Home > Finance and Economics, Obama administration, Politics > Obama sides with GOP on extending Bush tax cuts

Obama sides with GOP on extending Bush tax cuts

Put all partisan liberals and progressives on suicide watch:

President Obama announced a tentative deal with Congressional Republicans on Monday to extend the Bush-era tax cuts at all income levels for two years as part of a package that would also keep benefits flowing to the long-term unemployed, cut payroll taxes for all workers for a year and take other steps to bolster the economy.

The deal appeared to resolve the first major standoff since the midterm elections between the White House and newly empowered Republicans on Capitol Hill. But it also highlighted the strains Mr. Obama faces in his own party as he navigates between a desire to get things done and a retreat from his own positions and the principles of many liberals.

Congressional Democrats pointedly noted that they had yet to agree to any deal, even as many Republicans signaled that they would go along.

Mr. Obama said that he did not like some elements of the framework, but that he had agreed to it to avoid having taxes increase for middle class Americans at the end of the year. He said that in return for agreeing to Republican demands that income tax rates not go up on upper-income brackets, he had secured substantial assistance to lower- and middle-income workers as well as the unemployed.

Conventional wisdom says that the Republicans won this political battle, and won it big.  Democrats on the other hand, well, they can suck on this:

To say that Republicans are triumphant would be an understatement. They won the philosophical point (tax hikes impede economic growth) and, candidly, are more than delighted to have a repeat of this debate for the presidential campaign in 2012. Ryan Ellis of Americans for Tax Reform, which strenuously pushed for extension of the Bush tax cuts, tells me,”If 2012 is a referendum on Obamacare and tax hikes, we win.” Well, there will be lots of other issues, and 2012 in political terms is a long way off.

[…]

…[T]he White House sided with the Republicans. And it was Democratic gloomy faces all around. The president looked solemn as he announced the deal. Reid pointedly refused to endorse the deal; his spokesman issued a statement that Reid would have to consult with his fellow Democrats. One Senate adviser said that the party caucus meeting tomorrow should “be interesting.”

Drew M:

This is going to drive the left off the edge. Raising taxes was a big part of the Obama campaign and a lot of Democrats ran and lost on it last month. Now Obama is cutting it adrift. The Democrats bet hanging tough on tax increases would motivate the base in November more than cutting a deal would win them independent votes. Congrats on getting the worst of all worlds.

A few things to take away from this.  What about spending cuts?  I’d like the Republicans in both chambers of Congress to stand firm and be as aggressive pulling back spending as they were for extending the Bush tax cuts.  Something tells me not to hold my breath.  

And extending unemployment insurance is a back-breaker for many small businesses.  How will they fare over the next 13 months?

From what I can gather, the CW is cool with this deal, and might make most of us feel warm and fuzzy about sticking it to the Democrats, but I’m not so sure.

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