Obama's Tax Cut Win
The deal to extend tax cuts for the rich may disappoint the left, but President Obama knew that raising taxes in an economic slump simply wouldn't make much sense.
I don’t remember when I first heard the little ditty, “When in trouble… when in doubt….run in circles… scream and shout!” But, I have been reminded of it each time I’ve heard or read someone from the Democratic left bitching about President Obama’s alleged weakness or lack of conviction. “If he’d just fight more,” we’re told, “he’d get more.” There is one major problem with that contention: It is based on myth rather than math. The votes just aren’t there to do what the left wants done. The votes haven’t been there in the 111th Congress, and they sure won’t be in the 112th.
There is little doubt that the announcement from the White House late Monday that the President and Congressional Republicans had reached a compromise (horrors!) to extend “the Bush tax cuts” will send many on the left into further apoplexy.
To those less inclined to form a circle in which to “scream and shout”, I commend Ezra Klein’s observation in The Washington Post that, “The final deal includes some things that Democrats will like and some things they won't like, and it includes some things Republicans will like and some things they won't like. But it's a deal, and a better one than many…thought they'd reach.”
Generally speaking, experience suggests that legislation that displeases chunks of voters at the polar opposites is probably pretty good public policy; this compromise appears to affirm that principle. While extending cuts for the super rich may be unfair (in the minds of many on the left), that argument does not trump the belief on the part of most people that raising taxes in the middle of a continuing and serious economic slump simply doesn’t make much sense.
In the larger scheme of things, much more important are concessions that the President apparently extracted from Republicans in this deal, chief among them are a thirteen month extension of unemployment benefits and a significant reduction in payroll taxes, which are--any way you figure--among the most regressive of all taxes. These accomplishments, together with the extension of both the earned income tax credit and the child tax credit, it can be argued, mitigate whatever unfairness might be associated with continuing the Bush era tax rates for those with income exceeding $250,000 per year.
The deal reached today is big news, to be sure. It is a win for the President. The elements of the deal are significant, but not nearly as significant as the fact that it was achieved in fairly quick order. What many--myself included--feared would be a wasted and ugly lame duck session of Congress now has a chance of being fairly productive. There should be time now, before the 111th Congress folds up its tent, to approve critical funding measures, and perhaps even to ratify the New START treaty. It would be nice, as well, if Congress would have the guts to repeal “Don’t ask, don’t tell.” There is time to do all of this, but what is not known is whether or not the tax deal has also produced “fungible goodwill” to help move other things along. It would be nice if it did, but one probably shouldn’t count on it.