Editore"s Note
Tilting at Windmills

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December 8, 2010

LOOKING FOR PLAN B.... The Center on Budget and Policy Priorities' Bob Greenstein, who has as much liberal credibility on budget and tax issues as anyone, doesn't seem to like the "disturbing negative" provisions of the tax policy deal struck by the White House and congressional Republicans. But he wants to see it pass anyway.

"Congress should approve this package -- its rejection will likely lead to a more problematic package that does less for middle- and low-income workers and less for the economy," Greenstein said yesterday. He added that the agreement includes "surprisingly strong protections for low- and middle-income working families."

Dean Baker, another very credible, highly respected liberal economist, reached a similar conclusion. Prominent lefty wonks like Lawrence Mishel and John Podesta offered the same assessments yesterday.

The New York Times editorial page said Democrats are "in revolt," but they should "vote for this deal" anyway.

Without this bargain, income taxes on the middle class would rise. Unemployment insurance for millions of Americans would expire. And many other important tax breaks for low- and middle-income workers -- including a 2 percent payroll tax cut and college tuition credits -- would not be possible.

If angry Democrats blow up the deal, they will be left vainly groping for something better in a new Congress where they will have far less influence than they have now. The middle class and the unemployed would be seriously hurt.

But let's say they're all wrong. Let's assume, for the sake of conversation, that the liberal economists don't fully appreciate the larger principles at stake here; their stimulus projections are overly optimistic; and their entire perspective is skewed by weakness, a poor understanding of political tactics, and a Neville Chamberlain-like worldview.

Indeed, let's also say, just for the sake of conversation, that the liberal policy experts lose the argument and Congress rejects the agreement. Dems decide it's a bridge too far, so they scuttle the deal and take their chances.

What's Plan B?

I don't mean this to sound snarky and this isn't a rhetorical question; I'm genuinely interested in understanding the back-up strategy. When I posed this question yesterday to some Capitol Hill aides I know, they said they'd recommit to fighting even harder for the original Obama tax plan -- permanent breaks for those under $250k, Clinton-era top rates for those above $250k. If/when this week's compromise goes down, Republicans, they said, would likely cave and accept the Democratic approach. They'd be out of options -- it'd be a choice between the Dem plan and higher taxes for everyone. Dems would regain the leverage they lost before the midterms.

And that could work. The plan came seven votes shy of 60 the other day, but when push comes to shove, maybe those seven additional votes would come together, and Dems would win this fight over taxes.

But what then? How would extended unemployment benefits pass for the millions of jobless Americans who need them? What happens to the economic stimulus? What's the strategy for getting quick approval for an expanded earned-income tax credit and the continuation of a college-tuition tax credit? With almost no time left on the clock, after winning the fight on tax policy, is the plan to simply punt on New START ratification, DADT repeal, the DREAM Act, food safety, and health care for Ground Zero workers, hoping for the best in the next Congress?

I understand very well what opponents on the left want to do to the tax deal, and why. I'm less clear on what happens next.

Update: The estimable David Dayen was gracious enough to prepare a response to my inquiry, and I appreciate it.

Steve Benen 9:30 AM Permalink | Trackbacks | Comments (92)

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Comments

Nothing happens next, Steve. And nothing is way better than this Club for Growth Trojan horse.

Posted by: Steve LaBonne on December 8, 2010 at 9:37 AM | PERMALINK

At some point, it may make sense to let the GOP have everything they want. President Palin, full-blown plutocracy etc. This may finally awaken the apathetic public into realizing that there are more important things than "Dancing With the Stars."

Posted by: tommybones on December 8, 2010 at 9:41 AM | PERMALINK

Next you take the money saved and pay down the deficit, and when both houses of congress are decidedly Democratic as a result of the turnout for the president's reelection, you pick back up the forward thinking legislation, and go ahead and tax top earners 70%, and rebuild the country.

Posted by: Bless on December 8, 2010 at 9:45 AM | PERMALINK

The CBO projects that letting all of Bush's tax cuts expire will add .1 to .2 percent to unemployment.

I project that the rethugs will find ways to undo anything positive in this capitulation by Obama.

I project that passing this Obomination-Rethugnican package will continue to expand the deficit and continue to expand the call to destroy social security 'to save it and reduce the deficits'.

Steve LaBonne is correct that nothing is better than this long term disaster for the working/middle classes of Americans.

Posted by: SadOldVet on December 8, 2010 at 9:46 AM | PERMALINK

Trying to figure out if Bless's comment was a joke or not.

Posted by: Tommybones on December 8, 2010 at 9:46 AM | PERMALINK

Do you think internet cowboys need a plan B, Steve?

Having said that, the key will be the successful passage of all the legislation you mentioned. If that doesn't pass--and prospects look grim for a couple of those items you listed--the tax 'compromise' will look even worse.

Posted by: holmes on December 8, 2010 at 9:47 AM | PERMALINK

I am not in favor of this package, but it could be tweeked to be a bit more palatable. For instance, make the rate cuts on those earning less than $100K or $150K permanent, and everything above that is temporarily extended. Add $100 billion for actual stimulus project investment in trains, roads, bridges, repairs. Adjust the estate tax to inch the rate up a tad and reduce the floor to $3 million. And finally, bump the FICA tax contribution rate up from its current level by something like half of a percent (with half going to Social Security and half going to Medicare), to go into effect after the tax holiday expires, together with a raising of the floor to which the tax applies.

Posted by: bubba on December 8, 2010 at 9:48 AM | PERMALINK

Obama was right about one thing yesterday: Real people with real bills will lose if unemployment benefits get extended. Others will lose if their meagre paychecks get smaller if middle-class cuts end.

These are not philosophical abstractions. There will be hardship if everything falls apart and nothing passes by the end of the year.

Protest all you want, these are cold, cruel realities for millions of our fellow citizens. I, personally, would like to give the Democrats spine transplants and do unpleasant things to Republicans -- but I don't want to do anything that adds to the hardships millions of Americans are facing already.

Posted by: K in VA on December 8, 2010 at 9:52 AM | PERMALINK

If someone explains to me why this is not a mortal blow to Social Security, I'd be all ears. As I understand it, there's a "temporary" cut in the SS tax -- just like the Bush tax cuts were "temporary." And certainly, when the cut expires, the Republicans will treat the failure to continue it as a "tax increase." So we will have deeply depleted the resources for paying social security benefits and broken the 70-year-old deal that benefits are connected to what a person pays in.

This is a total victory for the Republicans in their decades-long campaign to kill Social Security.

Posted by: David in NY on December 8, 2010 at 9:56 AM | PERMALINK

Excellent post, excellent question.

Glad to see someone in left blogistan has their head on straight.

