This has left him with one economic approach: Raise taxes as much as possible, shift the burden to those he doesn't care about, and do as little as possible to slow spending growth, buying time until he can raise taxes again.
Downside to approach
Some conservatives are convinced that this is the full emergence of Obama's democratic socialism. This explanation is not required. Obama probably still views himself as a pragmatist. He may comfort himself that he will take incremental action on Medicare in due time. But at this moment three factors overlap: his liberal policy instincts, a political opportunity to break his opponents, and the massively inflated self-confidence produced by re-election. So, force the GOP to surrender on the debt limit, with nothing in return. Require Republicans to accept new taxes in exchange for any real spending reductions. If they agree, their caucus is fractured (again). And if they refuse, paint them as obstructionists and extremists who are willing to destroy the economy/the nation's credit rating/the military for their own ideological purposes.
There is one main downside of this approach. It delays any serious action on long-term debt for at least another two (and probably four) years. It is the path of a government that moves from fiscal crisis to crisis, gradually undermining global confidence that it can manage its own affairs. An economy in which uncertainty, slow growth and high employment become norms. A federal budget increasingly devoted to entitlements at the expense of other purposes, including defense.
Obama's short-term political calculations are understandable. It is the cost to posterity that is unreasonable.
WASHINGTON POST WRITERS GROUP