Some say they will withhold funds for the next election. Even if they come around before the campaign kicks into gear, the initial backlash could hurt early Democratic efforts to counter GOP-allied groups.

By Matea Gold, Tribune Washington Bureau

President Obama's advisors are confident that liberals dismayed by his agreement to extend tax breaks for the wealthy will forgive him by the time the 2012 election kicks into gear.

But the current backlash on the left may intensify the immediate challenge Democrats face in building a new campaign finance apparatus to challenge Republican-allied outside groups that flexed their muscles in this year's midterm election.

Democratic operatives are already laying plans to set up new independent expenditure committees that can raise unlimited funds, and hope to enroll early contributors to establish a beachhead for the coming campaign. But some stalwart party donors are vowing to withhold funds because of their anger over the tax-cut deal.

"I do not plan to support Obama and his reelection effort," said Utah-based hedge fund manager Art Lipson, who gave hundreds of thousands of dollars to the Democratic Party and its allies in recent elections. He views the tax-cut compromise as a giveaway to Republicans that will increase the deficit.

"He's got many great qualities, but he is not a fighter," Lipson said of the president. "I've met with many donors and the level of disappointment is extreme."

Other discontented contributors are taking a wait-and-see approach.

"I would say I'm not a happy camper," said Paul Egerman, a software entrepreneur in Boston, who said this was the first time he felt Obama reversed himself on a significant policy issue. "That troubles me. I need to be convinced he really had no alternative."

The discontent in the party was underscored Thursday when House Democrats rejected the tax-cut plan in a rowdy closed-door caucus, raising questions about the measure's chances of passing.

Democratic officials said they were confident that both Obama and the party would have plenty of money in 2012, noting that the Democratic National Committee raised a record $195 million in this cycle despite anger in the liberal wing about the lack of a public option in healthcare reform and the slow pace of repealing the ban on gays serving openly in the military.

But the breach between Obama and his liberal financial backers comes at a time when Democrats are frantically trying to play catch-up with the GOP in building robust independent expenditure operations. Early fundraising in 2011 would help Democrats lay the groundwork, particularly in countering a slew of issue ads conservative groups are expected to air in the coming months.

"I can see why they're going to have some of difficulty," said Dennis Mehiel, a longtime Democratic contributor who runs a corrugated-packaging company in New York.

Mehiel said he would consider backing a well-planned independent expenditure operation, but noted, "People that have the capacity to write those kinds of checks are used to getting a return when they spend money," and that they may be reluctant to contribute if they do not feel the administration is effective.

(Continue Reading at LA Times)