Here is Austan Goolsbee explaining the President's rationale for the tax cut deal. My comments are after the break.
More detail can be found here. He makes his case pretty well, subject to two assumptions. First, he assumes that the listener doesn't have higher expectations of what concessions the President could have extracted from the Republicans in exchange for his veto threat. My criticism in the last post was that he basically gave it away. I don't think the Administration helps itself by using "hostage" language -- no one wants to hear the White House describing itself as helpless.
Second, he assumes that the listener is incapable of properly assigning blame to the Republicans for taxes on incomes under $250,000 (or $1,000,000) going up in the counterfactual in which he doesn't cut this deal. He might have mentioned, for example, that Senate Republicans have already blocked these two sensible alternatives. Why is the image we have of the Senate now have to involve Bernie Sanders engaging in a filibuster (making smart and liberal use of Capital Gains and Games, by the way)? Why couldn't the Democrats have arranged this so that they were united and it was the Republicans who were seen as obstructing the legislation? This is just poor political tactics.
Naturally, I would like to know from Austan or the White House why, when they choose to give stuff away in these stimulus bills, they don't include provisions to pay for the spending during the subsequent economic recovery or why they focus on private investment -- which has been quite insenstive to the current low cost environment that already exists -- rather than public investment, which can capitalize on that low cost environment to repair and modernize infrastructure that sorely needs it.