Obama's Waterloo

This may be the last straw for Obama's Democratic base, according to the NYT, the day that key elements of the party began seriously looking for an alternative candidate:

But to his base, this is just the latest and most outrageous betrayal in what it sees as a two-year cycle of caving to conservative pressure and Republican obstructionism. The litany from the left is now familiar: Mr. Obama was too modest in his stimulus package, too afraid to fight for a government-sponsored option in his health plan, too deferential to Wall Street in his financial reforms, too weak to stand up to the generals on Afghanistan.

“Obama may have just ensured that he’ll face a significant challenge to his renomination in 2012 from inside the Democratic Party,” said Norman Solomon, a leader of Progressive Democrats of America. “By giving away the store on such a momentous tax issue, he has now done huge damage to a large portion of the progressive base that helped to make him president.”

Mr. Solomon added, “If he thinks that won’t have major effects on his re-election chances, he’s been swallowed up by a delusional bubble.”

For the moment, no credible primary challenger to Mr. Obama has emerged. But the anger on Monday extended beyond party activists. Democratic Congressional leaders acutely remember being cut out of the action when Mr. Clinton “triangulated” with Republicans in the 1990s, and Mr. Obama’s tax deal may provoke an open revolt.

Tony Fratto, a White House official under George W. Bush, said Mr. Obama failed to lay the groundwork with his own party. “Although the outcome here was inevitable, it will have real consequences for the president’s relationship with Congressional Democrats and his base,” Mr. Fratto said.

Could Hillary pick up where she left off in July of 2008? She is a bit too hawkish for the progressives, but on the other hand, she's a leader and not a facilitator, and people admire her tenacity and spunk. She was in 2008 very popular with blue-color Democrats (which always amazed me) and with women, of course, and perhaps the Clinton era of the 90s is now far enough away that people are willing to consider another Clinton Presidency.

At the moment, I see it as the most likely scenario, though I'm not sure how she transitions from being a loyal Secretary of State to a primary challenger, who could therefore be seen as a traitor by Democrats.

Addendum:  After thinking it over, I've concluded that Hillary will not challenge Obama this year.  It makes more sense that she serve out his first term as Secretary of State, building her creds with the party and the nation.  Then, if he loses in 2012, she is the heir apparent to him for 2016.  If he wins, she is also the heir apparent for 2016.  It requires patience on her part, but that is one quality she seems to have plenty of.