Politics now takes center stage as tax deal moves to Congress
Let’s get a few things straight, shall we? For the most part, this deal between Obama and the GOP on the Bush era tax rates isn’t a “tax cut”. It is a maintenance or extension of the current tax rates. There is nothing – absolutely nothing – permanent about any tax rate. They’ve ranged all over the place in the history of the income tax and are, in fact, subject to the whims of Congress. Within this package there are some tax cuts (payroll taxes for a year) and tax giveaways (EIC, etc). Other than that, it’s about keeping the current tax rates for everyone in a time of economic hardship.
Consequently it isn’t costing the government anything except a few rosy revenue projections if it had been able to increase taxes on the wealthy. And consequently, at least that part, adds nothing to the deficit. Got that? Nothing. What adds to the deficit is spending based in borrowed money.
And that problem is found in the extension, again, of unemployment benefits. So if there’s a spending negative, that’s it. Some may argue that it’s necessary. I personally wonder about that.
Anyway, it is important, as the spin begins to come out on both sides about this deal that the basics be understood.
Yesterday a petulant president tried to defend the deal at a hastily called news conference. Once into questioning, a bit of bitterness began to show through. This particular quote struck me:
And I will be happy to see the Republicans test whether or not I’m itching for a fight on a whole range of issues. I suspect they will find I am. And I think the American people will be on my side on a whole bunch of these fights. But right now I want to make sure that the American people aren’t hurt because we’re having a political fight, and I think that this agreement accomplishes that.
It reminded me of the kid picking himself up off the dirt of the playground after getting his rear end kicked and yelling “next time your butt belongs to me” at his antagonist. Obama then goes on to call John Boehner a “bomb thrower” and compare the Republicans to hostage takers (to be fair, he was none to kind to the “professional left” and even took a shot at the New York Times).
But the bottom line remains, the GOP succeeded in getting the tax rates extended for all to include thousands of small businesses who would have otherwise been hit with higher taxes. And what Obama is left saying is, “you know that line in the sand about doing away with tax cuts for millionaires, the one I drew 3 years ago and have promised to do away with ever since? Yeah, well, wait till 2012, by gosh”.
Another interesting quote from the newser was this:
So the issue — here’s the choice. It’s very stark. We can’t get my preferred option through the Senate right now. As a consequence, if we don’t get my option through the Senate right now, and we do nothing, then on January 1st of this — of 2011, the average family is going to see their taxes go up about $3,000.
Is that a fact? What have we heard for years concerning what the left continues to call the “Bush tax cuts”? That they were primarily “tax cuts for the rich”. Of course, they were much more than than and as is obvious, Democrats can’t allow them to expire or that nasty little truth would suddenly become widely known.
Finally, this struck me the wrong way:
This country was founded on compromise.
No. It wasn’t. It was a nation founded in a principle – that which said people have the right to be free from oppressive government and have the right to do what is necessary to accomplish that. Any compromise had to do with the particulars of accomplishing the principle, not in the principle itself. Obviously politics is the art of compromise. What isn’t to be compromised is that founding principle and it is the ongoing compromise of it – or at least an attempt to do so – that has people figuratively up in arms. Those Gadsden flags are waiving for a reason.
Anyway, each side is busily spinning a “win” for themselves on this particular deal. All the while, political resistance is forming on both sides of the aisle in Congress. Pelosi and Reid both seem less than enthusiastic about it and have signaled by their language that they may not have the votes to pass it.
Politically, the next few days should be interesting.
[ad] Empty ad slot (#1)!