Posted by: TR on December 8, 2010 at 9:56 AM | PERMALINK

Steve,

Do not insult Neville Chamberlain! He delayed the start of the War by a year, thus enabling Britain to survive. He also saved the National Health Service and Milk (School Lunch) programs. I could go on.

The fact is, he got something.

These "Democrats" and "liberals" are turds. My family died in mines and from bus exhaust as Greyhound fanatics, and barely survived McCarthy's bullshit. Generations of loyalty and involvement down the proverbial shitter. Again, I could go on.

We have been betrayed! Disgusting louses.

Posted by: HenryEdward on December 8, 2010 at 9:58 AM | PERMALINK

Plan B should include the funding for the wars with the higher taxes on the wealthy. This would put the Republicans to the real test on their requirement that increased spending be budget neutral. It would not undo the deficits created by the Bush tax cuts and starting two wars waged with money borrowed from China, but it would test their two faced approach to governing and asymmetrical (terrorist) tactics. Apply their own medicine to them!

Posted by: lou on December 8, 2010 at 9:59 AM | PERMALINK

An even more likely way for the compromise to fail is the Rethugnican Crazy Right, DeMint, Bunning, Coburn, Inhofe, etc and deficit hawks like Voinavich, join say about 10-12 democrats including Sanders to filibuster. Alternately, Blue Dogs, liberals and the even larger Crazy wing in the House might kill it there.

No deal, no continuing resolution, no debt ceiling, no DREAM, no food safety, no DADT repeal. The Crazy wing gets reinforced in January and we go straight to shut down and default.

Posted by: OKDem on December 8, 2010 at 9:59 AM | PERMALINK

It's time to start talking about who the real failures are in this debate. Congressional and Senate Democrats. I'm sick of these idiots blaming Obama for doing the work they refuse, or can't seem to come together to do. Obama is out there doing what I elected him to do. Run the damn Country and keep it from going into the ground. He is doing this IN SPITE of his idotic caucus. Please let's lay blame where blame is due when it comes to failing the Country. These guys aren't getting another dime of my money or support until they show they can pull their collective heads out of their asses. I am disgusted by the House and Senate. What a bunch of F@$%ing incompetent whiners.

Ronald

Posted by: Ronald on December 8, 2010 at 10:02 AM | PERMALINK

Anybody who knows how to count realizes that nothing happens without extending tax cuts for the rich. Given the opposition to extending tax cuts for the rich that means there is no plan B.

That means come January taxes on everybody go up and a lot of money is taken out of a very weak recovery. Given the attitude of the new Republican congress, nothing will be added to the mix. The economy will drop back into recession and the Republicans will announce a plan that looks a lot like a reintroduction of the Bush tax cuts. In the meantime a lot of people will be hurt in the process.

Posted by: Ron Byers on December 8, 2010 at 10:07 AM | PERMALINK

I'm OK with the tax cuts expiring. I'm willing to pay the extra tax just to shut the deficit hounds up. The worst thing about voting this monstrosity down? Well, that would be the Unemployed getting zip. I'd hate to see that. But I think that would be very informative to a nation as to what the Republicans really value because the loss of the meager income the unemployed get would become huge.

Work the system to accentuate your side. Democrats need to do that preparing for 2012. If they don't do something stark & drastic, they will surely lose the Senate then.

Posted by: kindness on December 8, 2010 at 10:07 AM | PERMALINK

If Democrats do not accept the deal and Republicans do not capitulate the situation would be that all tax cuts would expire and there would be no extension of unemployment insurance. Individual economic pain would increase and the recession could well worsen. If the economy is still bad in November 2012 who will be held responsible? Certainly the President will - this is what has always happened. McConnell's declared objective will be realized - why would Republicans capitulate now?

Posted by: skeptonomist on December 8, 2010 at 10:07 AM | PERMALINK

Remember how the Dems in the Senate and House thought that deferring the tax cut vote until after the election was a good idea?

Here's the result so far:
1. They didn't prevent the GOP from campaigning against their position on taxes.
2. The lame duck session is now running out of time to deal with the START Treaty, Dream Act, DADT repeal, etc.
3. Their bargaining position against the GOP got even worse.

Posted by: Kiweagle on December 8, 2010 at 10:10 AM | PERMALINK

The majority is not represented by either political party. DC, and its unelected consensus work primarily for the FIRE and MIC sector.

Posted by: Kill Bill on December 8, 2010 at 10:10 AM | PERMALINK

No stimulus, no re-election.

If the stimulus aspects of this plan do not get passed, there's no chance for anything in the future, because voters will be in disarray in 2012 no knowing what to do given the continuing high unemployment.

Stimulus now, the Democrats and Obama get back on track to win in 2012.

If you want to project Republicanism into the long-term future including the end of social security, take a look at what happens if unemployment stays this high through 2012. There's your Republican future.

The stimulus aspects of this plan are critical to any future progressive gains.

Posted by: Vicki Linton on December 8, 2010 at 10:12 AM | PERMALINK

So we have to bribe the richest people in society with at least $700 billion dollars plus whatever the inheritance tax (remember, it's called the 'inheritance' tax!) is going down to -- in order to pass "New START ratification, DADT repeal, the DREAM Act, food safety, and health care for Ground Zero workers"?

You have to be kidding.

Posted by: leo on December 8, 2010 at 10:12 AM | PERMALINK

Puhleez. The dummehcrats owners never wanted any of those things. Compromising is just an act.

Posted by: Kill Bill on December 8, 2010 at 10:12 AM | PERMALINK

Ronald is right. The real culprits in this mess are the congressional Democrats. They have taken a pass on leadership. I am particularly offended with our Senate leadership. Hasn't anybody in the Democratic causus ever heard the term nuclear option. Well why the hell didn't they at least threaten it? Anybody ever ask Harry Reid, Dick Durbin or Chuck Schumer?

Posted by: Ron Byers on December 8, 2010 at 10:13 AM | PERMALINK

I won't bother getting into the question of whether something is better than nothing here but the Capitol hill aides who believe that the Republicans are going to blink on this are living in an alternate reality. They haven't been paying attention, at all, to what is going on in this reality in which the GOP will happily burn down the economy to deny this president and the dems a victory and for no other principle at all.

Posted by: brent on December 8, 2010 at 10:14 AM | PERMALINK

So we have to bribe the richest people in society with at least $700 billion dollars plus whatever the inheritance tax (remember, it's called the 'inheritance' tax!) is going down to -- in order to pass "New START ratification, DADT repeal, the DREAM Act, food safety, and health care for Ground Zero workers"?

You have to be kidding.


Not a joke. Obama and the Dems (and many on "the Left") have been in the Big Business pocket for years. Why people fail to understand or even see this is a mystery to me.

