Oh boy…
So we pick up more seats then we have in decades and this “compromise” is what we get?
President Obama outlined the “framework” of a deal with congressional leaders for a temporary extension of the Bush-era tax cuts in all income tax brackets, a compromise that he said would avert the “chilling prospect” of a tax increase next month for all Americans.
Obama, at a White House news conference Monday evening, renewed his calls for tax relief targeting the middle class and his criticism of making tax cuts for the wealthiest Americans permanent.
But in the end, he said, a compromise must be reached before the Bush-era tax cuts expire at the end of the year, or else ordinary Americans would become “collateral damage for political warfare in Washington.”
“I am not willing to let that happen,” he said.Obama outlined a deal with congressional leaders that would extend the expiring tax cuts for all Americans temporarily for two years. Unemployment benefits for long-term jobless would through next year. The estate tax rate would be renewed at the previously lower rate temporarily.
The Obama administration also is proposing a one-year payroll tax reduction that sources say would cut the amount contributed to Social Security from 6.2 percent to 4.2 percent.
“I have no doubt that everyone will find something in this compromise that they don’t like,” he said, but “we cannot play politics at a time when the American people are looking for us to solve problems.”
Check out the video at Hot Air of Obama sounding so irritated that he had to work with the opposition. Krauthammer believes it was a speech directed towards the Kos kiddies and DummiesU crowd, maybe so, but this deal is not what we should of accepted.
And Ramesh Ponnuru described the speech succinctly:
Takeaway: Obama is better than those nasty Republicans, and also better than those Democrats who won’t cut deals with them.
As for the deal itself, we all know spending needs to be cut and knowing this we agreed to extend unemployment. This makes sense? Hugh Hewitt:
This is like TARP without the urgency of a genuine financial crisis pushing the bill forward. GOPers who vote for this will find that vote stapled to them for years to come, or until they lose to a primary challenger in 2012.
This goes to the inability of the GOP to ever fight on key issues, and reflects the same ill-considered negotiation strategy that led to the Gang of 14 and the immigration compromise of three years ago. The country just voted overwhelmingly for low taxes and spending cuts and the GOP just agreed to much more spending and temporary tax cuts which will not provide businesses with the environment of stability necessary to investment and job growth.
The scope of this miscalculation is deeply dispiriting.
Agreed. But Grover Norquist makes some compelling arguments for the deal:
Grover Norquist, president of Americans for Tax Reform, tells National Review Online that a tentative tax deal between President Obama and the GOP is “a much bigger victory than people see” for the Republicans.
Of course the deal isn’t perfect, Norquist says. He would have preferred a permanent extension of the income tax rates as opposed to just two years, but thinks Republicans should be thrilled at the prospect of revisiting the tax debate in 2012, when Obama is up for re-election, especially when the agreed-upon extension of jobless benefits will ensure that the unemployment rate remains artificially high.
~~~Norquist says Republicans should be especially pleased with the proposal to re-establish the estate tax at a rate of 35 percent (for two years), given Democrats’ desire to return to a permanent rate of 55 percent after going all of 2010 without any estate tax whatsoever. “Think about how badly Democrats wanted [a return to a 55 percent rate],” he says. “They were willing to suck it up for a whole year…all those lucky dead people who weren’t sufficiently looted.” Now 35 percent becomes the new baseline, and Democrats are fighting a losing battle.
If the Democrats are losing this fight now, with large majorities in both houses of Congress, it will only get much worse for them when Republicans take over the House and install a filibuster-proof coalition in the Senate in 2011, as the debate over taxes continues in the next Congress.
And Chris Edwards from the Cato Institute also makes some good points:
● The extension of unemployment benefits is bad policy, which, ironically, will hurt the Democrats politically, because it will keep the unemployment rate artificially high.
● It’s good to get the tax-cut extension enacted now so that the budget focus next year can be spending cuts and more spending cuts.
● The end of Obama’s Make Work Pay credit is a good thing, because it was mainly just a spending subsidy program hidden in the tax code.
● The next tax deal between President Obama and the GOP should be to enact the fiscal commission’s corporate-tax-rate-cut proposal.
● The unified front shown by Republicans on this tax extension was very important. Centrist deficit hawks dream that Republicans will just give in and sign on to big tax hikes in some future budget summit, as occurred in 1990. Today’s news suggests that won’t happen for the time being.
● The message of the election was not that Americans thought that their taxes were too low, but that the government was too big. If the Republicans can show a similar united front on spending cuts next year, we could really make some budget progress.
So I have to say I’m torn on this one. We won a huge election recently, much of it because of the fiscal irresponsibility of those in power, and this is what we got?
I just can’t see this as a win for our side.
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