Throughout progressive circles there has been a solid chant: President Obama has sold out. He has renewed the hated Bush tax cuts, handing millions and millions of dollars to billionaires. I've read lots of articles about it, all using the language of weakness and defeat: he has "caved," "folded without a fight," is "meek," or worse yet, "shown his true colors." Let me tell you right now, I understand that frustration. We progressives just lost a big election and we want our president to be as outraged, frustrated, and pugnacious as we are. So when he meets with Senate Republicans and comes out supporting this giant giveaway for the rich without even calling them names, we feel a bit betrayed. But let me tell you, extending the Bush tax cuts isn't caving. It is the smartest move I've seen in a while. In fact, we got this at a steal.
Before we get into the details, let us talk about Plan B. So what if Obama had said, "No, I will only sign the extension of middle class tax cuts." This proposal had passed the House, but had no prayer in the Senate. Without the 60 votes necessary to overcome a filibuster, Senate Republicans would have run out the clock and everyone's taxes would have jumped at the start of the new year. Yes, we could blame the Republicans for that, pin this to them, but people will not see it that way. All they will see is that Obama could have signed a bill to lower their taxes and he didn't. So what options would be left? Negotiating with Sen. Rand Paul over tax policy during a presidential election cycle? The whole fight would become a circus and the American people would continue to struggle.
Second, the package extends unemployment checks to over two million people. That stops the Grinch from stealing Christmas. Beyond that, there is a $2,500 tuition credit offered to eight million students to tackle rising education costs, 12 million low-income families will receive an extension on their child tax credit, and there are a variety of credits for business which will encourage hiring.
Third, the package cleared the way for other legislation. Let's look at the big ticket items that have passed because of this bargain: Don't Ask, Don't Tell was repealed; the new START Treaty was ratified; a massive Healthy School Lunches program was launched; a huge upgrade in food safety standards was passed over industry obstruction; a bill that authorized free, low-powered radio stations passed over objections from media conglomerates; and the medical needs of 9/11 rescue workers were provided for. Yes, not everything succeeded, most notably the DREAM Act. But that is a huge wad of legislative accomplishments, and because they were accomplished legislatively rather than by executive order, they are much harder to undo.
So Obama bought off the Republicans with a hefty sack of gold for their rich contributors. The recently deceased can now pass $5 million tax free to their lucky heirs. But in return, Obama got many tangible goods and one very solid non-tangible: public approval. Over 66 percent of Americans supported the tax-cut package, and that's not even including all the other accomplishments, like Don't Ask, Don't Tell, that push approval even higher. In short, Obama, with some solid negotiating, took a lousy hand and won the pot.
Yes, the progressives are a bit upset. President Obama did not give them the big satisfying battle they craved. He went behind closed doors and negotiated with our opponents. How dare he?! Doesn't he know they are trying to destroy us? Please. Credit the man with some intelligence. All he has to do is turn on FOX for a few minutes to see how bloodthirsty the opposition is. He knows. So rather than give them the screaming match that appeals to people's worst instincts about politics, he meets them at the table and calmly discusses policy until they bargain or give up. And poll after poll agrees with him.
For all the expectations and hype, Obama is engaging in the kind of long-term narrative change that made Reagan a god among conservatives. He is changing the dynamic for the next 20 years. Obama is moving us toward a calmer legislative process. Rather than prizing the choleric, talking-heads style of the Clinton era, or the "us vs. them" mentality of the Bush White House, he is pushing us toward cherishing rational debate, the gentle clash of ideas, and the dismissal of identity politics. Yes, it's lofty, but this is how you do it. Don't give them a big drag-out fight, outmaneuver them at the negotiating table. It is different, but it's clear after the last election that we progressives could learn a trick or two.
Comments by Readers
David Camp
Dec 27, 2010Riley,
You can try to dress up an abject capitulation to the greediest people in America as “an excellent bargain” all you like but the truth of the matter is this:
1) This “deal” adds over $900 billion to the deficit, starting January 1, 2011;
2) over 25% of the tax benefits accrue to the top centile of income earners (that is , the top 1% - you know - the people who make over $450,000 per year);
3) this “deal” weakens Social Security with a highly irresponsible and weak reduction of SSI contributions - the motivation for which was to make sure everybody’s paycheck goes up in January. The effect? The SSI fund, which is in pretty good shape (ok until 2044, when even the people who won;t retire for another 15 years will be 87), is now weakened.
