This diary is in keeping with the "Obama isn't an idiot, he just simply disagrees with you" theme.
So, what on earth was Obama thinking in agreeing to this plan? He is thinking that he got the Repubs to agree to vote for a $200-300 billon (admittedly jury-rigged) on-going stimulus for the economy. He is saying "to hell with the deficit, to hell with ideological principle," I want the best politically possible outcome for the economy over the next two years. In the face of the catfood commission nonsense, this plan maxes out the politically possible short-run deficit increase. In the face of claims that further fiscal stimulus was politically dead, dead (and also dead), Obama has a moderately-sized, immoderately-ugly, stimulus deal in hand.
Obama got an unemployment extension that helps millions and that, absent a deal, the Repubs would have blocked. He got a 2% payroll tax cut that puts 2% of wages back in the pocket of every working American who makes less than the Social Security "max".
Meanwhile, he is making clear that the unpopular cuts for the rich are there only because of the Repubs. He isn't playing the "oh, that's what I really wanted after all" game that he played with the original stimulus.
Importantly, the tax cuts for the rich are extended for only two years, which means he has to run against them in 2012. A three-year deal (which many Dems preferred to take taxes off of the election table) was turned down.
Mitch McConnell is under attack from the right because he didn't get a permanent extension. But he explains that the President would not sign a permanent extension, so they had no choice. The President drew a line in sand at the permanent extension and the Repubs caved on that, as well as the other middle class tax cuts that they really don't like.
Now, yes, I understand that you and nearly everyone else on this site would have drawn the line in the sand much earlier. From an economic point of view I wish so too, though I am much less certain about the politics of it. "Moderate" Dems would have sold out the President over the issue of tax increases during a recession and Obama would be painted in a "bipartisan" way as harming the economic recovery. All the anti-Keynesian rhetoric would disappear for a moment as Obama was accused, by members of both parties, of harming the recovery.
Now, maybe you are right and he could have politically won that battle. I am not trying to convince you otherwise.
But notice that moderate left of center wonks like Ezra Klein (linked above) think the agreement is "an imperfect, but not-that-bad, deal." Again, I am not stupid enough to try to convince you of that.
But I do think this is what Obama is thinking. He isn't stupid, he just isn't (at least in practice) as liberal as you. He is a liberal, though: he is looking for the largest possible economic stimulus that he thinks he can win with some certainty and he fought to get it as focused on the unemployed and middle class as he thought he could. The Repubs insisted on tax cuts for the rich and he insisted on assistance for the unemployed and middle class, going beyond the Bush cuts. And yes, he is willing to sell out principles that you hold dear to get there, so he is surely less progressive than you.
He thinks he is helping millions of suffering Americans, at a somewhat ugly price. You disagree that the trade-off is worth it. He thinks you are putting the perfect over the good, and says so, driving you nuts. You think he could have bargained for a better deal and that in the end it would have been better politics too.
I would like to agree with you as well, though I am not as sure that the politics actually work in the real world, once the "moderate" Dems get their evil mojo going.
You will educate me otherwise in the comments. But maybe you can concede that Obama was thinking something non-crazy, just not what you think.