Katrina Vanden Heuvel (along with a few of my least favorite Liberals) already has mouthed off in the pages of the Washington Post. You can find her stuff there. Joan Walsh and Roy Seikoff were on with Ed Schultz. (There's a reason I don't listen to his show anymore). I'm waiting for Randi Rhodes and Josh Marshal, who even if they disagree with have a sense of perspective about the deal.
Again, consider the facts and our whipsmart media. We went from the President getting exactly nothing for the Tax Cuts, to the President getting just Unemployment Benefits extended for the Tax Cuts, to the President getting Unemployment Benefits extended plus additional Stimulus (or Stimulus preservation) that will never happen under a Republican Congress.
All he's got to do now is hope it works.
Until then, here's the rest.
Ezra Klein (from yesterday morning, before it all went down):
In other words, rather than paring the tax cuts and the deficit back, they're making both larger. If you're of the mind that the economy needs all the extra help it can get right now -- and you should be -- this is a lot more extra help than anyone expected Republicans and Democrats would agree to give it. And from a political perspective, if you believe that what matters for elections is the economy -- and you should -- then it's worth it for the White House to lose news cycles in 2010 if it means adding jobs by 2012.
That's the policy of the deal. The politics are similarly focused on the next election: Democrats are negotiating toward a two-year extension of the tax cuts. They've rejected a three-year extension. That means the next fight over the tax cuts will be part of the 2012 election. And the White House believes that an improved economy and a bigger deficit will make it much harder for Republicans to support extending tax cuts for the rich. If they try, that gives Democrats both a populist cudgel and a way to take hold of the deficit issue.
The White House's problem is that they handled the politics of this argument so poorly in 2010 that their allies on the Hill don't trust them to do better in 2012. One Senate staffer summed up his reaction to the deal in one word: "Nausea." Another said the deal is fine -- but it was getting hard to trust the White House. "Will they actually have that fight in 2012?" He asked. "They dropped the ball this time around."
Uhh, they weren't the only ones to drop the ball there, Congressional Democrats.
Jonathan Bernstein:
This goes back to Ezra Klein's comment about health care, in which he realized that Republicans could have had achieved practically any substantive policy concerns in exchange for a few votes. The same was true on the other major Democratic priorities.
Understanding the tax cut debate just requires seeing that this is another of the Democrats' big agenda items -- only this time, Republicans are playing for the substance, not the issue. And with both sides having substantive goals that they really care about, and neither having the votes to get there on their own, a deal makes lots of sense. Indeed, seen from this perspective, the eventual deal isn't bad at all for the Democrats; they'll be getting the middle class cuts plus whatever other stimulus and safety net they can bargain for, while the GOP gets, well, the only thing they seem to care about in domestic policy.
Jonathan Chait:
It appears that President Obama got more out of Republicans, in return for extending all the Bush tax cuts, than I expected he would. Of course he also gave up more, agreeing to an extension of a low estate tax rate, which is apparently crucial as an incentive for rich people to, uh, die.
Why were Republicans so flexible? They are willing to deal away a lot if they're getting tax cuts for the rich. President Clinton got Republicans to establish a Childrens' Health Insurance Program in 1997 in return for a capital gains tax cut. Now Obama got a fair amount of stimulus in return for upper-bracket tax cuts. Unfortunately, it tends to be terrible policy. But it's the party's core policy goal, and if you help them attain it they can be surprisingly reasonable.
Jonathan Cohn:
So is this a good deal? Uh, not exactly. Is it a better deal than expected? That depends on what you were expecting and when you expected it.
Here, quickly, are five reasons to like this deal:
1. By adding an extension of unemployment insurance (and a payroll tax holiday to extension of the Bush tax cuts, the deal amounts to a new stimulus—one larger than the Republicans would have supported otherwise. One senior administration official suggested in a briefing call that, given Republican demands, “most people thought it would be impossible” to get such an extension.
2. Purely on policy grounds, permanent extension of any tax cuts is a bad idea. The country can’t afford them. No, you don’t want to raise taxes when the economy is so weak. But you don’t want to deprive the government of revenue permanently when the long-term budget picture is so bleak.
3. Obama gets a chance to look serious and less obstructionist than the Republicans. Americans say they like that.
4. Obama gets to give people a tax break. Americans say they like that too.
5. Obama couldn’t win this fight now, given the lack of will among more conservative Democrats in Congress and his low political standing. This way, he lives to fight another day--hopefully, with a stronger economy and stronger polls to buoy him. Ezra Klein laid out the political calculus this morning. Obama seemed to suggest he was thinking along the same lines when, during his press conference, he vowed to make his case to the American people in 2012. Maybe the Great Explainer will prevail after all.
And here are five reasons to hate this deal:
1. Tax cuts that benefit only very wealthy people are a horrible way to stimulate the economy. They also do a lousy job of addressing human needs at a time of considerable suffering. Obama used to decry these cuts. In fact, once upon a time most people would have thought it impossible that Obama would support such an extension.
2. Yes, permanently extending the tax cuts are a bad idea. But it’s not as if temporarily extending them makes permanent extension less likely. As Paul Krugman wrote today, "if tax-cut blackmail works now, why shouldn’t it work again later?" This was arguably Obama's best and last chance to kill a tax cut that will, over the next decade, starve government of money necessary to run its most important programs.
3. Americans already think Obama is more serious and less obstructionist. Based on the election results, they don't seem to care.
4. Americans already got a tax cut from Obama. Based on the election results, they don't seem to have noticed..
5. Even with the extra stimulus, the economy will likely grow slowly. That means Obama could still be low on political capital in two years. Also, to win a fight like this Obama would have to show the sort of communications skills he hasn’t shown in the last few months. He has utterly failed to frame this issue in a way that helps the Democrats' cause.
How you look at it depends on what you were expecting and when you expected it? Who said that before??
Ezra Klein (since I didn't put it in the terms of the deal post yesterday afternoon):
Most of the money just keeps programs that are currently in effect from expiring, so in some ways, it would be more accurate to say that this money is anti-contractionary rather than stimulative. It's important that the White House doesn't repeat the mistake it made in the original stimulus and overpromise how much this will do for the economy. What you can say about this policy is that, for the moment, it doesn't make things much worse, and it probably makes them a bit better. This is not the government making a major new commitment to the recovery. It's the government not getting in the way, and maybe doing a bit to help, the horribly slow recovery that's happening anyway.
It also, importantly, holds the extensions to two years. The tax cuts for income over $250,000 and the new estate tax rates will expire in 2012. The White House thinks that this'll be a good election issue for them, as it combines a popular, populist stance on taxes with a deficit-reduction message. Whether they're right -- and whether they'll fight in 2012 in the way people hoped they'd fight in 2010 -- remains to be seen. But on a policy level, two-year extensions of bad tax cuts are much preferable to 10-year extensions of bad tax cuts.
And finally, it's something of a hopeful sign: The White House sat in a room with Republicans and Democrats and managed to negotiate an actual compromise. The final deal includes some things that Democrats will like and some things they won't like, and it includes some things Republicans will like and some things they won't like. But it's a deal, and a better one than many -- myself included -- thought they'd reach. These tax cuts were a bit of a special legislative case, as their scheduled expiration forced action, but if you want to be optimistic, this process suggests that the next two years might be a bit more productive than some of us have been predicting.
No comments:
Post a Comment