Posted by: SFO in 2008 on December 8, 2010 at 10:15 AM | PERMALINK

So we have to bribe the richest people in society with at least $700 billion dollars plus whatever the inheritance tax (remember, it's called the 'inheritance' tax!) is going down to -- in order to pass "New START ratification, DADT repeal, the DREAM Act, food safety, and health care for Ground Zero workers"?

You have to be kidding.

Of course it would be nice if it were a joke but it obviously isn't. This is where we are and its deadly serious. Steve's question is really pretty straighforward then, what are we going to do about it? And more particularly what are we going to do about it within the next week and a half after which the situation will certainly get worse and even more surreal?

Posted by: brent on December 8, 2010 at 10:21 AM | PERMALINK

Game Theory- A somewhat insane person always bests a totally rational party in negotiation, because their insanity is accounted for by the sane.

It's not the deal here that's the problem, its Obama's stance as always being the rational one, yet he assumes that the Repukes are not. Time for the progressives to get somewhat irrational, and say no, no deal, and we don't care where the chips fall, attaining equal footing with the Repukes, in Obama's eyes. Yes, we will stay home in 2012 and let Palin destroy the US.

Posted by: geodahir on December 8, 2010 at 10:23 AM | PERMALINK

@SFO - The proposal is for a temporary extension of all the tax cuts for 2 years, the $700 billion refers to the amount of revenue tax cuts for those singles earning above $200,000 a year and couples earning $250,000 will cost over 10 years.

So more like $140 billion, but that's still a HUGE amount of money that's been proven to provide almost no stimulus and resulted in negative net job growth since they were first implemented in 2001 and 2003.

Posted by: Kiweagle on December 8, 2010 at 10:25 AM | PERMALINK

No deal, no continuing resolution, no debt ceiling, no DREAM, no food safety, no DADT repeal. The Crazy wing gets reinforced in January and we go straight to shut down and default.

Not exactly a rosy scenario, but it looks more likely all the time.

Congressional Democrats screaming they've been betrayed is ridiculous. They didn't have the courage to bring Obama's tax plan up before the election. They've been silent since the election and now, with time running out and Obama gets what he can, they are outraged?

Posted by: Pug on December 8, 2010 at 10:26 AM | PERMALINK

"@SFO - The proposal is for a temporary extension of all the tax cuts for 2 years, the $700 billion refers to the amount of revenue tax cuts for those singles earning above $200,000 a year and couples earning $250,000 will cost over 10 years.

So more like $140 billion, but that's still a HUGE amount of money that's been proven to provide almost no stimulus and resulted in negative net job growth since they were first implemented in 2001 and 2003."

So what's your point?

Posted by: SFO in 2008 on December 8, 2010 at 10:28 AM | PERMALINK

Wouldn't it have been cool if the compromise had gone like this? OK, we'll let the tax cuts and unemployme­­nt insurance expire, but only if we agree to offset it by creating two million new government jobs aimed at rebuilding our nation's infrastruc­­ture, jobs that can be privatized later when the economy gets going again.

Just sayin'...

Posted by: chrenson on December 8, 2010 at 10:28 AM | PERMALINK

Right now it is about the next two years. We have the opportunity to put the Republicans in the same box that we were just in. That is, the dysfunction of the Senate, meaning the fact that the filibuster is broken means that being the party of NO works.

The Republicans, particularly their base, believes that in taking the house they control the agenda. Well, now the shoe is on the other foot. It is time to use their tactics to kill their agenda. It all starts with the Bush tax cuts. All we have to do to kill them is to say NO!

It will drive them crazy and there isn't a god damn thing they can do about it. Compromise on this before the thing even starts and you will have played right into their hands.

Posted by: SW on December 8, 2010 at 10:30 AM | PERMALINK

At this point, passing this bad deal may be the best of our options.

That's what makes me so mad.

Mad at Obama, certainly, and also mad at Democratic Senate leadership, for having steered circumstances to the point where this is our best option. And, at the risk of sounding "sanctimonious", that's my problem with Obama's style of deal-making -- it's not that he makes deals, it's that he doesn't put himself into positions where he can make better deals than the ones he's making.

If they'd been fighting on tax cuts before the election, and leapt when Orange Man said he might accept middle-class only extension if he was forced to, then calling the GOP "hostage takers" and rallying public opinion might have mattered. We've known when these rates were going to expire for 10 years, they could have chosen when to fight, and they picked the weakest moment, within days of the expiration, and just a little over a month before a Republican majority will be sworn in. Similarly with unemployment benefits.

I'm not an ideological purist, I appreciate the ability to make a deal. I just want some politicians who understand how to control circumstances to give them an advantage, not a disadvantage, in a negotiation.

Posted by: biggerbox on December 8, 2010 at 10:33 AM | PERMALINK

Do you think the Republicans ever consider having a Plan B? No, they know they will get what they want every single time as Democrats capitulate with barely a whimper.

With Obama's "compromise", Dems will once again trade a few short-term benefits (extending unemployment payouts, etc.) for utter devastation in the future. If the Bush redistribution-to-the-already-rich scheme isn't stopped now, it never will be. In not too many years, the tipping point will be reached and we can expect radical slashing of services and benefits. There simply won't be enough cash in the government coffers and eventually even our credit will be seen as too risky an investment.

In the meantime, the wealthy will ratchet up the shipping of factories and jobs overseas, diluting the influence of unions, slashing health and pension benefits in the workplace, cutting wages, dismantling as much as possible the social safety net, and ensure that as much as possible of our budget goes to debt repayment ("cut my taxes so I can save money which I will lend to the government and then earn even more money on the interest").

Then, rather than a few million with expiring unemployment benefits, we will see an entire nation in severe distress and a crumbling infrastructure, with no resources left to address the problems.

At that point, the conservatives' Plan A will be a complete success (and Grover Norquist have a spontaneous orgasm).

What is our Plan A???

Posted by: GringoNoraca on December 8, 2010 at 10:36 AM | PERMALINK

Obama wanted the tax cut vote before the election, but congressional Dems who were up for reelection scuttled the idea. A lot of good it did them...

Blame Obama all you want(he certainly deserves some of it), but the bulk of the blame lies with the political cowards in the Democratic caucus.

Posted by: Holmes on December 8, 2010 at 10:38 AM | PERMALINK

There should be more talk about things like taking away privileged cap gains rate status, lift FICA cap, having a fin-tran tax, etc - not just the base rates. On top of other things, it's sad and suspicious to me that Obama/Co won't push such things more. BTW you simply must read, albeit the writer doesn't sufficiently appreciate difficulties of getting things passed:
"Obama's "Tax Holiday": A Poison Pill for Social Security" Eskow has a point on how dangerous it is but I still think O wasn't trying to make trouble for SS. Indeed, Obama could say to veto any extension w/o complete lifting of cap (which obviates needed rate to go back anyway) etc. But he'd better show the guts, and an n-D chess player he ain't or hasn't been.

