President Obama, facing the quintessential political Sophie’s Choice, has reached a “compromise” with the Republicans on the extension of the Bush-era tax cuts. He has essentially caved to all their demands, and is putting forth a proposal that includes extension of not only the liberals’ coveted class-warfare “middle-class tax cuts,” but also extension of the lower top-tier tax rate for highest 2% of the earners, or as liberals refer to them, “Tax cuts for millionaires and billionaires.”

Of course, what Democrats either don’t understand or refuse to admit are that the top earners already pay the vast majority of the income taxes in this country and that this top 2% earning bloc actually represents something like a third of the discretionary consumer spending in the economy. When billionaire John Kerry buys yet another vacation mansion, who do Democrats think hires the workers who build it? Supplies the materials? Runs the wiring? Installs the heating/AC? Paves the driveway? Plants the shrubs? (Ok, forget that last one…..) This can be explained by an advanced theory known as “How an economy works.” When people buy stuff, other people have to work to make it happen. If you reduce buying power, you reduce economic activity. Not too hard a concept to grasp.

Apparently, President Obama has had an epiphany of sorts and just realized that the general electorate would not take kindly to seeing their $750/wk paycheck reduced to $655.

Actually, that’s not the case at all. He had an epiphany that it would be politically disastrous to have a decrease in buying power pinned on him directly by an angry workforce who would hold him personally accountable. So his personal philosophical tenets went right out the window and for the sole purpose of political expediency, tax cuts—for all Americans, at all income levels—are now his friend. Loved ‘em all along. All that talk during the 2008 campaign about “rolling back the Bush tax cuts on the wealthiest Americans” well, that was just a ‘nod-nod, wink-wink’ little joke between us friends. He was never actually serious or anything. He just had to say it at the time, you know, because.

Now he even has Vice-President Biden and his top economic advisors out on the stump touting the great growth that the continuation of the Bush-era tax cuts will promote in 2011, how the economy will expand by 3.5-4% or better, and how unemployment will finally shrink as businesses spend and expand, comfortable and confident in this new era of fiscal certainty.

Capital gains taxes are slated to remain at or near their current levels and the estate (“Death”) tax, which was to have leapt in 2011 from 0% on the entire estate to 55% after the first million dollars of an estate, will be held to 35% after the first $5 million, zero before that.

This was all pretty good news to taxpayers, businesses, investors, and Republican politicians. There was just one little glitch: President Obama is such a rookie, so unsophisticated and inept in his dealing, so narcissistic in his unwavering opinion of his own correctness, that he failed to do what any 15-year-old running for Sophomore Class President knows: Secure your base of support FIRST. Make sure your supposed “allies” are with you, are on board, before you venture out to persuade the other side.

Now Pelosi, Reid, Hoyer and a whole host of Democrats are now crying “Foul!” and saying they were blindsided by Obama’s tax plan announcement, and that they won’t go along. So President Obama finds himself in the surreal position of trying to sell the Republicans’ position of lower tax benefits to his own base in order to save himself from catastrophe.

And if the bill doesn’t get done by the end of 2010? First, there will likely be a late December 2010 stock market sell-off of massive proportions, as investors try to lock in profits under the current lower capital gains laws. Estimates are that the market could easily lose 10% of its value and enter 2011 barely above 10,000. Shattered 401ks would once again be the order of the day, and consumer sentiment would be ruined.

Then the Boehner-led Republicans would introduce the corrective bill and it would pass, leaving the indelible—and correct—impression in voters’ minds that only Republicans are serious about keeping taxes low.

A procedural neophyte he may be, but President Obama does not want the Republicans to gain the credit for solving this tax debacle in 2011. Therefore, for the next week or two, “Johnny” Boehner and “Mitchy-boy” McConnell are now Barry’s bestest-bestest friends.