“President Obama and congressional Republicans agreed Monday to a tentative deal that would extend for two years all the Bush-era income tax breaks set to expire on Dec. 31, continue unemployment benefits for an additional 13 months and cut payroll taxes for workers to encourage employers to start hiring,” the Washington Post reported this afternoon.
“The deal has been in the works for more than a week and represents a concession by Obama to political reality: Democrats don’t have the votes in Congress to extend only the expiring income tax breaks that benefit the middle class. The White House estimates that the proposed agreement would prevent typical families from facing annual tax increases of about $3,000, starting Jan. 1.
“Obama was able to extract an agreement from GOP leaders to support an additional 13 months of jobless benefits, a 2 percent employee payroll tax cut and extensions of several tax credits aimed at working families that were included in the stimulus bill.”
The rest of the article is here.
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“…a tentative deal that would extend for two years…” Brilliant strategy: make a “tax increase” (clever Republican spin) a 2012 campaign issue.
Obama and his staff of Merry Dems: the (sales) gang that couldn’t shoot straight.
If Hillary runs, I will support her. I don’t think she would have fumbled basic, simple political strategy like this.
I understand that Obama has accomplished a huge amount during his first 2 years. But his marketing approach and communication skills are horrible. “Hello Kitty” has a better bully pulpit.
Politics [metaphor alert] is the art (and game) of hitting your opponent with a 2×4 filled with rusty nails, and having him ask for more. The Rethugs have been winning that game since January 21, 2009.
Handing gift baskets to despicable authoritarians like Mitch McConnell (I watch him on TV and wonder how many live kittens he just ate) makes me go insane.
A whole bunch of Dems are not onboard with this so it will be interesting how this plays out.
The Writer of MLK’s I have a Dream speech, who has sterling “credentials” has called for a Democrat to take on BO in the primary. His call for someone to do this is on HUFFINGTON POST as of yesterday.
And the Dems are wondering why people didn’t show up on November 2, 2010 nationwide.
Gee Ben, the Democrats aren’t stupid. We know. I, for one, am beside myself over this betrayal.
Sharon,
Yet they continue to let down their base over and over again.
Here is a fun fact about voter registration
72 million registered Dems 42%
55 million registered Repubs 33%
If the Dems work towards their base values they win every election.
Run against the incumbant in the primary, elect the opposition in the general. Works every time. (Reagan-Ford primary…Carter wins. Carter-Kennedy primary…Reagan wins.)
I do not see that anything else could have been done at this point unless we want to see all those families dependent on an extension of unemployment benefits with no income for this next year. Some liberals have yet to realize exactly what position the erosion of the New Deal regulations and safety nets over the years since the end of the Depression of ’29 have put the working people of this country in. Ben Emery compares the number of registered Democrats to that of registered Republicans, with the former much greater in number. The problem with using this to make a point is that registered Democrats are far ournumbered by Republicans when it comes to money. and if anyone has a doubt that money is power and wins elections, let him or her go directly to the corner of the room, sit on the stool and put on the dunce hat. Watching an interview with President Carter on the Lerher report tonight, Carter pointed out, as have many liberal politicians, economists, and the facts support it, that the rich have gotten richer, and the poor poorer. That is what has gotten our economy out of balance, and that is the basic cause of our economic problems and it is very difficult to turn around. Had it not been for some wealthy liberals such as Warren Buffet, Democrats could not have won that ’08 Presidential election. We do have people of principle like Buffet and Bill Gates to help the average folks out, but we are in a hole, and digging our way out is not easy. Extending the tax cuts and unemployment benefits both will add to the deficit, and this amounts essentially to putting further stimulus funds into the economy, which is exactly what liberal economist Paul Krugman has said should be done. Fact is, this has been his major criticism of Obama’s economic program thus far, that too little in the way of stimulus spending has occurred. We know that those on unemployment will put their money right back into the economy. And though we have 9.8% unemployment, still most still have jobs and they will have less to pay in taxes and more to spend. We must hope those who own businesses and have been sitting on their funds waiting to see what would happen about the Bush tax cuts will start spending and hiring now. Obama’s best chance for re-election in 2012 is a healthy economy, and the compromise worked out by Democrats and Republicans (not the Tea Party as they must be screaming at this increase in the deficit) will likely prove the best plan to bring that about. The extension of the Bush tax cuts is not forever, and the 2 years is tentative. The final term could be shorter. The compromise, my opinion, is the best deal Democrats can get at this time.
