Testy Obama fires back at Democrats over tax deal

WASHINGTON (Reuters) - A testy President Barack Obama on Tuesday expressed frustration at his own Democrats for attacking him over his tax-cut deal with Republicans, who he called uncompromising "hostage takers."

Obama found himself in an unusual position a day after sealing a major tax-cut agreement -- praised by Republican opponents and denounced by liberal Democrats who felt he violated a pledge that helped get him elected in 2008.

Liberals accused him of caving to Republican demands by agreeing to extend all the Bush-era tax cuts, even those for wealthier Americans, instead of their preference for limiting the tax cuts to families making less than $250,000 a year.

Obama's tax-cut deal could be seen as a move toward the political center after November 2 elections in which Democrats suffered huge losses.

He said he could have spent months arguing the Democrats' position but that it would have risked further damage to the economy.

Obama leveled some of his toughest criticism to date at the left wing of the Democratic Party, saying his critics were taking a "sanctimonious" position that would not have helped solve problems.

His voice rose and he sounded exasperated when he said if he had refused to compromise, "People will have the satisfaction of having a purist position and no victories for the American people."

The country was founded on the principle of compromise, Obama said, and he singled out one leading critic, The New York Times editorial page, saying "The New York Times editorial page does not permeate across all of America. Neither does the Wall Street Journal editorial page."

HARSH WORDS

Obama, fresh from days of negotiations with Republicans who would not budget on the tax-cut issue, had equally harsh words for his political opponents for wanting tax cuts for the wealthy that he believes are too expensive.

"Let me say that on the Republican side, this is their holy grail, these tax cuts for the wealthy," Obama said.

And he made clear he was conflicted about agreeing to the deal with them. "I think it's tempting not to negotiate with hostage takers," said the president.

Incoming House Speaker John Boehner will soon have responsibilities to governor, said Obama. "You can't just stand on the sidelines and be a bomb-thrower."

Obama needs to regain the confidence of independent voters to help him win re-election in 2012. Independents frustrated at the pace of the economic recovery abandoned Democrats in droves in the November elections, handing control of the House to Republicans and giving them greater numbers in the Senate.

A Reuters/Ipsos poll on Tuesday found the number of Americans who believed the country was headed in the right direction fell 4 percentage points since late October, from 33 percent to 29 percent.

Obama said he was eager to debate the issue of tax cuts for the wealthy over the coming months, meaning it will be a topic for discussion in the 2012 campaign.

And he said Republicans should not consider him a pushover for an agreement that he believes was necessary to make sure middle-class Americans do not see a tax increase on January 1.

"I will be happy to see the Republicans test whether or not I'm itching for a fight on a whole range of issues. I suspect they will find I am. And I think the American people will be on my side on a whole bunch of these fights," he said.

(Additional reporting by Ross Colvin; Editing by David Storey)