The argument tells us that if legislation is a result of compromise, it will not satisfy anyone.
compromise legislation -> no one is happy
The groups are unhappy about a recent piece of legislation.
no one is happy
The argument then concludes that recent legislation represents a compromise
compromise legislation.
To put it all together:
P: compromise legislation -> no one is happy P: no one is happy C: compromise legislation
The argument commits a logical fallacy known as affirming the consequent, concluding that because the consequent (no one is happy) is true, the antecedent must be true (compromise legislation). The only proper inference he is that if all the groups are happy, we can conclude that the piece of legislation is not a result of compromise. In so doing, the argument confuses necessary and sufficient conditions, concluding that "compromise legislation" is a necessary condition and "no one is happy" is sufficient in order to draw its conclusion. (B) accurately describes this logical flaw.
(C) is incorrect because there is no equivocation here. The key terms- "compromises", "unhappy with it" are used consistently throughout the argument.