Obama-GOP Tax Cut Deal Doesn't Mean Future Accords
WASHINGTON — President Barack Obama and congressional leaders are congratulating themselves for their bipartisan tax-cut compromise, hoping to be viewed as pragmatists who can work across party lines.
That may be smart politics as both parties compete for centrist and independent voters who will be pivotal in the 2012 presidential and congressional elections. But it hardly augurs future cooperation when the president and Congress turn to tougher tasks like tackling record budget deficits.
The reason: The tax-cut measure Obama signed was the painless, easy part, in which each side essentially said, "I'll give you what you want, but only if I get what I want." That resulted in a Christmas season bonanza for voters: $858 billion in renewed tax reductions for all taxpayers and extended unemployment benefits for people whose coverage was expiring, all paid for with future borrowing.
That's the kind of something-for-everyone deal that politicians usually fall over themselves to support, not a measure of how they'll perform when the stakes get higher. Resolving more complicated issues like finding trillions of dollars in spending cuts and tax increases to erase red ink will require compromises on how much pain – not gain – each side's constituencies will have to bear, a far more difficult task.
"The compromise involved Democrats allowing Republicans to eat their dessert in return for Republicans allowing Democrats to enjoy their dessert," said Robert Reischauer, who heads the liberal-leaning Urban Institute research center and once led the nonpartisan Congressional Budget Office. "Both neglect the reality that an unavoidable diet will have to begin in the not too distant future."
At last Friday's White House signing ceremony, Obama thanked GOP leaders arrayed around him like Senate Minority Leader Mitch McConnell, R-Ky., for their willingness to do "what was right for the country, even though it caused occasional political discomfort." He said both parties were unhappy with parts of the package but added, "That's the nature of compromise – yielding on something each of us cares about to move forward on what all of us care about."
Mindful of their conservative tea party supporters, Republicans seemed more focused on their own agenda. House GOP leader John Boehner of Ohio – who will be speaker when the GOP takes control of the chamber in January – spoke in a written statement of the need to cut spending, make the tax cuts permanent and repeal Obama's health care overhaul.
"I hope President Obama will listen to the American people and work with us to stop Washington's job-killing policies," Boehner said.
What neither Obama nor Boehner acknowledged was how much more arduous it will be to find that common ground in the future.
One indication of how hard that will be came from last week's House and Senate votes approving the tax package.
Significant numbers of Democrats voted against it, not because it hurt their supporters but because they believed it provided an overly generous reduction in the estate tax paid by wealthy heirs, a GOP constituency. Similarly, Republicans who opposed the package were not complaining that their voters were being hurt, but rather that the deal wasn't lavish enough, extending the expiring tax cuts for only two years instead of permanently.
In contrast, imagine how tough it would be to line up support for controlling budget deficits, which now exceed $1 trillion a year, when cherished programs are being slashed and taxes raised, hitting Democratic and Republican voters in their pocketbooks.
A taste of how challenging that would be was provided recently when a bipartisan deficit-reduction commission named by Obama reported its recommendations but failed to garner enough support from its 18 members to force Congress to vote on their plan.
The panel's proposals for finding nearly $4 trillion in savings over the next decade included culling savings from the Pentagon, Social Security, Medicare and other popular programs, raising the federal gasoline tax and eliminating prized income tax deductions.
Every one of those proposals could spark nasty battles between Republicans and Democrats.
Making compromise even harder will be the incentives both parties have every election year to create contrasts with the other side.
While it is important to attract voters from the middle, each party also needs to fire up its most passionate supporters. This will make it all the harder for Democrats and Republicans to join hands on anything that inflicts major pain on either's supporters in the name of making the government's books look better.
"My guess," said Reischauer, "is we'll cruise along until 2013 and then have another round of both parties promising lower taxes."
That would do the opposite of controlling federal deficits. But it sure would be easy for lawmakers to vote for.
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ALAN FRAM 12/20/10 01:33 PM ET Associated Press