At first blush, President Obama's tax cut deal -- trading an extension of tax cuts for the wealthy in return for an extension of unemployment benefits for millions of Americans -- is a setback for Obama and the Democrats. But a closer look at the reality of the deal makes this a clear win for Obama, and probably for Democrats in the long run. Even better, it appears that Obama has finally hit his stride and is now beating the Republicans at their own game.
Granted, it is outrageous to be subsidizing tax breaks for millionaires in the midst of the Great Recession -- not to mention adding to the deficit. But let's look at the facts for a moment -- both of the policy and the politics. First, on the policy front, the tax cut deal amounts to a $900 billion dollar stimulus package at a time when most economists -- notably progressive economists like Paul Krugman -- are calling for continued stimulus to promote economic growth. Can you imagine the reaction from the Republicans and the Tea Partiers -- not to mention Blue Dog Democrats -- if Obama had proposed a $900 billion stimulus package? But that is exactly what the Republicans have agreed to.
This was clearly a case where the White House outfoxed the Republicans by leveraging their own inconsistent ideology against them. At the very same time that the Republicans are screaming about government spending and about lowering the deficit, they were stonewalling any attempt to take away big tax handouts to the wealthiest Americans. Okay, said Obama, have it your way. We'll let you have your tax cut extension in return for extending assistance to the millions of unemployed Americans who desperately need our help. Fine, said the Republicans, perhaps gloating over their tax cut victory, but not realizing that theirs was nothing more than a Pyrrhic victory. The net result -- another $900 billion stimulus package. Try explaining that to the Tea Partiers.
When you look at the politics of the deal, Obama's victory over the Republicans seems even more impressive. Another $900 billion in stimulus funds will certainly help to hasten the recovery, which is already on a slow uptick. By 2012, the economy should be on the upswing, if not in full recovery, which will only help Obama's re-election prospects. Clearly, the single most important factor in the re-election of any presidential incumbent is the state of the economy, and this week's tax cut deal makes Obama's re-election chances look considerably brighter. (For the sake of the country, we must address the deficit for the long term. But I would much rather have rational, progressive approach to deficit cutting than the knee-jerk, inconsistent Tea Party sloganeering).
As for the Republicans, the tax cut deal rips open the inconsistencies in both their politics and their policies. From a policy standpoint, they are screaming about the deficit and government spending while they push for tax cuts for the richest Americans at the expense of millions of the unemployed. In any universe, that is both bad politics and bad policy. Their position will come back to haunt them as they try to explain their position not only to the Republican base, but especially to independents in the future.
Perhaps more importantly -- from the perspective of political optics -- the public will recognize before long that the Republicans cut a very bad deal, and that Obama was particularly adroit in outmaneuvering them. In fact, this deal may be the same kind of important turning point as the Gingrich shutdown of the government in 1995. Looking back, the tax cut deal may be regarded as the point when Obama finally regained his stride.
From a purely political perspective, the opposition that Obama is experiencing from Democrats in Congress is actually a positive for the White House. When the rest of the country -- especially the independents -- see Obama getting flack from his own party for the deal, he will rise in their estimation as someone who is willing to take on his own base. In truth, when the outlines of this Obama victory become clear, it is likely that most Democrats in Congress and around the country will realize that Obama has regained his mojo and outfoxed the Republicans at their own game.
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Stephen Herrington: Let the Bush Tax Cuts Expire in 2010 or Make Matters Worse
Using the unemployed as a lever to get this steaming pile passed is an egregious affront to the public trust by all concerned.
I can't wait for the same WH apologists to defend the dismantling of social security as a "moderate" "centrist" "serious" policy. The payroll tax holiday is the weapon. by 2012 the WH will propose phasng in private accounts until the entire system is handed over to the bankers in walstreet, the benefactors of the party.
But this deal was a bridge too far for me. I've been calling my representative, saying to vote no on it when it reaches the House. (I emailed my senators too, but it sounds like a done deal in the Senate.) And I've been saying that unless the president does something to earn it, I'm not going to bother supporting his re-election effort, and focus on Congress and state-level elections instead in 2012.
He needs to bow out of the 2012 race because he has become a liability to the entire Progressive agenda that he was so convincing in selling before he was elected.
It's been a long slow fall from that pedestal we all put him on.
Heck, everything seems to d/i/e in the Senate...I don't believe they could pass a bill for giving their best friend a birthday gift! lol
What's that phrase John McEnroe used...
You cannot be serious!
If the economy goes up:
--the republicans claim it is because "trickle down" actually works.
--the republicans claim that tax cuts are the way to a healthy economy--which is a major republican platform (and not true).
If, as the economists predict, the tax capitulation actually only moves unemployment 1% , and therefore the economy is still considered "in the hole"
--the republicans claim it is because of not enough tax breaks, the crushing nature of the extension of unemployment, and not getting rid of estate tax all together.
The republican challenger also gets to run on a higher deficit (thanks to Obama).
Then, the republican gets to run a plethora of broken campaign promises and complete 180s:
--Ending the Bush tax cuts
--No mandates
--A public option
--along with gitmo, the wars, LGBT issues, the enviornment, and everything else there is of Obama on video tape.
Can't you just hear the tag lines "what does he really stand for"?
Then, in the meantime, the president has angered what is left of the base and many of the major donors. Enough to start rumors of a primary challenger. Which, either way it goes, will decimate the party and fracture the black vote.
Lousy politics, lousy policy. Unless you are working for Larry Summers and Citigroup. Which I'm guessing the president actually is.
Let's look at the repeal of Glass-Steagall and remember how well dismantling depression era safeguards has served us.