It’s sad to see a Democrat supporting the worst of the Bush fiscal wrecking crew’s bankrupting of the federal government because now it’s the policy of a Democratic President. Pure partisanship in support of fiscal stupidity is still stupidity,.
Obama has shown himself to be weak, irresponsible, and a servant of Mammon - he’s on the corporatist payroll and does their bidding, not ours. It’s sad to see the bankruptcy of the federal government also extends to the Democratic party, which is bankrupt of courage, leadership, responsibility, and fiscal discipline. It’s a sad sick joke.
g.h.kirsch
Dec 27, 2010Well put, Mr. Camp.
And you are probably right, Riley, “Obama is engaging in the kind of long-term narrative change that made Reagan a god among conservatives.”
But it will only make your boy Barack a demi-god with them!
David Marshak
Dec 27, 2010“Obama got many tangible goods and one very solid non-tangible: public approval. Over 66 percent of Americans supported the tax-cut package.”
Sure, another dose of “free money.” $900 billion plus the $1+ trillion deficit already in the continuing resolution. I’m sure that more than 66% of drug addicts are in favor of more drugs. The same goes for Americans and tax reductions.
Obama has bought into the Right’s paradigm: we don’t have to pay for government, we can just spend and borrow.
Obama screwed up the stimulus in 2009, as Krugman and others have explained. He gave his economic policy to corporatists like Summers and Geithner, and he?and all of us?got what we deserved.
Now Obama is trying to get himself re-elected by purchasing one good year of “recovery” at the cost of two more years of the Bush giveaways to the ruling class.
Once the new Congress is in place, we’ll see pretty quickly that Obama’s tax deal will become a Trojan horse in service of a debt reduction plan that screws the middle and working classes even more. Obama will no doubt sign on to a deal of that sort?look at the “Democrat” he appointed to co-chair his debt reduction commission?and call it a victory for the common folks.
Of course, the rub in all of this for both corporate parties is that when you reduce the capacity of the vast majority of consumers in a consumer-driven economy to consume at necessary levels, you have a demand recession, or worse. The ruling class just can’t consume enough to keep the wheels on. And where’s the next bubble?
Riley Sweeney
Dec 27, 2010First of all, great to see everybody jumping in, its great to see so many people reading my column. I understand the anger at all of our tax-dollars being siphoned off to the rich. It pisses me off too. My question for you is, is the money going anywhere? Could they get the cash from them two years down the line with a stronger senate and house? Is it essential to get it now? Yes, we need to deal with the deficit, but do we need to tackle it this year in the middle of all this trouble or can we reduce it, like Clinton did, during the boom time?
My main goal in this article, aside from stir you guys up, is to look at what Obama got in return for all the money. I know what he paid out, I wanted to see what all he got for it. That way, everyone can make their own decision about if it was worth it.
Ham Hayes
Dec 28, 2010Riley,
Obama now appears to be the King of Sausage in the porked-up sausage making capital of the world. Having ignored the very negative public opinion on his approach to healthcare reform and dealing with a seriously wounded economy, he now has to deal with the conservatives in order to govern. He didn’t voluntarily choose this new strategy, he was forced into it by the electorate.
He sure didn’t listen when he had a chance, which may be good reason to question his political savvy and competence. Time is telling, is it not.
So despite the passionate hand wringing from the political Left, the voters effectively said they would like a good recipe for their sausage, without e. coli. Pragmatic and without crooks, and make it really lean, please. I think it will get a lot harder for him to be the head chef with the new Congress.
Scott Wicklund
Dec 28, 2010Riley, Hate to rain on your parade, but I’m afraid we are
now well past the “clap louder” phase with POTUS Obama. I
speak as an early former supporter who has not seen the
“change we can believe in.” It is time for us to look else-
where for leadership as we were deceived in 2008. The New
York Review of Books has an excellent article by Paul Krugman
and Robin Wells entitled “Where Do We go from Here?”
