1) From my liberal standpoint, the worst part of the deal is our ideological opposition to lower tax rates on the wealthy at a time when America needs to be as fiscally responsible as possible without damaging the economy. However, the tax rates are only extended for two years (not five or ten) at a cost of about $160 billion (including the lower estate tax rate), and in return, we got a host of needed middle class tax cuts, funding for unemployment insurance for a full year, hopefully avoided deadlock on the New START treaty and Don't Ask Don't Tell repeal, and a major symbolic compromise with Republicans to follow up the disastrous midterms, giving moderates (if not liberals) a little more confidence in government, and in Obama.
2) Additionally, three other potential benefits of this deal: 1) the tax cuts for the wealthy are estimated to help create jobs to some degree, just not as high a degree as other stimulative measures would, including the unemployment insurance that is part of this deal. 2) Obama has disarmed the potentially effective Republican talking point that the recovery was not as robust as it could have been because Obama raised taxes. 3) The two year extension of the tax cuts for the wealthy ensures the tax rate for the wealthiest Americans will be an issue during the next election, just as it was heavily debated in 2008 - and look who won that argument.
3) Down side - for the next two years, the richest Americans, who have more money in a society facing a greater class divide than ever before, will not be paying their fair share to our country at a time when our deficits are historically high and our economy is struggling to gain steam. The harm that comes with $160 billion over two years, however, in the grand scheme of things, is more in the form of psychological/ideological repugnance than actual long-term economic damage.
4) The alternative to this deal is NOT a better deal - other options likely would have been worse for the economy, psychologically abusive to the country, and politically damaging to the Democrats. This was (pathetically) the single most important item to Republicans in the last two years, and they were not about to let it go. Obama could have turned down any deal that extended tax cuts for the wealthiest people, which would have continued Republicans on the path of obstruction for the next two years and sent a message to the public that Obama is unwilling to compromise. The tax rates for the middle class may have expired, at least temporarily, if we couldn't get a vote to extend them, putting the country on a bit of a roller coaster ride in the middle of our fragile economic recovery, and START, DADT, and every other priority of the Democrats would have immediately gone by the wayside. With Republicans set to take the House come January 1, Democrats have very little leverage to work with and a limited time frame. Perhaps Obama ultimately could have gotten slightly more concessions from Republicans, but it is no sure thing, and it would have taken time and cost valuable capital better spent on other priorities, all for very little policy gain.
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