Free Markets, Free People

Obama caves on tax cuts, liberals howl

Pretty interesting the way the GOP got its way on the Bush era tax cuts – at least  for two more years.  The minority party in both chambers of the lame duck Congress, other than demand that the Democrats give everyone a tax break, they didn’t have a whole bunch of leverage.  Until they were able to successfully block the extension of unemployment insurance.  The country was pretty divided on extending it beyond 99 weeks, but not so much that it probably wouldn’t care if that extension was okayed at some later date. 

And thus was set up the perfect opportunity to trade that extension for an extension of the Bush era tax cuts for everyone.  So in sum, step one, block extension of unemployment insurance.  Step two, use unemployment insurance extension as a bargaining chip. Step three, the GOP gets what it wants to begin with plus a lowering of payroll taxes as well.  Meanwhile they “give away” what they’d have probably ended up voting for at some future point.  And most likely Obama will get little credit for the trade.

Freakin’ amazing.

Obama also conceded to the GOP’s estate tax and dividends and capital gains demands as well.  And here’s the really fun part – by announcing his “framework”, Obama made it official – this is what I want, this is what I negotiated, now Congress do your thing:

"We cannot play politics at a time when the American people are looking for us to solve problems," Obama told reporters. "I am confident ultimately that Congress is going to do the right thing."

Can’t play politics?  This has been a lesson in politics.

That’s the DEMOCRATIC Congress he’s talking about, by the way.  A Democratic majority in the House and a Democratic majority in the Senate.  The GOP is already on board with this, as announced by the President.  So what’s left to do?

Pass the compromise in both the House and Senate, Democrats. 

So, you say, what if the Dems bow up and refuse to pass it?  Well, the unemployment extension, something the GOP is now for will not pass.  Additionally, all of the Bush era tax cuts will expire which will mean tax increases across the board for all income levels.  All.  Everyone.  Not just the “rich”, but the middle class as well.

And who will be the bad guys? 

Well, not the GOP.  From a purely political perspective, pretty impressive if I do say so myself.

The liberal side of the housenot so happy.  Not so happy at all.

~McQ

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10 Responses to Obama caves on tax cuts, liberals howl

  • Probably couldn’t’ve held the line long on unemployment insurance anyway.  Media running dogs would’ve hit them with the full-court ‘big meanie GOP want your out-of-work brother/uncle/whoever’s children to STARVE’ and we’d see the squishes fold like cheap suits. Instead it’s the big zero who blinked.
     
    mmm. Kossack tears are sweet, sweet nectar.

  • if it doesn’t pass, I think it will be damaging for Obama. Not only has he shown his hand to the left that he can’t be trusted, the economy will also be damaged by the tax hike

    • I agree … he’ll be shown, again, to be an ineffective leader. However, my guess is he wants this cleared away so START, the DREAM act and DADT can be passed along with some other things he’d like to see go through before this Congressional session ends. So I think that may be on the back side of the cave in. And I think he underestimates the resistance he’s going to get to those things and others. If I had to guess, I’d guess that about the only thing of substance that will come out of this lame duck session are the tax cuts. And given the reaction of some Democrats, it may take a while before that passes too.

    1. Anyone doing the math on how much various groups save in the short run and how much they’ll have to pay in the long run?  Holding spending constant, cuts to the regressive payroll tax (and Obama’s other stimulus tax cuts) will shift taxes onto the future wealthy.  The estate tax will cost the wealthy a bit in the short run.  But the income tax cuts will certainly favor the current wealthy.
    2. While I think a lot of any tax cut will be saved right now (notice how household debt has been falling for a couple of years), a 2-year payroll tax cut should help stimulate employment somewhat.
    3. Not looking forward to borrowing all that money, but at least money’s cheap right now.  I recommended a much larger payroll tax cut a while back, but I thought it should be paired with an ironclad promise to pay down the debt when the economy recovers.  That’d help reassure our creditors and keep the money cheap.
  • McQ - So, you say, what if the Dems bow up and refuse to pass it?  Well, the unemployment extension, something the GOP is now for will not pass.  Additionally, all of the Bush era tax cuts will expire which will mean tax increases across the board for all income levels.  All.  Everyone.  Not just the “rich”, but the middle class as well.
    And who will be the bad guys? 

    Cynic that I am, I am confident that the “bad guy” is and forever will be the GOP.  Reality means nothing to the left and their MSM mouthpieces.  After all, who was “the party of No” during the past two years?  Who ALWAYS “blocks” the progressive agenda even when they clearly have no power to do anything beyond show up and talk?  Who is compeltely, utterly, solely responsible for the economic mess in the first place?

    Is it really such a stretch to imagine that the GOP would (will?) be pilloried for holding out-of-work Americans hostage in order to get a big tax break for the rich?

  • The joke is on the Democrats!  They could have passed whatever they wanted six months ago and they passed – they did not want to put any pressure on their precious re-election efforts.  So they punted with the though that they would be able to do whatever they wanted to during the Lame Duck period.  Well, their reasoning is just as effective as it was two years ago when they passed Stimulus – the economy will recover on its own and if we pass this Stimulus boondoggle we wuill be hailed as saviors – yeah and how did that work out for you, dems??

    Has there ever been a group of morons as clueless as the current crop of Dems?

  • Two reactions:
    1) So we get to have the tax cut debate AGAIN in 2012?   SWEEEEET.
    2) Oh wow…..he’s gonna get primaried.
     
     
     

  • So, you say, what if the Dems bow up and refuse to pass it?

    Now, the White House is claiming that Congressional Democrats cut the deal.  Problem solved.

  • Obama called “tax cuts for the wealthy” the Republicans’ “holy grail.”
    “It seems to be their economic doctrine,” Obama added, previewing a likely argument during his expected re-election race in 2012.

    “It’s a good deal for the American people,” Obama said.

    Obama cast his decision to accede to the GOP position on extending the tax cuts in stark terms.”It’s tempting not to negotiate with hostage takers — unless the hostage gets harmed. Then, people will question the wisdom of that strategy. In this case, the hostage was the American people, and I was not willing to see them get harmed.”
    He said the American people agree with his position, but “I haven’t persuaded the Republican Party.” Reflecting the newly increased Republican clout in Congress, he said: “I haven’t persuaded (Senate Republican leader) Mitch McConnell and I haven’t persuaded (House GOP leader) John Boehner.”
     
    Some of these comments don’t seem very presidential or the words of someone willing to “reach across the aisle.” Then he says its a good deal for the USA. I also wonder how he can say “America agrees with his position”…did he not just lose an election?
    Looks like the plan will be triangulation but the words will be partisan. Sounds like Obama. Is he maybe going to again just vote present an allow Congress to do everything like with healthcare?