Obama’s “Compromise” On Tax Cuts Signals His Inability To Lead
December 7, 2010
(ChattahBox Op/Ed) – President Barack Obama has almost certainly signed his own political death certificate last evening when he announced the “compromise” with Republicans on tax cuts, unemployment benefits and a variety of other measures that are intended to stimulate the economy. We’ll get back to that thought in a moment.
Liberals across this great land are screaming mad this morning and you can count me in. What President Obama did with his announcement was signal to his base that he has quit. He sent us a clear message that he does not have the courage of his own convictions and that the audacity of hope is a slogan, just words, just flowers for the grave.
Spend a few minutes scanning any news website and you will see that Republicans are filled with joy today. They are boastful and proud of their victory. The threat worked before they even had greater power to destroy and they successfully pounced on the system and on a President that clearly has no political gravitas.
Visit those same websites and you will see that Democrats are not happy, measured in their anger, but I can promise you that behind closed doors, and I would do anything to be in the Democratic Caucus today, that voices will be raised and when Vice President Joe Biden comes with a smile on his face he won’t be leaving with one. Sadder still, in spite of the vitriol and pronouncements of displeasure, these same Democrats will give in as well. Don’t for a second think they won’t.
Some will fight, some will posture and some will vote against the compromise, but not enough.
What the compromise includes is:
- Extends the unemployment benefits for 13 months
- Leaves ALL tax cuts in place
- Reduces payroll taxes by 2% for one year
- It will provide a year of tax write offs for business that invest in their businesses
- Cut Estate Taxes even more than the Bush Administration did
Here’s the real problem for Obama, beyond what I’ve already stated. Obama handed the Republicans two critical election year victories, and the election year will be 2012. The first win is that the taxes to the wealthiest Americans will once again be set for expiration and the debate begins again in 2012. The second is that this compromise will be totally funded by adding debt and no other way. The $900 billion dollar price tag of this compromise is nothing but more debt. That matters for plenty of reasons but for Republicans it will be one more thing they will use this against the President as another example of how he couldn’t rein in costs, even though the costs were forced upon him by these same Republicans.
But it wasn’t forced, Obama folded. Had he insisted on what he said he wanted he would have gotten it. And, here’s the beauty of that, the savings in tax revenue that would have been raised by allowing the tax cuts to expire as planed would have immediately added $700 billion to the Treasury. The math may suggest to you that $900 billion for the compromise take away $700 billion in tax revenue means that we would have only created $200 billion in debt, bit it actually would not have created ANY debt. The tax cuts that were set to expire would have pain for ALL of the rest of the costs. This is insane.
The only thing the Republicans didn’t get in this compromise was that they wanted the Bush tax cuts to be permanent. And if you’ll remember at the time the tax cuts were enacted it was not great timing for the country as we were racking up debt at record levels to fund wars and expand the Federal Government. To continue them makes even less sense now, in face it’s insanity.
I’ve been thinking latterly that we are headed to a Jimmy Carter like situation for Democrats these days. We have a President that comes into office with an ambitious agenda and although his accomplishments are many the perceptions are negative. I wouldn’t be surprised if we start to hear that Obama may have another Democrat make noise about running against him in 2012. That is a very real possibility.
And the base, the Progressives? They are close to being done, and I mean very close and we are not even into the 112th Congress yet.
If this is what we have to look forward to as Democrats then we are in deep trouble as a Party.
While some of this compromise was needed the victory gift wrapped to Republicans as they leave for the Holidays tastes like rotten egg nog to me. This was way too large a victory for the Republicans whose hypocritical rhetoric about cutting debt and fiscal responsibility is a sham and now they have a partner in the degradation of America, one Barack Obama.
Tony Trupiano is a former national syndicated progressive radio talk show host, author, and a former candidate for Congress. He is also a nationally recognized media trainer. He can be reached at firstname.lastname@example.org and can read his Blog at http://www.mediatraining.me