Pat:
While I’m generally persuaded by your argument, just for the record I must point out that you’ve invoked Krugman in support of a conclusion he explicitly opposed in his most recent column:
You wrote:
“Extending the tax cuts and unemployment benefits both will add to the deficit, and this amounts essentially to putting further stimulus funds into the economy, which is exactly what liberal economist Paul Krugman has said should be done.”
Krugman, in his column two days ago, wrote:
“But while raising taxes when unemployment is high is a bad thing, there are worse things. And a cold, hard look at the consequences of giving in to the G.O.P. now suggests that saying no, and letting the Bush tax cuts expire on schedule, is the lesser of two evils.
Bear in mind that Republicans want to make those tax cuts permanent. They might agree to a two- or three-year extension — but only because they believe that this would set up the conditions for a permanent extension later. And they may well be right: if tax-cut blackmail works now, why shouldn’t it work again later?
America, however, cannot afford to make those cuts permanent. We’re talking about almost $4 trillion in lost revenue just over the next decade; over the next 75 years, the revenue loss would be more than three times the entire projected Social Security shortfall. So giving in to Republican demands would mean risking a major fiscal crisis — a crisis that could be resolved only by making savage cuts in federal spending.
And we’re not talking about government programs nobody cares about: the only way to cut spending enough to pay for the Bush tax cuts in the long run would be to dismantle large parts of Social Security and Medicare.”
From “Let’s Not Make a Deal”
http://www.nytimes.com/2010/12/06/opinion/06krugman.html?ref=columnists
Thanks Pat. You’re a keen political analyst, and your humanity is inspiring and refreshing. Happy holidays, from our family to yours!
Pat,
So you are saying since the republicans have more money the democrats need to abandon their roots? Well in my opinion they pretty much have since the early 90′s and the creation of the DLC or the corporatist third way. Tony Blair did the same thing with the Labour Party and they have been on the down-slide ever since.
http://en.wikipedia.org/wiki/Democratic_Leadership_Council
Until we start manufacturing the items we use in the US again no amount of stimulus will restart this economy. Every time we purchase something it is stimulating another nations economy. I agree Obama should of advocated a huge stimulus bill to rebuild our crumbling outdated infrastructure to allow us to be a competitive 21st century nation but the third way Dems compromised down to a $700 billion stimulus accompanied with 1/3 of it tax breaks, and the elimination of a BUY AMERICAN CLAUSE.
I hate comparing George W Bush because I don’t want any administration to act like his administrations.
Bush and his Republican Party jammed through tax breaks through reconciliation, illegally invaded two nations according to US Constitution (Article I Section 8) and did so without proposing how they would be paid for, ran up $6 trillion national debt, got two complete right wing activists on the supreme court by threatening to blow up filibuster rules with the nuclear option, shredded the US Constitution, and they had only a fraction of the majority the Dems have today and the last two years.
What I’m I missing?
“Bush and his Republican Party jammed through tax breaks through reconciliation, illegally invaded two nations according to US Constitution (Article I Section 8) and did so without proposing how they would be paid for, ran up $6 trillion national debt, got two complete right wing activists on the supreme court by threatening to blow up filibuster rules with the nuclear option, shredded the US Constitution, and they had only a fraction of the majority the Dems have today and the last two years.”
This is a great encapsulation of the beginning of the 21st century, and it actually had nothing to do with George Bush. It was due to a corrupt and probably un-fixable antiquated 3-branch system that will either collapse under its own weight, or be heavily modified at the last hour under duress.
Michael,
We can only hope for the latter. The money has taken over crippling the checks and balances of the government. Money has always been a problem but not like today other than the one era you have already mentioned the “Robber Barons”.
What the Bush admin did show is how fallible our system is when people are unwilling to speak up, especially the news rooms. An uneducated citizenry is a scary thing.
Don and Ben, you bring up some excellent points. think all of us are much on the same page. I definitely believe these tax cuts must not be permanent, but our best chance for that is getting Obama re-elected in 2012, and for that our economy must improve. If liberals lose in 2012, all of the drastic cuts mentioned will likely come about. And we must bring the jobs home, to the extent possible in this era of globalization, if we are to have continuing full employment. There is also, in our future, the threat of the running out of fossil fuels and what that may mean for industrial nations whose economies were built on them, and of course, climate change. Along with trying to keep our political systems and government functioning and in balance, we must do the same with our ecology. Big job.
Everyone take a look
http://sanders.senate.gov/newsroom/media/view/?id=b02d50b1-259c-49ce-8615-4238a581c042
A much better compromise would have been to bump up the tax rate for those making $1M+ instead of $250K, and extend the unemployment benefits for six months with the understanding that when they run out, the well is dry.