My careful reading of this is that the Republicans are open to some small tinkering with the Estate Tax to appease House Democrats but that there won’t be much movement from the deal the White House hashed out with Senate Republicans.
Personally, I think the fiscally responsible thing to do is to let all the tax cuts expire. But that’s a long-term thing. In the short-term, we have to find a way to stimulate the economy in any way we can, and raising everyone’s taxes is going to do the opposite. I don’t think the Republicans give a shit either way. If they get their deal, they’re happy. If they don’t, they’ll just cut taxes on their terms next year and try to take all the credit for it. If the economy suffers and unemployment climbs back up, they’ll be like pigs in shit. They feel like they’re in a no-lose situation and they’re basically correct.
The House Democrats are standing their ground for now, and they can probably force at least some small concessions on the Estate Tax, but not on the income tax rates. That’s my guess. What do you think?
“no lose situation” because they have they have the President of the United States backing their play.
I want a President who doesn’t bend over and grab his ankles every time he encounters a Republican with a hard-on.
As for Biden’s “take it or leave it”, I’m very proud of the men and women who said they’d leave it.
This administration is a total disaster.
For real. I guess this is the “the GOP won’t impeach one of their own” gambit.
It’s Christmas, and the President and the Republicans want to pass the deal. And the Democrats don’t want to be cast as the Grinch, especially with the unemployed. So it is must pass legislation.
And the ornaments are coming down from the attic. First out, the ethanol tax credit. Expect more sparkly things for special people.
If I was pushing for something, its would be to eliminate the payroll tax income cap in exchange for lowering the rates to an actuarial level.
Oh, and have Congress show how it is sharing the sacrifice by lowering its salary to the median family income of $49,777.
But then, I’m getting a lump of coal for Christmas. (That’s what’s known in DC as “Emergency Energy Assistance”)
thing that could be usefully added is extending support for the Buy America Bonds, which have been very helpful for the States. With the States looking at more red ink, extending support would help avoid layoffs at the State level.
Oh, but I understand that the Republicans are DEAD SET against this bond thing. They want to kill this, as part of the “starve the beast” strategy. They are attempting to get states to declare bankruptsy, so that they can break union contracts and re-jigger the pension system.
While I don’t like a lot of the compromise, we have 7 million people who would lose their unemployment benefits if this compromise is not passed. In addition, we need to free up the Senate to get DADT repeal and the DREAM Act passed during the lame duck session. Finally, the outcome will be even worse on the tax and unemployment issues if we wait until next year.
So, we need to buck up, get this compromise passed, and then spend the next two years making clear to the public that we fought for the unemployed and the middle class, while the Republicans held those folks hostages in order to get more tax cuts for the wealthy elite.
“Pigs in shit” is a great metaphor and basically DC in a nutshell. Yes, GOP does not care either way.
First time commenting here: great blog and commenters.
Now, I’m what you would call an O-Bot. I support Obama and I could go on for quite a while on why I think Progressives are wrong about him. But like you, Booman, I think these tax cuts should expire. Using the New York Times little tool, letting them expire got me 70% of the way towards solving the deficit problem. It’s that big. It’s that useless. I see why Obama made this deal and I think he’s likely right about the short-term benefits of the deal.
That said, if the Democrats scuttle this deal, and the tax cuts expire in January, the Republicans lose all their leverage and it’s better long term for the country. The downside is a lot of real people, family members of mine, will be hurt by the loss of their UE benefits. I don’t envy the choice.
(By the way, the easy solution would be to stop letting the GOP into power, but that would entail not railing about how every Democrat is a sellout and the worst thing ever.)
Redirect TARP to UE benefits like the Republicans wanted a week ago. Funds have been repaid but TARP is still set up as a revolving fund. (That is, if Timmeh is not holding on to it to hedge against Citibank failing.)
Republicans gained seats of Blue Dogs who bucked Obama’s agenda and progressives who lucked out riding Obama’s coattails in conservative districts. Being a “sellout” was not an issue in most Congressional Districts. I don’t know who’s feeding this idea but it is wrong.
I agree with you about the tax cuts.
