On my way home from Eureka tonight I listened to KGOE’s talk show hosts ranting about Obama’s capitulation, and I was about to…, well, I’ve already turned in my Hope and Change membership card. Anyway, a responsible President can’t allow taxes to be raised on the consuming class in middle of a recession, and I understand that. What I haven’t understood was the rhetorical wimpiness. Why isn’t Obama screaming bloody murder and rightfully accusing the Republicans of holding the middle class tax cuts hostage in order to jam a deficit-inflating special tax break for the very rich? How could he possibly lose the exchange when the majority support an extension of the universal tax cuts while opposing the special tax cuts? And why capitulate even before the fight begins as he always seems to do?
Well, he and we lose if the sudden decrease in available consumption money comes to fruition in 2011. So, maybe he talks to the Republicans, who are in a bind themselves because they have to cater to tea party extremists while delivering on promises to the independents who vote for them for results by 2012. He got 200 billion in stimulus money in the form of the unemployment extension (not “paid for” out of existing money, which means additional money is poured into the economy) and a cut in payroll taxes, which would ordinarily increase the risk of Social Security insolvency, except that the plan apparently also incorporates Social Security fund guarantees from the general fund. These aren’t small issues. And the Republicans have conceded them – assuming that Obama can deliver the Congressional Democrats.
Only maybe he can’t. Congressional Democrats aren’t happy. Some of them are even threatening a filibuster. It’s not a done deal. If the Democrats play their cards right, they could have Republicans bidding against themselves. Maybe not. Maybe the progressive caucus will be railroaded, but not before they’ve grabbed the narrative for a media cycle. Sanders is getting more interviews than he’s had in years.
Economists are screaming that a sudden tax increase will hurt economic recovery. As we’ve discussed before, the investing class is sitting on trillions of money and I’m not convinced that giving them trillions more will lead to any more investing in employment. But if it does, and the economy improves over two years, the next sunset comes up in 2012 when Democrats bother to vote.
It could also be that Obama is caving just to keep the economy from going into free fall and has already given up on a second term.
But let’s see what happens if the Progressive Caucus can gum up the works. All Obama has to do is stay out of it. It’s the starting negotiation point for Republicans, and some of their own are upset with them over the extension of unemployment benefits for 13 months.
Pelosi is the bellwether here. The nation turns its lonely eyes to her in the last scene of her act.
Probably a stretch. Probably Obama’s on the phone calling in favors to get enough Democrats to cave, and maybe nothing more will be gained. We’ll find out soon enough.
Addendum: I received an email from someone with another perspective, someone whose unemployment benefits were about to expire. She supports the “cave.” She was one of these people:
And some of the Kos people are maybe a little to cavalier when they suggest that the “casualty rate” of 2 million people made homeless is acceptable.
Just a different way of looking at it.
But even if the cave-in was necessary, why the wimpy rhetoric? Again, I hope it’s strategy. Because if it isn’t, the Republicans will be running the country for the next six years.
Second addendum: Economists say there will be a stimulus effect, but fairly limited in the absence of an expansion under independent factors. They do agree that to let the tax cuts expire would cause a contraction, while the extended unemployment benefits will create over 700,000 jobs. Paul Krugman isn’t happy, but he does acknowledge that the deal is looking a little better than he had expected.
Third addendum: Obama held a press conference. He says that a fight would have been “good politics” but bad for the economy. He’s getting some flack from the press corps.
Finally the Progressive Caucus has chimed in. Looks like they have some fight in them.
As do the grassroots, and the WH and Congress are being flooded with calls. This is a good day to make them, before anything is set in stone.
Meanwhile, the press conference is still happening. This may be the headline from Obama:
“I think it’s tempting not to negotiate with hostage takers…unless the hostage gets harmed.”
At least he followed my advice on the rhetoric, finally.
You can sign a petition against the deal.
Fourth addendum: My God that was a brutal press conference! The reporters were all over them and he got kind of testy, calling those who are attacking him for compromising “sanctimonious.” This as he just admitted to caving in to hostage takers.
But here’s some real good news. Sen. Mary Landrieu is calling the deal “morally corrupt.” Landrieu! Are there enough Democrats willing to filibuster? How about reconciliation. Isn’t this a budget matter?
The Republicans are in hiding right now. What will they say when they emerge? There was some gloating on right wing blogs last night, but what can they do now? Praise Obama?
Go back to my original theme. I think this was deliberate. Let’s see how it plays out.
I have to say, this portion of his talk was very well thought out.
Still no sign of the Republicans.