In any case Repiglies can't be true Rebaglies anymore (although few will notice - least of all, and ironically (?) - the curious cabal of the dumbest of the rabble with the wretchedest Villager dolts), they lost all credibility about "deficit reduction" with their pushing continuation of the grand turd-in-the-crown of Bushit policy: deficit-financed tax cuts for the rich.

Posted by: Neil B on December 8, 2010 at 10:38 AM | PERMALINK

"Why are you blaming Obama? It's Congress's fault."
"The House stepped up, where was the Senate?"
"It's not Reid's fault; there was no leadership from the White House."
"Why aren't people focusing on the real villains here, the Republicans?"

I feel like I've read thousands of these posts.

... What me? Yes, you! Couldn't be! Then who? Pelosi took the cookie from the cookie jar ...

Seriously, folks. Noting the dishonesty, weakness and incompetence of the congressional leadership does not magically make Obama's dishonesty, weakness and incompetence go away, or vice versa. It's called a clusterf&%k for a reason.

Posted by: somethingblue on December 8, 2010 at 10:40 AM | PERMALINK

I'm amazed at the number of progressives who INSIST that Republicans don't care what the public thinks, but then imagine that if we hold our ground the public will turn against Republicans and denounce them for hurting America; which will make Republicans back down and finally give in to our demands.

It won't happen. The Republican Party is now being held hostage by whackjobs and they aren't allowed to support this stuff even if they wanted to. And as we saw with this election, people don't care why the economy isn't improving. They just care that it's not improving. And so Democrats will suffer because we're expected to get shit done and Republicans aren't. And so Republicans are forced to keep obstructing us as much as they can, while Democrats have to pull out all the stops to compromise. I'm sorry, but that's the political landscape as it is. Obstructing is easy and building is hard, and we're tasked with the tough job of building. And that means we can't play hardball the way Republicans do.

Of course, many of these "liberals" don't really care about liberal policy. They just want to see Obama give the middle finger to Republicans, and are willing to accept seeing the unemployed get hurt. It's just collateral damage in their war against Republicans. They'd rather see us get nothing than to compromise anything. They say so themselves and imagine it makes them ideological purists. But it only exposes them as the partisans they are.

Posted by: Doctor Biobrain on December 8, 2010 at 10:40 AM | PERMALINK

All the moderates are doing is enabling the wealthy right to continue looting the country and securing their position such that a solid 80% consensus, if it existed, could not achieve its objectives by any means.

IF Chamberlain did save England, buying it time to prepare, how does that apply to the current situation? The good guys are NOT getting stronger in preparation for the inevitable battle. They are being slowly bled to death. Are the Democrats hoping to be bailed out by the rapture as well?

A 'finest hour' can never be experienced by backing down.

Posted by: Michael7843853 on December 8, 2010 at 10:41 AM | PERMALINK

Plan B?

Plan B is obvious: let the tax cuts expire. Let Republicans in the House attempt to rewrite some or all of the Bush era tax cuts and explain how to pay for them. Take the economic hits associated with reduced take home pay for many Americans. Restore tax rates that actually make some headway in paying down the debt and the deficit. Resume budget negotiations assuming that the tax rates will not be cut. Appoint a tax reform commission with more biparisan support, a short time frame and an agreement by Congress to take action.

There is a Plan B. It would probably be extremely painful. It might mean losing the Senate. IUt would probably mean losing the Presidency. But there is a Plan B. The real failure here - all along - is a failure of Democrats to make the affirmative case for the worst case: the Bush Tax Cuts were a disaster, a disaster that was clear from before they were passed. Ending that disaster is a reasonable next step. A painful, but reasonable one. Unless and until Democrats can make that case, a stick to it, they have nothing. And that's how we got to where we are.

Posted by: weboy on December 8, 2010 at 10:45 AM | PERMALINK

But what then? How would extended unemployment benefits pass for the millions of jobless Americans who need them?

Actually, Sherrod Brown answers Benen's question:

Well, if the vice president came in today and said, "Here's what we're going to do. We're going to every day, we're going to turn on all our ability to talk to the national to talk to the public in all 50 states in the White House. They have a pretty good machine there to do it. We're going to put all our efforts into that to get unemployment extended. And then the president is going to fly around the country to places and put pressure on Republicans. You, every day, on the Senate floor, will do it in the House, too. You stand up and ask to extend unemployment benefits. And you say, "We're staying here until New Year's." You don't think eventually Republicans would have finally said, "We give up"? They would have no choice in the end. We would have gotten not two or three of them, but I think we would have gotten six or eight or 10 of them to extend unemployment benefits. If the vice president walked in today and said that instead of doing what he did say to defend this package, that is really the opposite of what a lot of us campaigned on. It would be a very different place.

I'm going with Brown's political instincts over Benen's.

Posted by: square1 on December 8, 2010 at 10:56 AM | PERMALINK

First, you are not going to get the Dream Act or likely anything else the left wants even if you go along with the "deal"--capitualtion is a better word. Second, the deal establishes that the GOP owns Obama. I do not want to get racist here, but he will be their "boy". You want to extend the debt ceiling? Give us more tax cuts for millionaires. You want to fund the troops in Afgahnistan--give us more tax cuts for millionaires. You want to stimulate the economy? Privatize social security and defund EPA. You want to extend unemployment even more? Agreee to sign a repeal of the BFD--actually that might not be so bad considering what a botch that is. Third, the deal will tell the American people that everything the GOP has been saying about the Democrats and Obama is true and the GOP will entrench itself in Congress and the White House until it simply decides that elections are too costly and we amend the constitition to simply have presidents for life. Those folks will be picked by the top 2 % based on their ability to keep the rable in line. As to plan B if enough Democrats stand with Bernie Sanders, step 1 should be Obama's resignation. he does not have the stomach for politics and is a failure. Biden is a blowhard, but at least he is a Democrat and not a rich one at that. Every week he pleads to the American people to call their GOP Congress person and ask them to extend unemployment insurance and provide some stimulus to the economy. Biden will point out that with the expiration of Dumbya's tax cuts and our new scheduled withdrawal from Afgahnistan and the closing of half our military bases around the world we have our fiscal house in order and can afford to provide some more assistance to the unemployed and we can spend some more to stimulate the economy. The GOP will likely balk but in 2012 everyone will know what the GOP stands for and maybe this country has a future. Personally, I am looking at my ability to immigrate to Canada based on my wife's citizenship. Hate to pay the taxes and give up on a country that my ancestors came to 170 years ago, but if I wanted to live in a Banana Republic I would choose one that is warmer than the upper midwest.