Alan Grayson is a blue dog?
Progressive who won in a conservative district, like Tom Perriello in Virginia
What I’m saying is that Democrats took a beating in general. If we want to avoid that in 2012, we have to work at it.
Look, I keep having this argument, and I’m tired, so I don’t want to have it again right now(especially as I just joined this group), but I think Progressives are going to wake up in 2012 with a terrible surprise and a new President, and it’s going to hurt like hell. I don’t care whose fault it is. I support the President. Some people don’t. I would like to think we still agree he’d be vastly superior to a President Palin, but I am starting to doubt that everyone agrees on this anymore, and I find it depressing.
Not likely. Obama is going to win re-election after two years of a Republican House. But the country is going to suffer for two years. There are not candidates that from a progressive point of view can do better and be elected. Democrats have a thin bench after 42 years in the wilderness.
But the Republican bench is thinner. Now that John Thune has taken himself out, the only serious challenge is Michael Bloomberg running as a third-party candidate. And that just might cause the Republican candidate to come in third.
“Republicans gained seats of Blue Dogs who bucked Obama’s agenda” – Something makes me want to change this to “Republicans gained seats of Blue Dogs who set Obama’s agenda.”
Unabogie,
For your first comment, you done good.
I hope you present your thoughts on a regular basis from now on.
Welcome
13 months of UI extension for two years of tax breaks for the wealthy is a bum deal straight up. Even two years for two years is not good enough. Throw in estate tax breaks and the beginning of the disembowelment of Social Security, and it is really, really disastrous.
We couldn’t do adequate real stimulus when it was possible, because of the deficit. Now that we can’t get real stimulus, the deficit doesn’t matter and this is our ersatz kinda stimulus. This is a Republican game all the way and Obama is playing it.
It has been really hard for progressive House Democrats to go against a Democratic president, but no one will ever take them seriously unless they block something the President wants. They have been voting for these ‘best-we-can-do’ deals for the best part of two years. If laying the legislative groundwork for destroying Social Security is not a hard line, then there is no Democratic Party worth worrying about. I think House leadership understands this. I think, like a lot of Democrats, they are getting a little fed up with our better-than-a-Democrat President.
As Pelosi reminded people today, the Senate has a tax cut bill for the middle class without all of these disasters included already in their court. People should not discount the roles David Obey and Louise Slaughter can play in how the Obama-McConnell Deficit Explosion Bill gets to the floor. Neither signed the Welch letter, but interested leadership seldom would. That doesn’t mean they like it and will promote it.
It sucks that the unemployed (among whom I am currently numbered) are stuck in the middle, but the alternative is to let the Republicans say that this POS was passed when the Democrats were in charge of everything. Let the new Republican House pass it if they like, and then discover if Senate Democratic leadership can see the same hard line the House Dems can see. Let’s find out if Bernie Sanders and a few other Senate Dems have the stones to do what Republicans have done every damned day for two years: block, delay, take a point of privilege, threaten filibuster, and whether Harry Reid lets them do it. The Senate is, and always has been, where the real crunch lies.
If the progressive caucus doesn’t stand firm, they are going to lose their white members in 2012. And maybe some of their Hispanic and African-American members through primaries.
Booman,
What do you think about the issue of the debt ceiling that some have been talking about of late? As I understand, this is not part of the deal, and come March or whenever the issue comes up, they can just hold us all hostage again. If not then, then the next time the unemployment runs out. What gives you the confidence that Obama will fight to save Social Security when the very commission that he himself formed is calling for carving it up?
I often agree with what you say, and I learn a lot from reading your posts; I think have internalized many of your views, but the constant harping on “the left” always pouting just seems to be missing the point of their arguments. You yourself were saying (I think it was last week or the week before) that it was time for Obama to fight. It seems like your view changed after reading Ezra Klein’s piece about the deal.
