On one hand, it’s extremely important to get the renewable tax credits passed, and Republicans have made it very clear they won’t allow that to happen unless they get some drilling. As usual, Dems don’t have the votes to overcome united Republican opposition, so the choice is to let the credits go down in flames — and get tagged as ineffectual on the most hot-potato political issue of the season — or give some ground on drilling. Yes, things would be different if the media were better at covering this stuff accurately; they’d be different if champions of renewables had better messaging around gas prices; they’d be different if Reid knew how to work a Republican filibuster to his advantage. But they are not different, so there it is. In that context I’m not sure it’s crazy for Obama to express openness to compromise (he is in the Senate, remember).
On the other hand, the mistake the Dems make again and again is to approach these contretemps as good-faith policy disputes. That’s just not how the R’s are thinking. For them this is a pure partisan political battle, and right now they have the advantage — this is virtually the only issue where they have it. It is in their best interests not to pass legislation. They want to keep the issue in the public eye. Right now their best move is to maximize their demands and hold a hard line. That allows them to appear to champion solutions while blocking any actual legislation — and to attack the "do-nothing Congress." They’ll do what they did with the energy bill — fight it off, hack it down to nothing, and then take credit for it.
In that context, I’d rather see Obama and the Dems accept that there will be no bill this session and plan for how to pin it on the Republicans. Next year — and it isn’t that far away — will look very different.