There are so many things POTUS Obama has done which clearly
demonstrate he is not on my team. The “tax deal” is an
example of him taking off his mask showing once again as
with the bankster bailout where his true priorities are.
Sadly, for those who are concerned about Social Security and
Medicare we can expect to be reamed again in his SOU address
to Congress when cuts/raising retirement age are likely to
be announced.
These days I read Firedoglake, Democratic Underground,
Hullabaloo, Eschaton, and Dailykos to get past the D’s spin.D
Riley Sweeney
Dec 28, 2010@Scott I agree we are past the “clap louder” phase. I’m not trying to be a cheerleader. I’m not trying to spin, just gathering up a list of what he got for the payoff. I personally think it was worth it. Obviously, you guys think it isn’t worth it. Understandable.
Daily Kos is one of my first sources of news in the morning. Its like how reading a newspaper should be.
David Marshak
Dec 28, 2010Riley, your comments miss the point.
If taxes are evil, then the Right wins. This has been the Right’s game plan since Reagan. David Stockman has described this once again in his recent columns.
If taxes are the necessary price we pay to have a useful government, then we have an argument for the historic values of the Democratic Party.
Obama has not even tried to make the argument to the American people that we need to pay taxes if we want to have effective government.
Also, as we will soon see, defunding Social Security for a year will become a systemic attack on Social Security.
Scott Wicklund
Dec 29, 2010With the exception of the article author, all the comments
are spot on. The current economic crisis rivals the great
depression and POTUS Obama has not demonstrated the leader-
ship needed. Over the last two years I have become a daily
reader of Calculated Risk and all the economists linked in
the blogroll on the right side of the front page. Yves
Smith (Naked Capitalism), Dean Baker (Beat the Press), Krug-
man, Stiglitz, and the others listed show a picture of an
economy racked with high unemployment due to zero demand.
Potus Obama has only focused on large banks while refusing
help to the victims of mortgage fraud. The costs of his
Wars are gulfed by the costs of financial bailouts which
supported record bonuses for bank executives. The hedge
fund managers who supported candidate Obama in 2008 all
have their preferential tax rate in place along side the
super rich.
The Payroll Tax “holiday” robs dedicated contributions to
Social Security for the first time in 75 years, and as noted
historian Nancy Altman points out, is very likely to gut the
program over time. The antics of POTUS Obama’s Cat Food
Commission provided some comic relief while setting the
stage for the “austerity” rollout. Concerns about the
deficit are largely fraudulent as the tax package clearly
shows. New House rules by the GOP clearly show that.
The Democratic Party in its true corporate Obama incarnation
will be toast in future elections as Main Street realizes
just how screwed we are.
g.h.kirsch
Dec 29, 2010When I saw this, I couldn’t help think of poor Riley.
http://www.youtube.com/watch?v=bqsd0WNl8u0
Riley Sweeney
Dec 29, 2010Except that I don’t think that everyone that disagrees with me or Obama is a secret republican. I wish that he was a stronger progressive, we are agree there. I just feel this was a good bargain. Good discussion, guys.
David Camp
Dec 29, 2010Riley,
You won’t be getting my vote. And if you represent the Democratic Party, they won;t either.
Sometimes I think the only solution is a Hugo Chavez-style military coup - I mean among junior officers that still have their honor intact, not the corrupt lying generals like Colin Powell. Why? Because the political parties are either outright servants of the complex (Republicans), or so weak and useless as to sell out their constituents at every opportunity (democrats).
This is not America’s shining hour - more like a banana republic, where the elite is busy offshoring American jobs in order to increase their wealth. An elite that is traitorous.
COnsider Halliburton - beneficiary of hundreds of billions of no-bid federal government contracts. Their current status? After taking their ill-gotten gains at public expense, they relocated to Dubai, where they pay no US taxes at all.
Halliburton is a traitor to America. Halliburton should be the target of US military appropriation. Halliburton and its shareholders are traitors and deserve the traitor’s just reward.