuts [HuffPo]