I don’t really see “the left” or “progressives” or “the Netroots” as pouting, so much as a view that Obama is miscalculating, misreading the electorate. As you stated when you linked to Sargent, Obama’s goal is to position himself between the crazy’s on the left and the right, but we all know now that there is no one on the left right now who reaches the level of insanity being expressed on the right. So, it seems to me that Obama is playing along with the same kind of misconception that we hear pundits on TV utter all the time: “The extremes on both sides are equally bad. The only true path is the centrist, bipartisan one.” Is this the Buddhist Middle Way or just bullshit? How is what he’s doing any different than David Broder?
I think part of the problem is that Obama doesn’t use his bully pulpit enough to challenge the misinformation spewing out from the other side. Just look at his handling of the deficit issue for example. Instead of challenging the view that the deficit is the single greatest threat facing humanity, he buys into the need for austerity measures. He puts together the “bipartisan” deficit commission. Like others have said, why not a jobs commission made up of various experts. Channeling Governor Christie, he freezes the salaries of federal workers, even though many economists say this will have very little effect.
It really is not just people who call themselves progressives who are getting mad with Obama’s modus operandi. My parents, for instance, have been lifelong Democrats. They thought of themselves as liberal, but also as moderate Democrats. They were Democrats, but they didn’t hate all Republicans (most, but not all).
The strategy for the Democrats always seems to be to aim at the middle, try to win over independents, with the belief that independents are all centrists.
The anger is not just that Obama isn’t listening to self-styled progressives; it’s that he doesn’t seem to be taking advice from anyone outside a small circle of advisors with certain engrained views, particularly his economic team.
Good post.
I’m watching football right now, so I am not going to address all your points. But I want to make one thing clear.
I see what goes on in Washington DC as mainly a matter of math with a little strategy and some tactics thrown in.
It’s true that the Republicans only have 42 senators. But if you look at who is up for reelection in 2012, only Scott Brown and John Ensign are truly vulnerable. If we’re lucky, we can maybe take a run at Jon Kyl’s seat in Arizona. So, they have 39 members who have absolutely nothing to fear from the Democrats and there isn’t a damn thing Obama can do about it. In fact, members like Orrin Hatch and Dick Lugar who have worked with Democrats on important legislation in the past are now facing serious primary challenges from their right. There is an almost infinite imbalance pushing the republicans in the Senate to the right.
It sucks to admit it, but we have no answer for this. I’d argue that filibuster reform would help but we’ll never succeed because guys like Inouye are wedded to the system. Even Feingold said he was against doing away with the filibuster.
So, all this talk about how things would be better if only the president or Harry Reid did something differently are mostly bullshit. Even where it’s true, it’s only true in the most marginal way.
If Obama shape-shifted into LBJ he’d still be facing a Senate that simply refuses to vote for cloture for anything.
Obama is not perfect and there are things he can do as the head of the executive department that he hasn’t done. But when it comes to dealing with Congress, he’s been sensationally successful given the absolutely unprecedented obstruction and the magnitude of the challenges he’s faced.
So, that’s my perspective.
We are going to need the filibuster to prevent immediate disaster in 2013. Never could support its abolition and still don’t. Sucks.
But Obama and the Dems could have done ten times as much as we have done these past two years, and Obama still could use the presidency to do a lot in the next two years – administrative, prosecutorial, executive orders etc. – if he wanted. But I see no sign that he does. What a waste of our last good opportunity before things get really bad.
Here’s a reasonable change. Make the filibuster supporters have 40 votes to continue the filibuster, while only one is needed to call a vote. At this time, the onus is on those who would end the filibuster. that small change would bring the cots back to the Senate. Good change.
In addition, eliminate the ability of a single senator to hold up appointees. Judges should not be filibustered either.
Thanks. I think why I read you is that you look at the bigger picture, that it’s not just Obama acting in a vacuum or as a king. What factors are tying his hands? I certainly plan to continue supporting Obama, but it all just gets frustrating at times, and I wonder if the Democrats had dealt with the Bush tax cuts earlier if we might have avoided this conundrum. But, I guess they held back before the election to protect the Blue Dogs in the House (or was it Feingold) who lost anyway.
