President Obama seems remarkably proud of himself for the many “concessions” he won from Sen. Mitch McConnell (R-KY) as part of their deal to extend all the Bush tax cuts for two years. The administration has really tried to spin the “success” of this deal by claiming Obama got $238 billion in spending while the Republicans got only $114 billion of spending on what they want. Yet, it seems almost all of the “concessions” Obama claims to have won were ideas actually promoted by Republicans. The amount of money allocated for things Obama wanted that didn’t have bipartisan support is much smaller.
In his press conference, Obama highlighted major “concessions” from Republicans that don’t appear to be real concessions at all:
I’ll cite three of them. Number one, if you are a parent trying to raise your child or pay college tuition, you will continue to see tax breaks next year. Second, if you’re a small business looking to invest and grow, you’ll have a tax cut next year. Third, as a result of this agreement, we will cut payroll taxes in 2011, which will add about $1,000 to the take-home pay of a typical family. […]
And, as I said, there are a whole bunch of things that they are giving up. I mean, the truth of the matter is, from the Republican perspective, the Earned Income Tax Credit, the college tuition tax credit, the Child Tax Credit — all those things that are so important for so many families across the country — those are things they really opposed.
Payroll Tax Cut – There is little reason to believe Republicans would not have supported this as a stand alone bill. A payroll tax cut was an idea McConnell supported last year along with the conservative American Enterprise Institute. This accounts for half, $112 billion, of the spending the Obama apparently “got” from the Republicans.
Child Tax Credit – Rachel Maddow noted that extending the Child Tax Credit was part of the Republican “Pledge to America.” In 2008, John McCain campaigned on doubling the child tax credit. Including this in the tax dea is not a concession, that is helping Congressional Republicans fulfill their promise.
Temporary Extension of Investment Incentives – The extension of bonus depreciation and increase in small business expensing are “pro-business” ideas popular with Republicans. Bonus depreciation was a feature in several bills that George W. Bush signed into law. There is no way to consider this as $22 billion Obama “got” from Republicans. [cont’d.]
Earned Income Tax Credit – Republican President Ronald Reagan supported and greatly expanded the earned income tax credit. During the 2000 campaign George W. Bush opposed cuts to the earned income tax credit. American Enterprise Institute President Arthur Brooks said the Earned Income Tax Credit is an example of a program that “rewards work and earned success.” There are Republicans who oppose it as “Welfare,” but it has not been anathema to the party.
It is also important to remember the EITC is a permanent policy, the deal only includes an extension of a modest expansion of the EITC. If a concession, it is a fairly minor one by Republicans.
American Opportunity Tax Credit – This College tax credit was an idea Obama campaigned on and was part of the stimulus bill. He can count this as a real concession.
One-Year Extension of Unemployment – Republican didn’t want to pass an unpaid-for extension of unemployment for a full year. This can be called a win for Obama, but it should be noted that Republicans were not prepared to take the blame for cutting people off in this economy. Sen. Chuck Grassley (R-IA) admitted as much when he said that, even without this deal, the Senate would have approved a brief unemployment extension.
Overall, a very Republican Package
Looking at the entire package, it is a very pro-Republican proposal. Many of the items in the package that Obama and other Democrats have bragged about winning already had Republican support or were originally Republican ideas. Republicans have long pushed for a payroll tax cut, expanding the child tax credit, and special tax treatment for business investment. Congress probably could have passed all of these even without Obama giving in on the estate tax, so you can’t really count them as real concessions. Even the extension of unemployment benefits, which is a win for Obama, is only a partial cocession, given that the White House would have been able to get a shorter extension, separate from this deal.
The portion of the tax cut deal actually being spent on items that were not supported by Republicans and conservatives–like the college tuition tax credit–is relatively small. By my count, Obama really “got” a little over $80 billion in actual concessions from the Republicans–much less than the $114 billion in giveaways to the position Obama said he opposed.
It is hard to look at the totality of this package with its mostly Republican ideas and think Obama actually got a good deal–that is unless you accept the fact that he really didn’t want to end the Bush tax cuts for the wealthy right now, so he wasn’t actually giving up that much himself.