Clinton and Cheney were both right.*
If the START II treaty, DADT repeal, a permanent middle class tax cut and a permanent unemployment extension only cost $70b to extend the extra tax cuts for the rich, I really don’t see the downside of just giving it up, other than the fact that Obama has been painted into a bit of a corner on the issue. But haven’t the Republicans been painted into a corner on the other stuff?
The reality is that the Republicans can sustain a filibuster in the Senate right now and will control the House in the next Congress. This is standard political horse-trading. I don’t see the problem.
Maybe it’s because I just don’t care about the deficit when government can borrow at historically low levels and there is 10% unemployment. So, it’s $70B for the rich. Ideally, that would all go to the middle class, but the truth is that there it would take a fiscal stimulus of upwards of $2.5T to really get the economy back in shape.
Also, I know that the “deficit” just means government spending you don’t like. It doesn’t really matter, especially not under the current conditions. If the deficit really were a national security emergency, we would end the wars, not extend any of the Bush tax cuts, and have single-payer healthcare. But it’s not.
The voters have made clear that they don’t care about deficits. Politicians can’t tell voters to care about something 10 years in the future, because an entire government can be changed in 6. In fact, the voters will not tolerate a balanced budget, as they made clear in 2000. They want “their” money back. The voters will not tolerate high unemployment as they made clear in 2010, 1994, and 1992, and many times before. They will not tolerate cuts in social programs, as the 2005 social security attempted bamboozle demonstrated. On the contrary, the voters did not punish Johnson, Reagan, Bush I, or Bush II for running huge deficits.
This is hard to deal with for some people because it is internally inconsistent and crosses party lines. But it’s what the voters say. Politicians might be forced into bad policies listening to them, but it’s kind of their job and it’s kind of our system.
The President that has to deal with an Ireland-like situation in the future will be the first one the voters punish for the deficit alone.
Obama, for whatever reason, has been on a quest to re-litigate all of the issues of the Clinton years and not fixing the Bush years. So, he's worrying about being able to match Clinton's performance on the deficit, something most presidents haven't given much of shit about. This was Obama's capitulation that makes the other team able to win so easily: they know he cares about the deficit. They don't.
* I'll add the caveat that deficits don't matter when interest rates are this low and it's the economy stupid when there is high unemployment. Those conditions obtain now even if they didn't necessarily when Cheney said it.