I think this post by Digby citing Kevin Drum citing Andrew Sabl is helpful for understanding where we are:
http://digbysblog.blogspot.com/2010/12/liberal-dilemma-they-wont-kill-hostages.html
What position are we to take as liberals/progressives: that of civic republicanism (“the fundamental issue of our time is the ability of the rich, and corporations, to game the political system and prevent the rest of us from exerting true self-governance”) or the non-republican liberal position (“giving material sustenance to the poor is more important than whether the rich get paid off, however regrettable and undeserved that is.”)
As Digby writes: “Democrats are always in the position of having to choose between some specific thing that will alleviate some suffering (however temporarily) in exchange for some heinous Galtian thievery and they end up taking the short term relief because they believe they have the responsibility to help people in the best way they can. Unfortunately, when dealing with nihilists, you end up creating more and more circumstances where such deals with the devil are necessary.”
I am reminded of Jigsaw from the Saw movies, who puts people in virtually unescapable traps, where they are faced with the existential decision of life v. death, and the only means of escape is to commit the most heinous, unthinkable of acts, like killing another person or even cutting off one’s own leg.
people like Snowe and Collins have to be looking at the 2010 Elections and worrying as much as a primary from the right as they are about losing a general election.
Leave it. Don’t use the stimulus argument, Booman. Where was Larry “PASS THIS OR WE DIE!!!” Summers when we needed more stimulus? Why didn’t his economic advisers go around saying “we risk a double dip if we don’t pass this mother”?
We will not be able to raise the payroll tax back, nor will we be able to raise the estate tax back where it should be.
The most responsible thing to do for Americans and the country is to let them all expire.
Exactly. The stimulative effect of this are being oversold. Even Mark Zandi has noticed.
Deal with the unemployment insurance benefits by reprogramming money from somewhere else. I believe that the Executive Office of the President has a sizeable discretionary fund for “emergencies”. This economy is an emergency. Reprogramming could possibly cover things until the spring. And then put the onus on the House.
Joan McCarter has the gory details of the choice:
The Obama-Republican tax deal in picture form
My biggest gripe about using tax cuts for stimulus is this. You get a deficit effect and in this case a substantial Keynesian effect, but it is an immediate sunk cost. Investments in infrastructure and education pay back in greater productivity for business in the future, cost savings that can be recaptured the Keynesian higher taxes (that’s the part of Keynesianism that folks forget about) exactly at the point at which a bubble might occur. You have taxes take the punch bowl away instead of the Federal Reserve; the monetary policy can be used to refine the countercyclical action.
The tax cuts were the biggest free lunch in history for folks who did not need it. Enough is enough.
It’s as if Obama’s team was in a coma for the last 18 years. “The Clinton tax increase is a job destroyer!!!” “The Bush tax cuts will raise all boats!!!”
They’re not even pretending to be Democrats any more.
My favorite, from my GOP buddy on the House Banking Committee: “Raising taxes on the rich won’t make any difference in lowering the deficit.”
Also, why did we elect a Democratic president again?
He’s using Simpson-Bowles as a model for tax reform. I expect lower rates for individuals and less deductions. The latter is fine, the former is not:
That’s confusing to me. You want more revenue, so you remove deductions. Ok, that’s fine. But then you lower rates, too?
If he’s going to push this, liberals need to be ready for a back-up plan: pushing for a carbon tax should be our number one priority.
Look at his campaign. It’s like Dr. Jekyll and Mr. Hyde.
The simple, obvious way to stimulate the economy and to START reducing the deficit: raise taxes on the upper class and leave the lower brackets for the middle class and the poor. A reinvigorated economy will eventually produce more tax revenues and help decrease the budget. Obama is on an ideological trip of Reganomics, he seems to have little interest in social principles. By the way, everywhere we hear about the middle class and the upper end or whatever (upper crust!). Why doesn’t the president talk about the upper class and the lower class, the rich and the poor? That’s what it’s all about. Right, we’re all middle class of ‘upper end’. The polite euphemisms don’t get is anywhere. What a crock. He’s into pompous abstractions and we’re left holding the stinking bag of rotting reality.
He’s doing Reaganomics in a Herbert Hoover economy. Herbert Hoover did that too.
No deal. Arrest and prosecution of the GOP for conspiracy and domestic economic terrorism.
