It’s been clear for some time that President Obama made the political calculation that he does not want any of the Bush tax cuts to expire. He doesn’t want to be the guy in 2012 running for President on having “raised taxes during a time of recession.”
But the President also doesn’t want the political blowback of angering people who cheered him on the campaign trail when he promised to let the tax cuts expire. And so rather than just come out and just say that, he’s been actively trying to kill a Chuck Schumer deal to keep them from expiring on income of more than $1 million a year. It was a plan that put the GOP in an awkward position, and had thrown them off message in recent days — hard to be the people fighting for the 315,000 families who fall into that category over the 2 million set to lose their unemployment benefits by the end of the year.
The President argued against the Schumer deal, we are told, because he was concerned about “the cost [to the deficit] and the risk of redefining the middle class as those making over one million.”
Okay, let’s look at the numbers. I’ll use Jonathan Cohn’s, because they’re the most conservative I’ve seen:
|Proposal||Amount added to the deficit over 10 years||Cost of addition|
|Extending tax cuts on income up to $250,000||$3.2 trillion||–|
|Extending tax cuts on income up to $1 million||$3.6 trillion||$400 billion|
|Extending all tax cuts||$4 trillion||$800 billion|
So the President who is “ready to accept” a deal to extend all tax cuts “temporarily,” at a cost of $4 trillion dollars to the deficit over 10 years, doesn’t want to accept a deal that would cost $3.6 trillion because it’s important to limit the cost to $3.2 trillion.
Come on. Let’s stop pretending. Obama didn’t want any of the tax cuts to expire, just as he didn’t want a public option in the health care bill. But he doesn’t want to say that, just like he didn’t want to say he had dealt away the public option. So once again, he expresses his “support” for the promises he made on the campaign trail, while he accepts the political reality that inevitably leads…. to what he really wants.
The hard part is always orchestrating the “political reality” that leaves Obama no option but to do the thing he really wanted anyway, especially when his party controls both houses of Congress (See: Countdown to Lieberman)
Obama is not a “poor negotiator,” as some would have. He’s getting exactly what he wants, just as he did in the health care bill. And the naked truth of his cynical charade has become horribly, gapingly obvious.
Did They Ever Want to Let the Tax Cuts Expire in the First Place? No.
If the stigma of raising taxes bugged you (it didn’t bug the last Democratic President, who won re-election after raising taxes) or if you thought the economy couldn’t take the hit, you could always go back with some shiny new “Obama tax cuts” later. You could have decoupled the tax cuts on the first $250,000 of income with the rest. You could have done any number of things. But the truth of the matter, the ugly truth, is that all that campaigning in 2006 and 2008 was a clown show. There was no real intention to raise taxes on millionaires.
According To Plan
If they had been serious about doing what Obama ran on they could have gotten it done as an economic imperative in the early heady months. And the Republicans would have had no choice but to vote for extending the middle class tax cuts a year and a half ago when the millionaire tax cut would have still been in place. The only reasonable explanation for not doing it is that the Dems never really wanted to decouple them in the first place.
Now we are told that the President is negotiating a “deal” that includes an extension of all the tax cuts — in exchange for extending unemployment benefits.
It appears that the plan, all along, was to hold the extension of unemployment benefits hostage so those in need can once again be used as the poster children for this “necessary” compromise. Last month, Nancy Pelosi held one of her famous dinner theater kabuki votes to extend unemployment benefits, and the final vote was 258-154. Which, under ordinary rules, would have meant passage. But because she brought it to the floor using legislative tactics that required 290 votes, it failed.
Pelosi did this, we’re told, to “portray Republicans as unsympathetic to the plight of Americans still struggling to seek employment, particularly as the holiday season is set to begin.” In reality, she used the unemployed to play a game of political one-upsmanship that assured they’d still be held hostage when a “deal” was struck to extend all the tax cuts under a “last minute crisis” at the end of the year.
The rich don’t want their tax breaks to end, so the poor are pulled in to act as human shields. It happens time and again, and I wish this is something our more conservative constituencies could understand: government efforts to “help the poor,” are never really meant to help the poor. At least not in recent memory. It’s just part of a PR campaign to facilitate the otherwise inexplicable looting of the taxpayer trough by powerful interests capable of buying political influence.
And so the noble sentiment of helping their victims will once again be used to paint a smiley face on the ugly, rapacious greed of the oligarchs. This despite the fact that only 26% of Americans want all the tax cuts extended. Even among Republicans, support for extending all the tax cuts is only 46% — less than half.
But as Michael Bennet said, the game is rigged.
So when the Senate finally comes to an “agreement,” we can all thank President Obama, Harry Reid, Nancy Pelosi, Mitch McConnell, John Boehner and the members of the Catfood Commission for their fine performances this holiday season. They worked together to stage an elaborate show for the benefit of the public to demonstrate that they care so very much about the deficit, even as they all colluded to dramatically expand it.