The hidden cave in to Republicans,and perhaps the most far reaching in consequences, is Obama's surrender to Republican ideology; tax cuts as the cure all for all that ails us. With the nation in the grips of economic crisis, the predominate implicit message of the proposed tax cut deal is "get the government out of the way." The overt effect of a slew of across the board tax cuts in response to economic threats, including granting hundreds of billions of tax cuts to those who do not need them, is a concession that henceforth the road to increased prosperity must run through private property. No more Federal mass investments in job creating infrastructure, no major federal public works projects, and no direct government programs to directly employ the unemployed for socially productive ends. Not to mention no more federal cash grants to struggling state and local governments, to prevent the layoffs of or pay for the hiring of more teachers, fire fighters, and cops. Where will the money come from for high speed rail, or for revamping our energy technologies to compete with government subsidized industries in Europe and China?
Under Republican ideology, that is "our" money the federal government wants to allocate to help tax payers and the economy, and "the feds" shouldn't have more than a bare bones minimum of it in the first place. Give cash back to the tax payers, shrink the federal footprint, and then the private sector will take care of the economy and us.
The compromise tax proposal redirects the federal role during economic downturns toward that of "give the people back their money" in the belief that "we" will use it more wisely than government ever could. And by directly massively cutting government revenues, two things by necessity would follow. One, the federal deficit will grow by almost another trillion dollars within two years, and two the pressure on the government to sharply curtail spending and eliminate so called individual"entitlement" programs will ramp up significantly. That pressure will come from Republicans no doubt, but sooner or later it might also come from this nation's "creditors" as in China for an obvious example. As the consumer market in places like India and Brazil continues to swell, China will become less dependent on the American consumer to buy it's products, and their need for us to stay "solvent" will begin to shrink.
We have already seen, before this latest "compromise proposal" a government controlled by Democratic majorities in both houses and by a Democratic White House that became intimidated against introducing any new measures to help our economy that could be described as increased federal spending. And that is before we add another trillion dollars of red ink to the deficit through further tax cuts. Government is being strangled of its life blood, revenues, and that begets a viscous spiral. As government on all levels become increasingly cash poor, current government services, let alone any new ones, will deteriorate. And as government services deteriorate, the screams to privatize them will become louder. This is the slippery path we are now descending. And the U.S. infrastructure continues to crumble while other nations race ahead of us in the 21st century.