A Political Triumph

As much as I hate to admit it, the Obama administration’s “compromise” on taxes and unemployment insurance is an incredible triumph for the administration.

First of all, nobody liked the compromise. Nobody.

The Republicans wanted permanent tax cuts for the wealthy, not a two-year extension.  They wanted to eliminate the permanent-aggregation-of-wealth tax (what they call the “death tax”) permanently.  And they misguidedly believe that unemployed people are lazy, like there are millions of jobs just lying around for the taking and that anyone who is still unemployed just aren’t trying, so they didn’t want to the unemployment insurance to be extended.   And of course, they didn’t want any of it (except the tax cuts for the wealthy) to come without corresponding cuts in services. (Oh, they would have liked service cuts to go with the tax cuts for the rich, but they wouldn’t have held back the tax cuts to get the spending cuts.  They could always come back later and blame the administration for spending beyond its means after having cut the means.  But I digress….)

On the other side of the fence, liberals (including myself) were infuriated that the tax cuts were extended for the wealthy (enlarging the hole in the budget), that the rich got two years of “help” (that they don’t need) and that the unemployed only got 13 months of help (that they do need).  That Obama gave cuts in the permanent-aggregation-of-wealth tax when that wasn’t even in discussion!  That it looked a lot like more caving to the ravenous right wing without winning any concessions in return.  That tax cuts for the rich have such a slight effect on stimulating the economy (the rich tend to save their excess, part of what keeps them rich) compared to assistance to the poor and middle class (they tend to spend their money).  And that the tax cut on “payroll taxes” endangers Social Security.

There is a LOT to hate about the compromise on both sides.

And yet…

And yet it passed.  A bill nobody liked got passed.  How does this happen? 

Because, as bad as parts of the compromise are from a policy standpoint (regardless of which policy standpoint you stand by) , not voting for the measure would be a political disaster for everyone.  If paychecks got smaller after the new year because of inaction, all of congress would have been on the receiving end of a massive massive backlash.

Of which stuff is a political triumph made.  When Congress was deadlocked, who stepped in and gave everyone more money?  Obama.

Secondly, the “shellacking” Obama took during the mid-terms was based in large part, I believe, in how the stimulus was “compromised to death”.  The amount was smaller, and yet the targets were made more diffuse by adding tax cuts for “small businesses”.  Essentially, the dollars spent on stimulus was “large” by the standards by which most taxpayers live, but the money wasn’t being spent on any way that reached their pockets.  “There is all this money being spent, where is mine?”  That engendered a lot of rage against government spending, and thus against the so-called big-government liberals.

This time, everybody gets a cut of the pie – the unemployed keep getting money (after their checks get cut off temporarily, making them more appreciative).  Wage-earners get to keep the breaks they already got, plus a little more from the payroll tax cuts.  The rich get to keep their breaks, and they get a break on their permanent-aggregation-of-wealth tax. 

Now, of course, Fox News will never love the Obama.  The rich who hate paying their fair share will never love Obama.  The Republican party will never love Obama.  the Tea PArty will never love Obama.  But I repeat myself….  Anyway, these folks, despite what they have been given by the President’s compromise, will never appreciate it.  But finally, by dint of giving it away to those who will never support him, Obama has gotten something to give to those who will appreciate it. 

Of course, it isn’t all good news.  In the long term, the payroll tax cuts endanger Social Security.  The giveaway to the extremely wealthy creates a budget hole that the Republicans will continue to blame on “out-of-control” spending by liberals.

But for the near-term, Obama has a triumph that people will feel and appreciate. 

Now all he has to do is capitalize on it…..



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