Posted by: sweeneyblog | December 28, 2010

Obama’s Excellent Tax Cut Bargain

Throughout progressive circles there has been a solid chant: President Obama has sold out. He has renewed the hated Bush tax cuts, handing millions and millions of dollars to billionaires. I’ve read lots of articles about it, all using the language of weakness and defeat: he has “caved,” “folded without a fight,” is “meek,” or worse yet, “shown his true colors.”

Let me tell you right now, I understand that frustration. We progressives just lost a big election and we want our president to be as outraged, frustrated, and pugnacious as we are. So when he meets with Senate Republicans and comes out supporting this giant giveaway for the rich without even calling them names, we feel a bit betrayed. But let me tell you, extending the Bush tax cuts isn’t caving. It is the smartest move I’ve seen in a while. In fact, we got this at a steal.

Before we get into the details, let us talk about Plan B. So what if Obama had said, “No, I will only sign the extension of middle class tax cuts.” This proposal had passed the House, but had no prayer in the Senate. Without the 60 votes necessary to overcome a filibuster, Senate Republicans would have run out the clock and everyone’s taxes would have jumped at the start of the new year. Yes, we could blame the Republicans for that, pin this to them, but people will not see it that way. All they will see is that Obama could have signed a bill to lower their taxes and he didn’t. So what options would be left? Negotiating with Sen. Rand Paul over tax policy during a presidential election cycle? The whole fight would become a circus and the American people would continue to struggle.

So Obama cut a bargain and got a pretty good payday for playing ball with the new guys. He stuffed the tax package full of progressive goodies, and he got a promise from Mitch McConnell not to hold up bills during the lame duck session. Let’s look at what was in the tax cut package.
First, we have the tax cut itself, which provides an average of $1,000 per household to over 155 million citizens. That’s nothing to sneeze at, especially if you are down to your last pair of shoes and your car breaks down. $1,000 can be a lifesaver.

Second, the package extends unemployment checks to over two million people.
That stops the Grinch from stealing Christmas. Beyond that, there is a $2,500 tuition credit offered to eight million students to tackle rising education costs, 12 million low-income families will receive an extension on their child tax credit, and there are a variety of credits for business which will encourage hiring.

Third, the package cleared the way for other legislation.
Let’s look at the big ticket items that have passed because of this bargain: Don’t Ask, Don’t Tell was repealed; the new START Treaty was ratified; a massive Healthy School Lunches program was launched; a huge upgrade in food safety standards was passed over industry obstruction; a bill that authorized free, low-powered radio stations passed over objections from media conglomerates; and the medical needs of 9/11 rescue workers were provided for. Yes, not everything succeeded, most notably the DREAM Act. But that is a huge wad of legislative accomplishments, and because they were accomplished legislatively rather than by executive order, they are much harder to undo.

So Obama bought off the Republicans with a hefty sack of gold for their rich contributors.
The recently deceased can now pass $5 million tax free to their lucky heirs. But in return, Obama got many tangible goods and one very solid non-tangible: public approval. Over 66 percent of Americans supported the tax-cut package, and that’s not even including all the other accomplishments, like Don’t Ask, Don’t Tell, that push approval even higher. In short, Obama, with some solid negotiating, took a lousy hand and won the pot.

Yes, the progressives are a bit upset.
President Obama did not give them the big satisfying battle they craved. He went behind closed doors and negotiated with our opponents. How dare he?! Doesn’t he know they are trying to destroy us? Please. Credit the man with some intelligence. All he has to do is turn on FOX for a few minutes to see how bloodthirsty the opposition is. He knows. So rather than give them the screaming match that appeals to people’s worst instincts about politics, he meets them at the table and calmly discusses policy until they bargain or give up. And poll after poll agrees with him.

For all the expectations and hype, Obama is engaging in the kind of long-term narrative change that made Reagan a god among conservatives
. He is changing the dynamic for the next 20 years. Obama is moving us toward a calmer legislative process. Rather than prizing the choleric, talking-heads style of the Clinton era, or the “us vs. them” mentality of the Bush White House, he is pushing us toward cherishing rational debate, the gentle clash of ideas, and the dismissal of identity politics. Yes, it’s lofty, but this is how you do it. Don’t give them a big drag-out fight, outmaneuver them at the negotiating table. It is different, but it’s clear after the last election that we progressives could learn a trick or two.


  1. i got to agree with you. at the end of the day – what it comes down to is results, and no government since lyndon johnson and his congress have passed more significant and progressive legislation. this last month obama and his administration have been brilliant.

  2. Thank you!

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