WASHINGTON -- President Obama may not be able to shake the legacy of his predecessor's economic policies, succumbing to the "trap" they put in place with respect to tax cut policy, as former Bush political hands gleefully noted.
But among the economic advisers that staffed the pervious White House, the consensus on the deal that Obama cut to extend the current rates for at least two more years is decidedly mixed, if not somewhat sour.
Andrew Samwick, a Dartmouth professor who served as Chief Economist on the staff of the United States President's Council of Economic Advisors from July 2003 to July 2004, posted a little noticed column earlier this week under the less than subtle headline: "If This Is Working Together, I'll Take Gridlock."
In it, Samwick copped to finding himself with some strange bedfellows when it comes to his cynicism over the deal. "I am with [budget expert and former Clinton adviser] Stan [Collender] on this tax cut deal. And [the New York Times's] Paul Krugman, for that matter. I repeat my view that the Bush-era tax cuts should expire on schedule. The New York Times reports the two-year cost of this tax cut package at $900 billion. What is amazing is how little we have learned in three years."
For the $900 billion cost of keeping tax rates in place -- and extending other provisions elsewhere -- Samwick added, the country could have gone a long way towards, say, improving the $2.2 trillion gap in infrastructure repairs. In terms of getting the nation's fiscal house in order, that investment would have been wiser.
That, of course, is hardly the pitch coming from the Republican Party at this point in time, much of which has seemingly embraced the president's tax cut deal. But it should be noted that those who were involved in crafting the Bush tax cuts initially weren't exactly enamored with notion of keeping them in place. R. Glenn Hubbard, Dean, Columbia Business School and chair of the Council of Economic Advisers under Bush, called for their expiration after a two-year window -- the agreement that Obama has chosen by default. His office declined a request for comment on the deal struck this past week.
The more common refrain from Bush hands, it seems, is one of ambivalence about the arrangement between Obama and Republicans.
Alan Viard, a fellow at the conservative American Enterprise Institute who was a senior adviser on the CEA at the tail end of the second Bush tax cut package, said that it was
"hard for anyone to be enthusiastic about" the deal cut by Obama. There was enough in it "so that people have a hook to be positive," he added. But in trying to satisfy disparate ideological camps, the White House didn't affirm any clear economic objectives.
"What they have done here is try and come up with something for the short run and left the deficit issue unresolved in a serious way," Viard told the Huffington Post. "The bottom line -- that is what they did. If the goal is to provide a stimulus while the economy is weak, then there is a case to throw money at it, but to control deficits in the long run is needed as well.
"This clearly falls short of an ideal outcome. I don't know how this will or won't change the momentum for deficit reduction."
Others were a bit more bullish on the package. "It's a good deal," said David Frum, a speechwriter under Bush and an analyst on topics both political and economic. "I'm glad to see a payroll tax measure included, and hope parties can work as positively together when it comes time to balance budget as recovery takes hold. I object to the [idea that there is] 'something to annoy everybody,' because the unemployment extension is also positive and welcome."
The economics of the tax cut package are, indeed, a bit more muddied than the politics. And for self-professed deficit hawks who reside in the world of academia, there is not all that much willingness to get twisted into rhetorical pretzels trying to justify an additional $900 billion in unpaid for spending.
And yet, for the political practitioners -- certainly those from the Bush years -- there is little effort needed to advance the idea that Obama is continuing his predecessor's practices.
"The fact that these have been identified as right policies by an administration that has [had] a knee-jerk response that if Bush promulgated it, we have to be against it -- it's a recognition of how sound these policies are and how necessary they are," Karl Rove told Politico.
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