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Michael Wenger Headshot

The People Who Need This Deal

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The current outrage among progressives about the tax deal negotiated by President Obama and Republicans reminds me of a philosophical debate we used to have when I was an anti-poverty community organizer in the late 1960s in southern West Virginia. Most organizers were idealistic middle-class college students or recent college graduates who were convinced they were on the side of the angels in trying to change a system that unfairly condemned the powerless to a daily struggle for economic survival while those with political and economic power wielded their power for personal gain at the expense of the powerless. We believed passionately that compromise equaled "selling out" and that it was better to fail while standing on principle than to take half a loaf.

But while we could and would trade our community organizing efforts for economically secure careers after a few years, those who were struggling to put food on their tables, a roof over their family's head, and clothes on their children's backs were less interested in changing the system than they were in making it to the next day. To them, as President Obama alluded to in his press conference, an abstract debate about principle was a luxury they couldn't afford. That's what progressives need to keep in mind over the next few days as this deal moves toward a vote in Congress.

I stand with progressives in disliking this deal. By telegraphing his willingness to compromise before the negotiations even began, President Obama significantly weakened his position. Thus, Republicans knew they didn't have to budge on the tax cuts for the rich.

Nonetheless, it is difficult for me to see how progressives can justify a no vote on the deal if they really care about their middle and working-class constituents. First, a close look at the deal reveals that it is heavily weighted on the side of the middle and working class. Of the approximately $990 billion that this deal is expected to cost, $79 billion is a result of tax cuts for the wealthy. Add another $68 billion for the estate tax changes, and you have a total of $147 billion wasted on the rich. That's not chump change, but it amounts to less than 15% of the total. On the other hand, the total cost of extending middle income tax cuts and unemployment compensation benefits, providing a one-year payroll tax holiday, indexing the alternative minimum tax for inflation, and extending the earned income tax credit, the child tax credit and the college tuition deduction amounts to $617 billion, or more than 60% of the total. The remaining $226 billion is for business incentives for capital investments and for research and development. In sum, this doesn't seem like such a bad deal.

Second, and more important, failing to pass this deal means sticking it to out-of-work parents who need the unemployment compensation check to make it into next week, to students who need the college tuition break to make into the next semester, and to the working poor who need the Earned Income Tax Credit to make ends meet. To those who argue that if we hold out and stand on principle, we can get a better deal, I would remind them that they're not the ones at risk. They will still be able to dine out at their favorite restaurant, return to a comfortable home, write a check for the rent or the mortgage, and fall asleep under their electric blanket. If their strategy fails, no harm done -- to them.

From a strictly political point of view, this is not a bad deal either. First, by putting more money in the pockets of those who will spend it quickly and by providing additional incentives for business, it clearly will help to strengthen the economy, which is, after all, the key to the President's re-election prospects. Second, passage of this deal will open the door to possible votes during the lame duck session on the Dream Act, the Start Treaty, and "don't ask, don't tell." Third, when the 2012 election comes around, Democrats will be able to point to the blatant Republican hypocrisy about the deficit, and with the economy stronger, they'll be able to puncture the Republican argument that we shouldn't raise anybody's taxes in an economic downturn.

Progressives may feel that extending tax cuts for the rich is immoral and that the president could have gotten a better deal. In my opinion, they are correct. But they didn't have the courage to bring the tax cut extension to a vote before the mid-term elections, when they might have succeeded in getting a better deal. So, as they ponder their vote while seeking to get out of town in time to be able to spend Christmas opening presents with their families, they should think about those who will spend a present-less Christmas choosing between heating their home, if it hasn't already been foreclosed, and feeding their kids. Those are the people who need this deal, and they need it now.

The views expressed here are solely those of the author.