Obama tax deal looks better to me

I'm still deeply disappointed in Obama and the Democratic leadership in Congress. They had plenty of opportunities the past two years to fulfill one of Obama's central campaign promises: repeal the Bush tax cuts for the richest Americans, and keep the middle class tax cuts.

But I wrote my "Send a message to Obama: unsubscribe from OFA" post before all of the details about the deal with Republicans were released.

I haven't changed my mind about Obama being a weenie, or the desirability of telling Organizing for American to take an email hike. However, I'm finding more things to like in Obama's quasi cave-in to the Republican leadership.

As David Leonhardt says in "For Obama, Tax Deal is a Backdoor Stimulus Plan," the deal does quite a bit to improve the economy -- even though the giveaway to millionaires and billionaires makes me want to barf.

Mr. Obama effectively traded tax cuts for the affluent, which Republicans were demanding, for a second stimulus bill that seemed improbable a few weeks ago. Mr. Obama yielded to Republicans on extending the high-end Bush tax cuts and on cutting the estate tax below its scheduled level. In exchange, Republicans agreed to extend unemployment benefits, cut payroll taxes and business taxes, and extend a grab bag of tax credits for college tuition and other items.

...Initial estimates by economists suggested that the overall legislation would reduce the unemployment rate by one-half a percentage point to a full point over the next year, compared with allowing all the tax cuts to expire and passing no new stimulus. By the end of 2012, the decline could be up to 1.5 percentage points, economists said.

Hopefully the deal will be improved by disappointed Democrats in the House and Senate before it is passed. I'm coming to agree with a New York Times editorial, "Voting for an Odious Tax Deal," though. As bad as Obama's deal is, it could have been a lot worse, and needs to be accepted for a glass half full -- not rejected as a glass half empty.

Liberal Democrats are in revolt at the tax deal that President Obama struck with Republicans on Monday, and it is not hard to understand why. By temporarily extending income tax breaks for the richest Americans, and cutting estate taxes for the ultrawealthy, the deal will redistribute billions of dollars from job creation to people who do not need the money.

But the Democrats should vote for this deal, because it is the only one they are going to get. Mr. Obama made that case — strongly — on Tuesday, summoning an eloquence that is often elusive, as it was on Monday when he first announced the deal. Without this bargain, income taxes on the middle class would rise. Unemployment insurance for millions of Americans would expire. And many other important tax breaks for low- and middle-income workers — including a 2 percent payroll tax cut and college tuition credits — would not be possible.

If angry Democrats blow up the deal, they will be left vainly groping for something better in a new Congress where they will have far less influence than they have now. The middle class and the unemployed would be seriously hurt.

Comments

[Rain]

How one sees it all depends on how one sees the importance of Social Security being funded through payroll taxes. This cut will never be restored and we know the system already is in shortfall. Many want it gone. This is on the road to that. He could have cut taxes on the bottom earners by increasing the earned income credits which by the way they say this will make some low income earners actually getting less of a benefit. The other thing is how important is the deficit. I am still disgusted with him and since he put Geithner and Sommers in charge of finances, I've worried about what that meant. I think we are beginning to see.

[Jack Bog]

This is a complete disaster, and a sellout. You were right the first time.

[Blogger Brian]

Jack, I can understand your position. Maybe I'm more Obama'ish than I thought when I wrote my first critical post about the tax deal.

Meaning, in some ways this is a question of idealism vs. pragmatism. I fly both ways, depending on my mood. It seems that Obama is a similar sort of bird.

Listening to POTUS on Sirius satellite radio yesterday (my favorite political talk channel, because it is intelligent and factual), a caller from Washington DC who the host identified as a frequent and knowledgeable commenter on POTUS ended by saying this:

Whatever the flaws of the tax deal are, they're vastly better for the country than a President Sarah Palin and Vice-President Mitt Romney (or the reverse).

He felt, and I agree, that the economic stimulus benefits and political plus'es of this deal (for independents, particularly) outweigh the negatives.

I seem to recall that he said Obama is playing chess, not checkers. That is, his current moves are part of a long range strategy. Viewed in isolation, it looks like Obama is sacrificing a lot. But time will tell to what extent this is true.

Reasoning, neuroscientists tell us, isn't mainly logical. Or, conscious. All I know is that I started to feel better about the tax deal the more I learned about it. I can supply reasons for that feeling, but my intuition is more real than the reasons -- if you get what I mean.

You might be right. This deal could be a disaster for the country, Obama, and the Democrats. I just find myself more optimistic.

[Rain]

I don't trust Obama and no longer am even sure it's better that he's in the White House. Suppose he'd have lost, then we'd still likely have a Democratic majority and maybe super majority in the Senate, enough to do what is required and even override vetoes. It's not like I wanted the nut that is McCain or the disaster that is Palin but to have a Democrat do this to us is worse. And too many times people do rollover because it's their guy. We should not. I am extremely proud of DeFazio standing up to fight this and it makes me very happy we donated to his campaign even though he's not in our district.

I read Obama also said SS didn't start out as a pension system but as help for widows and orphans. That doesn't sound good for his intentions toward it and he is wrong about its history. I don't trust him at all and my distrust began when he appointed who he did to the economic leadership. It's disheartening to say the least.

[Roger]

I hope the Democrats continue to fight the Obama Tax Deal. I would prefer to see it fail during this lame duck session.