End of year action restores Obama luster

From the wreckage of the mid-term elections, US President Barack Obama, preaching pragmatism and bi-partisanship, is engineering a political rebound and reinvigorating his administration.

Yet there are signs that the rare moment of compromise that drove a massive 858-billion dollar, economy-boosting, tax cut bill through Congress may be fleeting, with next year's battle with Republicans already simmering.

Obama's Democrats meanwhile Saturday celebrated Congress's repeal of a law barring gays serving openly in the military -- a liberal dream for years -- and part of the president's 2008 election platform.

"This victory belongs to you," Obama told supporters in an email after an historic Senate vote, apparently seeking to reconnect with liberals angered by his compromise with Republicans which extended George W. Bush-era tax cuts.

"Without your commitment, the promise I made as a candidate would have remained just that."

After delaying his departure for his annual holiday in his native Hawaii, Obama was also working overtime to close another significant political victory -- Senate ratification of a new nuclear arms deal with Russia.

December's achievements will join a historic health care reform, a financial regulatory overhaul and the rescue of the banking and auto sectors in an already full presidential legacy after two crisis-scarred years in power.

The new Strategic Arms Reduction Treaty (START), the "Don't Ask, Don't Tell" Senate vote on gays in the military and the tax bill came in an unusually active and productive session of the "lame duck" Congress.

Lawmakers who lost their seats in the congressional election meltdown in November returned to work to pass prized remnants of the Democratic agenda, before Republicans take control of the House of Representatives in January.

The lame duck session marked an end and a beginning for Obama's presidency.

Given the Republican triumph in November, Obama will no longer have the Democratic allies needed to push huge, historic legislation through Congress.

But in several moves, including the tax cut compromise, he seemed to set the stage for a new political episode -- the run-up to his 2012 reelection bid.

The new political reality is already throwing up odd political moments.

Obama claimed a big win with the tax cut bill -- not surrounded by Democratic leaders -- but joined by Mitch McConnell the Senate Republican leader who has tried to roadblock his agenda.

His foe, who has vowed to deprive the president of a second term, responded with a thin smile as Obama signed the bill into law.

Though the compromise contained help for the unemployed and middle class tax relief, many core backers felt betrayed as it went back on Obama's pledge to end Bush-era tax handouts for the rich.

But Obama argued this was the kind of painful compromise necessary in the new divided Washington.

"I don't believe that either party has cornered the market on good ideas. And I want to draw on the best thinking from both sides," he said on Friday in a throwback to the rhetoric of 2008.

In truth, it suited Obama and the Republicans to make a deal.

Republicans say they reined in a Democratic president bent on raising taxes and will claim a share of any resulting economic growth.

And the Bush tax cuts, now become the Obama tax cuts, boosting the president among middle class independent voters who he needs to win reelection, but who deserted Democrats in November.

While he infuriated liberals on taxes, Obama delighted many by repealing "Don't Ask, Don't Tell" with the help of Senate Democrats and a handful of Republicans, and may get some breathing space on his left.

Though Obama appeared energized and almost liberated since the congressional election, he has not had things all his way.

Senate Republicans thwarted a Democratic bid to pass an omnibus spending bill worth more than a trillion dollars.

That means Republicans, who have vowed to cut government spending, will have more sway on the federal budget, when they take control of the House of Representatives in January.

Senate Republicans meanwhile are fighting a rearguard action against START, a pact that cuts nuclear weapons stocks, because they says it hampers US missile defense plans.

Senator John McCain, who Obama beat in the 2008 election, complained on Saturday that Democrats were trying to jam legislation through the old Congress in defiance of the wishes of voters.

And he warned of a tough 2011 to come.

"Do you somehow think that beginning next January 5, we will all love one another and (sing) kumbaya? I don't think so."

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