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It seems like Barack Obama has given up on one of his most emphatic campaign promises: to end the huge tax cuts for the wealthy imposed by Bush and to turn over the cuts to the middle class. This “deal” that he worked out with the Republicans (leaving, apparently, members of his own political party out of the loop) looks like the end of line for any residual hope that Obama represents “change”. Moreover, if you compromise out of your most important objectives, what’s left? Once you’ve sold your house for a dollar and your first born for ten, what are you going to do for an encore? Oh, you’re going to really fight for the small stuff?
This Democratic president, elected only two years ago with a massive vote in his favor, is now selling tax cuts for the wealthy and even a huge break on estate taxes. Here is how he is trying to peddle this:
"The American people didn't send us here to wage symbolic battles."
Obama said these words as he urged the Democrats on Capitol Hill not to go against him and let all of the tax cuts, including those for the middle class, expire. Well, hells bells, what did the American people send them here to do? Give up before the fight has even begun? Be more Republican than the Republicans?
The wealthy would get to keep their Bush tax cuts and get richer. Those making under 250K a year would get to keep their cuts (this is a Republican “compromise”?)Payroll taxes would be cut by 2% for one year, giving employers an incentive to make new hires and giving every earner a small tax reduction. Then, to top off this wedding cake for the Republicans, estate taxes would be reinstated, but they would only apply to individuals leaving more than 5 million or couples leaving more than 10 million and then would be pegged at 35% tax of the total (before Bush II the tax had been at 55%) Oh, and extended unemployment benefits would continue.
In other words, small potatoes for working people and the modestly well off, big breaks and party time for the wealthy and very wealthy. Till death do us not part with our money, in fact.
One of the strangest parts of this whole thing is that Obama apparently worked out a deal with the Republicans, but not his own party. How can there be a grand compromise if 1/3 of the equation is missing? I am guessing that Obama and company wanted to avoid the nasty, rabid dog fight that engulfed health care, so they decided to go it alone. Right now, this looks like a huge mistake.
Prediction: now Obama and company are going to have to negotiate with Democrats in Congress and, then, go back to the Republicans and make another deal. Otherwise, they are asking Dems in Congress to swallow a large dose of poison with a small drop of sugar. The Democrats are going to be in open revolt, even if they hide it as a closed door revolt.
If the Bush tax cuts are not ended now, they probably never will be, short of an out right revolution in the United States. 2008, after all, was about as close to a revolution at the ballot box as you can get. Republicans were down, out and as defeated as you can get and still be a functioning political party. Somehow, Obama has managed to change that grand victory into a sniveling defeat that requires him to grovel before John Boehner.
Suppose instead of making nice with the Republicans, Obama had announced that the Republicans would not allow the extension of unemployment benefits and would not allow the tax cuts for most people to go forward. As a result, Obama might have then said, Okay, they don’t agree with us that the middle class in America is important, so we will all have to live with the consequences. Would that be so very, very bad?
The White House appears to be gambling that the economy will turn around by 2012 and Obama can ride the tax changes he favored, along with the substantial legislative gains of the first two years, back into another term in the White House. This is a very, very big gamble and one that, so far, he has shown no ability to win, because it requires him to get credit for what he has accomplished from many people, like the unemployed or under employed, who don’t want to give him credit or, perhaps, even listen to him any more.
The only way any of this looks like a good deal for Obama is when you consider that the “Tea Party Congress” is about to be sworn in. He and his advisors are probably assuming he can get nothing from the incoming Republicans, so they better get a bad deal now while they can. Perhaps this will turn out to be true, but, in the process, they are putting income and wealth inequality into more or less permanent law in America. This is not merely a mistake, it is a dangerous one.
We are giving up, it seems, on an America where there is any sort of economic fairness. The rule is grab everything you can get, however you can get it, and forget about anyone else, including the country that allowed you to get rich. With unions having less and less power, with the federal government acting as hand maiden to the wealthy, where are ordinary citizens to turn? The well established principle of progressive taxation is out the window. Instead, we will see more and more regressive taxation that falls harder and harder on those who earn less and less. That’s how things work: when government can’t get revenues in fair and straight forward ways, then creeping little taxes that hit wage earners everywhere come into play. It is so much easier to hit lower income earners with taxes, because they don’t have political power.
The Republicans on Capitol Hill must be laughing their heads off. They “gave up” almost nothing and they got a barrel of things they wanted. If they want to, they can even claim equal credit for extending the unemployment benefits and cutting payroll taxes, since they were an equal part of the compromise. Obama gets what? To say he tried his best? From where I sit, it looks like he compromised all of his principles and they compromised by accepting his decision to give them what they wanted.
Doug Terry, 12.7.10
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