Posted by: Terry on December 8, 2010 at 10:58 AM | PERMALINK

Totally agree with commenters placing the blame at the feet of congressional Democrats. They weren't willing to fight before the election, when Dems still had some leverage, so now they're trying to look sanctimonious. (Hey, Sen. Landrieu -- you voted for these damn Bush cuts in the first place! Sen. Boxer -- you were the one who didn't want to vote before the election!)

Obama is doing exactly what he said he would do and what he did in Illinois. He is now, and always has been, a pragmatic deal-maker. The good bills he got passed in the Illinois Legislature always involved giving up something he wanted.

Yes, I think he probably gave up too much here, but he got no backing from the senators in his own party. Senate Dems weren't willing to fight, so he did what he had to do to keep the middle-class tax cuts and extension of unemployment benefits.

And can we agree on one thing? It helps no one but Republicans to be seen as whiny complainers. There's a reason why party discipline works. It hasn't been a top priority for Obama, and it certainly isn't a priority for Democratic senators.

Posted by: Molly Weasley on December 8, 2010 at 11:00 AM | PERMALINK

..the Bush Tax Cuts were a disaster, a disaster that was clear from before they were passed.

No politician is willing to tell the precious middle class that they just might have to pay for their benefits. You know, like Medicare and Medicaid, Social Security, two wars they've supported, the Medicare drug plan, the military and all the other spending they support.

Let all the frigggin' tax cuts expire. That's what Reagan's budget director, David Stockman, says. He's probably right. It's time to pay up.

It's a catastrophe for taxes to go to where they were when Bill Clinton was president? If you believe that, then you agree with the Bush tax cuts.

Posted by: Pug on December 8, 2010 at 11:02 AM | PERMALINK

Biobrain, you and others picking on progressive complainers are wrong. You falsely claim they (I have enough mixed feelings now to call everyone "they") are just being partisans, purists etc. But no. First, the very real worry (as in the excellent piece I linked shortly above) is that these compromises do not move the ball, but are in fact setups for something worse later. They will actually hurt us long term. Being against what could be worse than a mere "half-loaf" is not being a purist! I'd say, it's (as ironic as you may feel) being a realist.

Think about the long-term. It might be better to insist the Repubs/dogs pass an adjusted bill (with not only tax raises for income above say 1M instead of 250k, which really is not so damn rich these days) but fin-tran taxes, raise up worthless cap gains giveaways, etc. If they vote "no", everyone else can say: You had a chance to keep some tax rates down, and *you* wouldn't vote for it. If the Republicans are enabled then what about our long-term future? Some help for some unemployed people now isn't going to make up for massive destruction of the whole FDR structure down the road. Meanwhile, we still have to vote for Dems to shore things up, so try harder during primary season before the LOTE dilemma comes up.

Posted by: Neil B on December 8, 2010 at 11:05 AM | PERMALINK

When I posed this question yesterday to some Capitol Hill aides I know, they said they'd recommit to fighting even harder for the original Obama tax plan -- permanent breaks for those under $250k, Clinton-era top rates for those above $250k. If/when this week's compromise goes down, Republicans, they said, would likely cave and accept the Democratic approach.

Complete fantasy. Here's what will happen if the compromise plan gets defeated:

1. Dems propose extending lower rates only for income under $250k. Repubs filibuster, bill fails. Then Dems propose lower rates for under $1M. Same result. Headline: "GOP blocks Democratic plan to raise taxes on high earners".

2. Congress adjourns, rates automatically go up.

3. In January, Repubs in House pass permanent extension of all Bush rates (or even lower).

4. Bill passed by house succeeds in Senate, with votes from 4-5 Dems. Reid refuses to filibuster, saying "let's put this issue behind us". Headline: "Congress approves broad tax cuts over Democratic opposition".

5. Obama spends the next two years irrelevant. Unemployment stays above 9%.

6. A Republican is inaugurated the 45th president of the US in January 2013.

Democrats should think very, very carefully about whether they want this scenario to play out.

Posted by: Basilisc on December 8, 2010 at 11:07 AM | PERMALINK

(My last post got a piece chopped out):

Biobrain, you and others picking on progressive complainers are wrong. You falsely claim they (I have enough mixed feelings now to call everyone "they") are just being partisans, purists etc. But no. First, the very real worry (as in the excellent piece I linked shortly above) is that these compromises do not move the ball, but are in fact setups for something worse later. They will actually hurt us long term. Being against what could be worse than a mere "half-loaf" is not being a purist! I'd say, it's (as ironic as you may feel) being a realist about the long term. Do you care about that? The other side sure as hell does and is planning accordingly.

Second, the critics really don't like what's happening, it's not just some mindless hatred for "whatever" the other side does or wants - doing that is the Republicans job. Do you get that, or are you Villager hacks?

Finally, it's hypocritical and yet-more divisive and destructive for supposed defenders not eating our own etc, to light in here with their own sometimes nasty attacks on the people who mostly worked so hard to get Obama and other Democrats elected, are most concerned with the public well being, and most aware of the danger posed by a vile hostage-taking crew. (And kudos to Obama for using that phrase, he isn't so spineless all the time OK? But less picking on us, OK?) I'm not including the worst putdown artists and the idiotic "let them win so America can see how awful they are" crowd. So shame on you.

Think about the long-term. It might be better to insist the Repubs/dogs pass an adjusted bill (with not only tax raises for income above say 1M instead of 250k, which really is not so damn rich these days) but fin-tran taxes, raise up worthless cap gains giveaways, etc. If they vote "no", everyone else can say: You had a chance to keep some tax rates down, and *you* wouldn't vote for it. If the Republicans are enabled then what about our long-term future? Some help for some unemployed people now isn't going to make up for massive destruction of the whole FDR

Posted by: Neil B' on December 8, 2010 at 11:08 AM | PERMALINK

Plan B is to let the tax cuts expire and take billions out of the economy and deepen the recession. That will improve our prospects in 2012, eh?

I don't get lefty outrage over this deal. Obama negotiates a deal to help millions of unemployed and provide a substantial second stimulus and gets whacked for it by his so-called base. It's as if they don't care about actual governance.

Posted by: AK Liberal on December 8, 2010 at 11:11 AM | PERMALINK

Hey Basilisc, don't you realize Obama has a veto pen? If he has guts, he will refuse to sign any bill other than an acceptable one in the vein most of us understand. So what was your point ....

Posted by: Neil B on December 8, 2010 at 11:13 AM | PERMALINK

AK Liberal, are you saying you accept the conservative claim that tax cuts stimulate the economy? Then why be a "liberal"? Of course if Congress could have passed stimulative things to do with the new revenue, it would be moot since that would do the job instead, and better.

