Harry S Truman would have told the Republicans to go pound sand.
William Jefferson Clinton would have gotten something real for the trouble, while sticking it to Republicans by letting the Bush tax cuts for the wealthy expire. Because back in the early ’90s, Bill first showed Republicans who was boss before he compromised.
But can we now all agree that Republicans don’t give a damn about the deficit?
That Pres. Obama actually fell for this line reveals just how badly this man is getting outplayed. That Republicans get 2 years on tax cuts for the wealthy, but unemployment insurance is extended only by 13 months says it all.
Republicans just used their austerity deficit argument to get Pres. Obama to give them everything they wanted, without giving up anything, with “deficit reduction” to come. As a bonus, Obama also adopted the Bush tax cuts line, talking about taxes going up if he didn’t give Republicans what they demanded.
Top marginal rates went up during Pres. Clinton’s term and that turned out pretty well.
That Pres. Obama allowed himself to be suckered into making the 13-month extension of unemployment benefits part of the negotiation and turned them into a bargaining chip is unconscionable. It’s weakness of the first order from a Democratic President.
Of course, good fall-in-line Democrats across the spectrum will blame the Republicans for making an extension of unemployment benefits part of the bargaining process, but in reality it’s Pres. Obama who in playing chicken with the Republicans telegraphed early that he’d give them what they want.
Obama was suckered into believing that not making the super rich tax cuts permanent, while exchanging his own Making Work Pay program, which knocked middle class taxes down $400, also adding a renewal of the estate tax Republicans also want at 35% and a $5 million exemption, will mollify the Right. Smarter Dems wanted the rate set at 45% and a $3.5 million exemption.
As for the 2% payroll tax cut, I’ve been for it for a very long time, but only if the Bush tax cuts for the super rich were not extended. But then I can do basic math.
Pres. Obama also assured he’s responsible for exploding the deficit, which they can then use against him in 2012, something that will still work with the wingnut crowd even if they don’t understand economics.
That’s the policy of the deal. The politics are similarly focused on the next election: Democrats are negotiating toward a two-year extension of the tax cuts. They’ve rejected a three-year extension. That means the next fight over the tax cuts will be part of the 2012 election. And the White House believes that an improved economy and a bigger deficit will make it much harder for Republicans to support extending tax cuts for the rich. If they try, that gives Democrats both a populist cudgel and a way to take hold of the deficit issue.
The White House’s problem is that they handled the politics of this argument so poorly in 2010 that their allies on the Hill don’t trust them to do better in 2012. One Senate staffer summed up his reaction to the deal in one word: “Nausea.” Another said the deal is fine — but it was getting hard to trust the White House. “Will they actually have that fight in 2012?” He asked. “They dropped the ball this time around.”
It’s clear that the White House sees that the Reagan – Clinton re-election model may not work even with Obama’s current numbers if he doesn’t get the unemployment rate down. It’s already being telegraphed that unemployment will remain in the 8% range when 2012 approaches, so this hail Mary to appease the Right, while using a disastrous conservative economic tax model, plus a payroll tax cut, to provide a boost in 2011, is in hopes that he will be rewarded with a better economy and a better launching pad for his re-election.
For added irony, Obama thinks he can turn populist in his reelection and win back voters and Independents by talking about ending tax cuts for the wealthy. Candidate Barack Obama played that card already in ’08 and when the going got tough he backed down on his promise. Fool voters once, well, the Left shouldn’t buy it.
What Obama needs most of all is job growth. Nothing else matters. Reagan and Clinton had unemployment rates well below what Obama will very likely face. Hey, but Obama doesn’t draw Democratic lines in the sand on principle, so playing to the Right was his only gambit. If unemployment comes down because of what you’ll hear being called a payroll tax cut “stimulus,” 2012 will look different and if it doesn’t he’s done.
Betting that economic growth and a sweetener will make people forget their tenuous employment status, the health care bills that are still skyrocketing, as well as the dismal retirement outlook for Americans, is all he’s got.
Next Obama will turn to austerity in the budget. And since Republicans won big on taxes it’s quite likely they’ll go to the wall against Defense cuts. Republicans have boxed Obama in between the military and an exploding deficit, but he’s the one who made it possible, compliments of extending tax cuts for the wealthy that won’t create a single job.
On the other hand, none of this will matter if Republicans rally the austerity crowd, aided and abetted by Pres. Obama, into believing that 2012 is about repealing “Obamacare,” as they call it, which will require a change of the presidency into Republican hands. The White House evidently hasn’t thought about this either, because their chess board only has one side to it.