Yes, why would anyone appoint a Deficit Commission when we have a $14T DEBT AND $1.5T DEFICIT AND EVERY COUNTRY WE BORROW MONEY FROM IS PUBLICLY EXCORIATING THE US PUBLICLY AND OFTEN & MOCKING US?? WHY WOULD HE DO THAT TO US?? WAH WAH
HOW UNREASONABLE CAN ONE MANCHURIAN CANDIDATE REPUBLICAN PRESIDENT BE?? (Latest & most popular Netroot MEME) WE DON’T NEED RETHUGS BECAUSE “PROGRESSIVES”/NETROOTS HAVE ATTACKED THE PRESIDENT RELENTLESSLY FOR 1 1/2 YEARS!! LOWER THAN SLUGS YOU ALL ARE AND WATB! Just so selfish and immature and unreasonable. I wish he’d just say FU and walk away and not look back. NEVER has a president been attacked by his own side this early & viciously. His own damn side………..Don’t dare acknowledge you might agree with him or support him on something because YOU WILL BE EXCORIATED FOR IT! So go for it Netroots and/or progs. Destroy me!
You don’t need a deficit commission to figure out how to end the deficit, and they really can’t, as this one proved.
You just need to cut spending, raise taxes, or increase economic activity that increases the tax base. It is not that hard to figure out where. And that’s pretty obvious too.
Taxes:
Raise taxes on those who make over $1 million
Establish a carbon tax
Establish a financial transactions tax
End tax breaks on fossil fuels
Put in tax breaks for renewables like solar and wind, especially offshore wind.
Spending cuts:
End the military occupation of Iraq
End the war in Afghanistan
Cut $100 billion from DoD procurement
Cut out subsidies to help corporations export jobs.
Expanding the tax base:
Replace the entire federal fleet of standard automobiles with American-made hybrids or electric vehicles.
Increase Social Security payments to a base that those who receive the lowest benefits can live on
Convert to a single-payer health care system
Forgive student loans and establish a higher education grant program
Provide the same benefits to workers that other developed countries do.
It hasn’t happened because there has not been the political will to do it among Democrats. It is one of the jobs of Presidential leadership to lead and unify his party.
The rest of your screed goes on another progressive site not this one.
Never has a President played against the interests of his base more than this one.
There is a lot that I support him on as matters of policy; it’s his failure to deliver because of the divisions in his party that I criticize him for. And his short-term deal-making focus that ignores future consequences.
Never has a President been so reluctant to divide the opposition to his programs.
That said. It is likely he will win re-election in 2012 because there is no one of his stature who will primary him. And because the divisions in the GOP will cause them to nominate another losing candidate. What we must be doing in the next two years is focusing on electing progressive Democrats to Congress. That effort will create reverse coattail effects in some areas and coattail effects in others. And if we win back the House, will strengthen the ability to enact the agenda that the President ran on.
The problem is, the longer the President continues a strategy that demonstrably is not working, the harder to get him a Congress that supports him becomes.
It’s time to stop namecalling on both sides. Some of the accusations of being a Manchurian candidate and Republican President come from folks who didn’t vote for him in the first place. Some comes from plain out frustration with his stubbornness in refusing to change course and argue his Democratic case forcefully instead of his bipartisan hopes.
no offense, but if they want to go to the wall for something, why don’t their asses go for relief for the 99ers. add one more tier, lasting nine months.
THAT is worth going to the mat for.
the estate tax?
am I wrong in saying – this is the same deal they offered the GOP for over a year….
Exactly.
Relief for 99ers, extension of UI benefits tied to the unemployment rate so that it doesn’t become a perpetual political football, and increased UI tax rates on employers who shed employees too quickly or too persistently.
Elimination of the payroll tax salary cap and cut of payroll tax to actuarial sound level after considering revenues from the elimination of the cap.
Restoration of the estate tax and an increase in the tax rate, which will provide incentives for donations to NGOs working in a variety of public civil society projects and on economic relief.
Don’t know about the “same deal” stuff because the GOP has been moving the goalposts in each successive round of negotiations.