Posted by: Neil B' on December 8, 2010 at 11:15 AM | PERMALINK

is the plan to simply punt on New START ratification, DADT repeal, the DREAM Act, food safety, and health care for Ground Zero workers, hoping for the best in the next Congress?

Correct me if I'm wrong, but my understanding is we're not going to get any of that even if we throw $700 billion at the GOP.

Posted by: kc on December 8, 2010 at 11:16 AM | PERMALINK

Couldn't the Senate pass a limited version of the Obama tax cut ($250K or less) as a reconciliation bill? There are the votes for that, right?

Posted by: Dennis on December 8, 2010 at 11:20 AM | PERMALINK

AK Liberal wrote: "I don't get lefty outrage over this deal."

Then you are not paying attention, because a great many "lefties" have explained at length and in detail why they are "outraged" -- including on this very comment thread. You may not agree with them, but I don't get why you don't "get" what they are saying.

Posted by: SecularAnimist on December 8, 2010 at 11:20 AM | PERMALINK

The major problem to me is trusting the republicans not to argue against raising the debt ceiling, and then extracting the clawing back of unemployment benefits to get that done.

They have no shame, and Obama seems either totally blind to this, or is willingly giving them the extra power they need to shape our increasingly abysmal future.

I still say let all the tax cuts expire and let the chips fall where they may. If the people on Wall Street have less money to gamble with they might even begin to be more prudent.

Everyday people in the middle class might see somewhat less in their paychecks, but they never seemed to notice the pittance that Obama's tax cuts in the stimulus added to the checks.

By now the working and middle classes are so used to being victimized by the rich, that we'd have to wonder if and/or how much are they going to complain? (They ought to complain about the enormous transfer of their wealth to the rich, but apparently they don't even know about it, even less than they knew Obama's lowered their taxes.)

Posted by: jjm on December 8, 2010 at 11:23 AM | PERMALINK

Wait, there's a "plan" anything?!

You could have fooled me, and Americans I daresay should suffer until the yellow ribbon fantasy adventures become a little more self restrained at least. Pay your taxes or pay the Republicans off? I'll pay my taxes!

Posted by: Trollop on December 8, 2010 at 11:24 AM | PERMALINK

It sucks, but we have to take the deal, I think.

If the deal is rejectedn, there will be no more help of any kind for the economy before 2012. That doesn't look good, and that's without any debt problems from Europe screwing things up even more. What's a higher priority- getting 13 months of UI or getting revenge for the Bush tax cuts? It's a lot like HCR- were you more interested in helping people or nailing the insurance companies? What if you can't do both at the same time?

In the end, letting the Bush tax cuts expire will hurt the Dems in the long run, because it gives them a wimpy way out without really making and selling their case. The top end tax cuts should be actively repealed. Make it THE issue in the 2012 race. As it stands now, no one can run for president without promising some sort of tax cut. Reaganism still hasn't been refuted in the eyes of the public. Unless it is in the near future, Dems are screwed anyway. Take the temp extension, then make raising the top rate to 50% the centerpiece of the 2012 campaign.

Posted by: Tim H on December 8, 2010 at 11:24 AM | PERMALINK

@SFO - You don't think it undermines your argument when you use information that is factually incorrect? Isn't that what Republicans do every day?

Posted by: Kiweagle on December 8, 2010 at 11:33 AM | PERMALINK

Neil B -

Why would Obama veto the bill? He knows his preferred alternative (just sub-250K) doesn't have the votes. And he knows that he'll get blamed for gridlock that keeps tax rates "high" (not really high, but no one knows that). And there's no way he'll try to negotiate another compromise, given that members of HIS OWN PARTY rejected his previous compromise.

Sure, it would be great if Dems had fought for the sub-250K option as a united front from the start, including making their case consistently to the public, but they chose not to. And this is the consequence. So for Dems in Congress, the choice is really between this deal now, and something much, much worse next year.

Posted by: Basilisc on December 8, 2010 at 11:42 AM | PERMALINK

This is why the "kicking the can down the road" phrase resonates so well, because this is exactly what just happened. It is not difficult to understand why the President made this deal, given the people he has to negotiate with, and I get that part of it. Republicans as a group (or mob) are greedy, unreasonable, selfish, narrow-minded, etc., and our dumbed down electorate is still easily gamed. But the larger context here is being lost. This deal, like those before it, does not change the structural causes of our problems. As others have stated, the Republcans will be back in two years demanding more of the same. The "too big to fail" banks are still too big to fail and they will be bailed out again for that reason, and we will hear the same rationalizations. This happens because the banks were not broken up, and instead they were empowered to do us more harm. In this latest deal, the tax code has not been restructured in any meaningful way to prevent similar deals in the future, and they will happen. Both parties kicked the can down the road yesterday.

Posted by: max on December 8, 2010 at 11:49 AM | PERMALINK

Basilisc, Well, maybe - but do read jjm's comments. And people will know that Obama is willing to sign a certain type of Bill, and can blame Repubs for not offering it. Finally, I'm sick of having to think "sure it would have been great if ..." I want those assholes to do that, then; OK?

Posted by: neil b on December 8, 2010 at 11:50 AM | PERMALINK

Remember , WE have the senate, so the filibuster rule is going to be set to OUR liking this year, now that we know what is done with the filibuster by the disreputable ones.The bills already passed, 100's , can get passed. They have the house, so Obama's bill needs to get thru NOW.Its the best we will get, get it thru your thick skulls. The people left us NO choice . . .

Posted by: Michael on December 8, 2010 at 11:55 AM | PERMALINK

"Couldn't the Senate pass a limited version of the Obama tax cut ($250K or less) as a reconciliation bill? There are the votes for that, right?"
Posted by: Dennis on December 8, 2010 at 11:20 AM

If I understand the process (and I may not), to use reconciliation there has to have been a budget resolution passed containing instructions that the bill then "obeys", no budget resolution was passed this year; therefore no instructions

Posted by: Johnny Canuck on December 8, 2010 at 11:55 AM | PERMALINK

What will happen when the Social Security tax holiday runs out and Republicancers start hollering about how Americans can't stand a tax increase again. Obama is opening the door to gut social security and he wants us to bend over now for the big one so we can bend over for a bigger one later. FDR started Social Security during a recession far worse than this one and our current president can't even be wise enough to leave social security alone. What next Obama, privatizing social security?

Posted by: tko on December 8, 2010 at 12:28 PM | PERMALINK

Plan B is to let the tax cuts expire while hollering very loudly that this plan would kill Social Security.

Then find $700B worth of projects and public jobs that have been slated to be cut (such as the New York/New Jersey tunnel that cost $8B) and present a plan to do stimulus spending for those very specific jobs and people. Total it up. Then say "We want to put people back to work and here's the list but the republicans want to spend that $700B and put give it to billionaires" (not millionaires).

