It was tough times for progressives before President Obama announced his tax-cut "compromise" with the GOP this week. The Democrats were routed in the midterm elections, tea party zombies were in ascent, and the inspiring change-candidate of 2008 wasn't looking too triumphant. Then came the deal, and many on the left became apoplectic, accusing Obama of caving to the obstructionist Republicans. After all, he had indeed yielded on an article of faith for the left: George W. Bush's tax cut bonuses for the well-to-do had to go. Perhaps even worse, Obama had reached this hard-to-swallow accommodation without forcing the just-say-no GOPers into a showdown. (Former Labor Secretary Robert Reich denounced the deal as an "abomination."
) But after talking to several top administration officials, I've become a tad more sympathetic regarding Obama's decision to negotiate this pact.
The agreement is indeed ugly. In exchange for decent policies that can help mid- and low-income Americans -- temporarily extending the Bush era tax cuts for middle and lower brackets, continuing a variety of refundable tax credits, cutting payroll taxes, extending unemployment insurance -- Obama accepted a high price: a two-year extension of the Bush tax cuts for the wealthy and generous breaks on the estate tax for the well-heeled. Essentially, the swells will benefit much more than hard-pressed commoners.
Here's how it breaks down
: Obama's desired provisions will provide about $214 billion in tax cuts and benefits to 156 million people, and the GOP's treats will dole out $133 billion to 4 million. You can do the math without a calculator and see that those poor rich folks will be handed oodles more than the rest. One comparison: On average, people with more than $1 million in income will end up with an extra $140,000. A taxpayer in the $40,000-to-$50,000 range will receive $1,679. You may ask yourself, why do millionaires and billionaires warrant more pocket money, particularly when it's generally accepted that spreading cash among the rich is not effective economic stimulation
? The answer: That's what Republicans want. And Obama is right: They held the rest of America hostage -- no cuts and benefits for you, unless there's "relief" for the gazillionaires.
Liberal House Democrats and other progressives are enraged about this -- and rightly so. The House D's on Thursday passed a non-binding resolution that decried the deal; dozens of them have vowed not to accept it unless amended. They want a fight. And they yearn to see Obama be at least as ticked off at GOP obstructionists as he is with his on-the-left critics (whom he testily chastised at a press conference earlier this week).
I'd like that, too. The White House and the Dems should have gone after the Republicans on this months ago -- before the election (even if some D's thought such a brawl would not boost their reelection prospects). Obama has not succeeded in an important mission: depicting the Republicans as extremists who routinely block attempts to revive the economy and who care mostly about easing the tax burdens on millionaires. This accord would have been far more palatable at the end of a fight, rather than as a substitute for confrontation.
But come this point, Obama had to play a lousy hand -- even though it was a hand he had a hand in dealing. And here comes the sympathy.
In meeting after meeting, during which the president and his aides discussed his options, Obama repeatedly asked if anyone could guarantee that were he to put up his dukes, go to the mat, and play chicken with the GOPers, mid- and low-income Americans would end up with the breaks and benefits he believed they need. If he went nose-to-nose, mano-a-mano, and the R's didn't blink, they'd be nothing for nobody -- and the Bush tax cuts would end for the middle class, mean that come Jan. 1, hard-working Americans would see a smaller paycheck. To make matters worse, this might have an anti-stimulative effect on the economy.
Then what would happen? He might be able to win the blame-game against the Scrooge-ish Republicans -- which would be a significant victory, especially heading into the next Congress. But there would be no action until next year, and any tax-related bill would have to originate in the Republican-controlled
pass a Senate with a larger and more tea party-ish GOP caucus. It could take weeks or months to hammer out a package. What were the odds it would contain as much assistance for the non-rich? In the meantime, working-class Americans would be contending with less money. That is, hurting more.
So at this late stage of the game, in the dwindling moments of the 111th Congress, should Obama have been willing to put those Americans on the line in order to do battle with the nefarious Republicans? Had he done so and won (forcing the GOPers to forgo the the tax bennies for the rich and to accept tax cuts and benefits, including unemployment insurance, for others), he would have saved the nation a lot of money and not established some dangerous precedents (such as the more generous exemptions for the estate tax). He would have served several valuable principles: We don't pay off the rich to help struggling Americans; we don't negotiate with hostage-takers. It would have been glorious. But had he failed, he might not have been able subsequently to work out a deal with the benefits of this one. As the nation has learned, the Republicans cannot be shamed into supporting measures that help besieged Americans -- but they can be bought off.
Of course, no one can say how such a titanic clash would have climaxed. But Obama is the lonely-at-the-top fellow who is responsible for the well-being of the citizenry. It's his job description. If you consider this moment from that perspective -- even if he miscalculated his way to this, uh, decision point -- it's a tad bit tougher to pummel him. Sure, this deal is causing havoc, dividing the Democratic Party as well as his base. (As I was tweeting Obama's press conference this week, half of the responses were vituperative denunciations from past Obama supporters now accusing him of selling out; the other half were hurrahs from Obama backers who cheered him as a pragmatic hero doing his best to overcome ungodly GOP intransigence.) Yet once again, Obama appears to have lost the narrative war. The immediate storyline, right or wrong, was that the Republicans rolled the president.
It's not hard to see why the guy who had to make this difficult call opted not to go nuclear. Obama was engaged in asymmetrical warfare, He apparently worried about what would happen to the unemployed and put-upon Americans without a deal. The Republicans didn't. This put Obama at a disadvantage. I don't counsel anyone not to criticize the package (and how Obama steered himself and his party into this corner). But I can almost feel his pain.
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