1. President Obama’s swagger. More than just a post-election glow, Obama has actual leverage over Republicans, and he is not going to waste it. Some pundits say that Obama’s newly confident negotiating posture is the result of lessons learned during the first term wrestling over the debt limit and budgets: He could offer the farm for free and Republicans wouldn’t accept it. But Obama was genuinely constrained by the political realities of the time, much more so than he is today. The economy was in a more precarious state; the options Obama had for stimulus were few; his own party was under assault from the Tea Party movement over deficit spending, and the health care battle had exhausted Hill Democrats. Today, Obama can afford to be more confident. He has no re-election ahead of him; his time threshold for action is much longer. The economy is better.
2. Americans support Democratic policies. To be fair, Americans supported Democratic policies during the last round of these fights; a balanced approach to deficit reduction that supported taxing the wealthy more while slowly reducing the deficit relative to the size of the economy. But the election was in many ways an explicit referendum on economic policy. The Democratic candidate ran on the issue of raising tax rates (or letting the Bush rates for upper-income earners expire), where Republicans ran on significantly cutting spending. Obama could not marshal public opinion that was already in his favor before; it is much easier for him to do so now.