Of course this is simple messaging and I'm sure if I had a trillion dollar budget I could pay some people to improve upon this. I could do that because I would want to do that and I have a budget. Obama could do that too but the magic part of this formula is that you have to actually want to do that and it's entirely unclear that he wants to since he likes to surround himself and all his commissions with Blue Dogs.

Posted by: Observer on December 8, 2010 at 12:37 PM | PERMALINK

AK Liberal,

Plan B is to let the tax cuts expire and take billions out of the economy and deepen the recession.

Tax cuts are not stimulative.


Posted by: Joe Friday on December 8, 2010 at 12:51 PM | PERMALINK

90% of the "progressive" criticism on this one seems to come down to this: "Obama should have been willing to play chicken with the Republicans and gamble that they wouldn't dare screw over the poor and the unemployed just to get tax cuts for the rich extended."

These would be the same people who invented the term "Catfood Commission." Anything deemed a risk to hypothetical poor people in the future is worthy of enormous outrage. But real, actual poor people, people who, on there munificent weekly benefit of 302.00 are even now at least eyeing the petfood aisle every time they go to the store--to hell with them. Throw 'em under the bus (to use one of their favorite phrases), let 'em starve if that's what it takes to keep those goddam rich from getting more tax cuts! If worse comes to worse, they'll be martyrs to the Revolution, which is as good as eating. Or should be.

And anyway, we say he should have taken this risk with clean consciences because we know, we just know with absolute 100% certainty, that Republicans would have caved. That's right. People who openly blame unemployed people for being unemployed, people who've repeatedly filubustered unemployment extensions all year AND PAID ABSOLUTELY NO POLITICAL PRICE FOR IT BECAUSE OUR GUTLESS, COWED MSM REPORTS IT AS "SENATE BLOCKS UNEMPLOYMENT EXTENSION" OR "SQUABBLING IN CONGRESS DELAYS UNEMPLOYMENT EXTENSION" wouldn't dare not extend them because it would be "political suicide."

The election's over. Not another one for two years which, as shown by the widespread progressive amnesia regarding Obama's efforts to get Democrats in Congress to deal with this before the election, might as be prehistory as far as the 2012 electorate is concerned. In the election, the Republicans paid absolutely no price whatsoever for blocking social security. Literally dozens of Republican candidates openly ran on platforms claiming unemployment has to end because it increases the deficits and encourages lazy trash to not to take any of the plentiful jobs availible to them AND PAID NO PRICE FOR IT. And despite that, this is a sell out because smart people like John Aravosis who bear no actual responsibility for anyone just know the Republicans would have caved.

Given that I know most progressives actually do care about poor people, and not simply in the abstract, it makes one suspect that what it's really about is yet another reframing of events so as to justify their own rage, to which they are as addicted as any heroin user.

Posted by: Another Steve on December 8, 2010 at 12:53 PM | PERMALINK

I think it was mentioned above. This deal gives Republican ownership of the problem. Right now, although they caused the economy to collapse, they have no vested interest in insuring the problem is fixed. The deal makes them Obama's partner. If the economy starts to sink again the public will expect the Republicans to act. Being Republicans I am pretty sure any steps they take will fail, but the public will be looking at them as well as Obama.

Congressional Democrats as a group all need to be retired for the good of the country. What have you done today to insure the early retirement of every congress critter or senator holding a leadership position in the Democratic caucus? Maybe we ought to create a counter point to American Cross Roads or a movement called the Children of Liberty to act up at Democratic functions. I bet we could be just as effective as Dick Armey or Karl Rove. Our elected Democrats have it too easy. They need to be forced to do their jobs.

Posted by: Ron Byers on December 8, 2010 at 12:55 PM | PERMALINK

McConnell was able to get Obama to surrender proactively and didn't even break a sweat.

The scary part is trying to imagine how he would be able to face down a Putin, Kim Jong Il or an Ahmadinejad.

Posted by: dualdiagnosis on December 8, 2010 at 12:56 PM | PERMALINK

Another Steve

Apparently those unemployed over 99 weeks don't show up on Obama's or most peoples' radar judging from how they aren't mentioned here or in Obama's tax sellout/shotgun stimulus.

Posted by: tko on December 8, 2010 at 1:01 PM | PERMALINK

You may not agree with them, but I don't get why you don't "get" what they are saying.

Correct, I don't agree and I think the logic is flawed. It also strikes me as an overtly emotional reaction with dangerous consequences.

Moreover, I find it incredible that people that are ostensibly on the side of the little guy think that taking billions of dollars out of the economy and out of the pockets of the unemployed at this juncture is good politics or good policy. Arguments for doing this break down to "tax the rich" and "give me a stick with which to beat Republicans."

That train left the station with the mid-term elections. Now we have an opportunity to help people and provide a second stimulus to the economy, all of which will help advance the progressive agenda by proving to ordinary, not-politiclly-engaged voters that we can deliver on the issues that they care about.

As Basilisc notes, up the thread, failure to accept the deal provides the GOP with big opening in the next Congress. So, tell me again why I should be pissed off about this deal, 'cuz I really don't get it.

Posted by: AK Liberal on December 8, 2010 at 1:13 PM | PERMALINK

Tax cuts are not stimulative.

Not as stimulative at direct spending, but still the opposite of taking money out of the economy which is contractive.

Posted by: AK Liberal on December 8, 2010 at 1:16 PM | PERMALINK

When will Democratic pols learn that you don't back Republicans into a corner, thinking they'll "cave" due to shame, embarrassment, not wanting to appear insane, or any other thinking man's reasoning.

The Republicans have Fox News and the rest of the right-wing echo chamber to provide cover for whatever they might want to do. When things get too bad even for Fox to provide cover for, then Fox simply changes the (R) after the offending Republican(s) name to a (D).

Hopefully this will wake Dems up to the fact that Republicans are engaging right now in a bloodless civil war against the prevailing government of this country, and have been doing so for some time. Dems need to abandon ANY thinking along the lines of "Well, Republicans simply must do this or that when faced with the proposition of this or that...."

Republicans ARE NOT going to do it. Things are set up right now where they could eat their constituents' babies and FAUX would convince the country that NOT doing so would be bad for small businesses and would raise taxes. Oh, and that NOT eating babies would be unpatriotic.

This is the Republican Party of today, and the people who vote for them.

Posted by: June on December 8, 2010 at 1:23 PM | PERMALINK

Dems' strategy should be to reject this compromise and fight for unemployment extension, the only thing that's truly critical in the package (and its most unequivocally popular element). GOP leadership has now accepted in principle the usefulness of that, so it would be more difficult for them to justify continued opposition to it.

The other goodies for the middle class in the compromise may not do much good and will certainly do some harm to the deficit and SS, so their loss is not something to fret about.

Meyerson in WaPo has a good piece today on why the compromise is lousy.

Posted by: smintheus on December 8, 2010 at 1:24 PM | PERMALINK

The only way to sign off on this deal is if it comes with the debt limit extension. Otherwise this is the next hostage. And the deficit hawks will neutralize the supposed stimulous in it with offsetting budget cuts. If you don't see that coming you are a sucker and deserve to be taken to the cleaners.

Posted by: SW on December 8, 2010 at 1:29 PM | PERMALINK

Give the Rs their two year tax cuts for the rich in exchange for the Rs voting for the ENTIRE Democratic agenda: middle class tax cuts & credits, START, DREAM, unemployment insurance, repeal DADT, whatever else I'm forgetting, AND to confirm the entire backlog of nominees that have gotten out of committee. ALL OR NONE, in ONE VOTE. I have no idea if that can be done but it's the only way to make sure the Rs don't back out. They are not to be trusted. Slimy weasels.

Posted by: Hannah on December 8, 2010 at 1:45 PM | PERMALINK

Face it, fellas, the ship is going down since hitting that iceberg in November. Hang on to the life preservers and tread water as long as we can before hypothermia sets in and keep telegraphing the SOS. Hope is going to take some serious audacity.

Posted by: beejeez on December 8, 2010 at 1:51 PM | PERMALINK

That is the hope hannah, but democrats did not wield the leverage, we are the ones who wanted unemployment and middle class tax cuts, they already had the taxes and a republican house. In order to focus on anything else besides the tax cuts, this needed to be taken care of.They had already blocked unemployment.(which will be noted come election time, among other things)Notice first thing after this deal, is DADT. . .

Posted by: Michael on December 8, 2010 at 2:29 PM | PERMALINK

AK Liberal,

Not as stimulative at direct spending, but still the opposite of taking money out of the economy which is contractive.

That is nonsensical.

Tax cuts are not stimulative, directly or indirectly, therefore withdrawing them is neither anti-stimulative or “contractive”.

You’re regurgitating failed RightWing supply-side economic theory when we have a demand economy.


Posted by: Joe Friday on December 8, 2010 at 4:27 PM | PERMALINK

You’re regurgitating failed RightWing supply-side economic theory when we have a demand economy.

Okay, let's think this through, because none of this has a thing to do with supply-side economics or right wing talking points. Middle class and lower income earners mostly spend what they earn. If the money is not in their paychecks, it won't get spent. That means less money spent at the Piggly Wiggly or the Home Depot which means fewer jobs.

Please notice that I am not talking about the rich. They don't spend enough collectively to drive the economy, but the rest of us do. So an extra few hundred or a thousand bucks in everyone's checking account makes a big difference collectively. Take that money out of the economy by raising taxes and it will have contractionary effect. That might be okay if the economy is robust and expanding, but it's not.

Remember, most wage earners aren't rich, so the proposed payroll tax cut is stimulative, because most folks spend most of what's in their paychecks. The extension of unemployment benefits is also stimulative, because it's money folks won't otherwise have to spend. And you better believe that most folks on unemployment benefits spend every penny.

Posted by: AK Liberal on December 8, 2010 at 5:35 PM | PERMALINK

AK Liberal,

Middle class and lower income earners mostly spend what they earn. If the money is not in their paychecks, it won't get spent. That means less money spent at the Piggly Wiggly or the Home Depot which means fewer jobs.

Except that demand has already collapsed, and as was shown with the failed Chimpy Bush “Stimulus Checks”, giving American more money just causes them to primarily save it or pay down debt, neither which is stimulative.


Take that money out of the economy by raising taxes and it will have contractionary effect.

Nope.

Still merely RightWing propaganda.

Tax cuts are not stimulative. The withdrawal of a non-stimulus is not contractionary.

President Clinton raised taxes on the Rich & Corporate in an economic downturn and the economy flourished.


Remember, most wage earners aren't rich, so the proposed payroll tax cut is stimulative, because most folks spend most of what's in their paychecks.

Nope.

See Chimpy Bush failed “Stimulus Checks” above.


The extension of unemployment benefits is also stimulative

True !

But of course, YOUR point was about the tax cuts, now wasn’t it ?


Posted by: Joe Friday on December 8, 2010 at 6:46 PM | PERMALINK

AK Liberal, I got your back (though you're doing just fine on your own). I thought that the notion that even middle class tax cuts can't be viewed as stimulative or "progressive" had rightfully faded away long ago. It's been shown time and time again and there is virtual consensus among economists that lower taxes for the middle class, especially during a recession, are a reliable source of economic stimulus, and that letting those taxes go up would create a serious drag on economic recovery.

By the way, has anybody read Dayen's response (linked at the end of the article)? It's kinda funny how he doesn't address most of the questions that Benen closes with, and I couldn't believe my eyes when I read his completely unsupported assumption that Republicans would buckle and extend unemployment benefits (they have apparently "signaled enough weakness on unemployment benefits that a short-term extension can probably get wriggled out." Huh?).

Stuff like this seriously does make me question just how much some of these self-proclaimed "progressives" actually care about the real-world impact that even temporary expiration of unemployment benefits and middle class tax cuts would have on millions of struggling people.

Posted by: William on December 8, 2010 at 6:54 PM | PERMALINK

Plan B...Endure till we get enough money back into our treasury to actually afford to give SS recipients $250 and start a public works project converting factories to produce windmills and solar panels on every roof and in every neighborhood selling excess energy back to utility companies.

Decide not to give into republican blackmail, extortion and hostage taking. Repeal the Reagan tax cuts on the top 2% and rebuild our infrastructure instead of always selling out to billionaires who are turning our country into a plutocracy.

Change the senate rules next session eliminating the filibuster (repubs would do it in a heartbeat)so we can no longer be held hostage by a minority.

The country would be well on the way to healing if not for the abuse of this senate rule. Leave it to the people to decide the majority of the senate, not the senators. This is war but it's the plutocracy verses the Democracy...money against people. Time for FDR to return before Mitch McConnell "demands" that Obama resign from office in addition to keeping the Bush tax cuts and in exchange for keeping unemployment benefits for another yr and the New START treaty.

IF NOT NOW...WHEN?

Posted by: bjoibotts on December 8, 2010 at 7:35 PM | PERMALINK

"...Pay your taxes or pay the Republicans off? I'll pay my taxes!..."
Posted by: Trollop on December 8, 2010 at 11:24 AM

Excellent! I'm going to shout this phrase from the rooftops. We all should. Finally a perspective that even Tea Party people can understand...

Pay your taxes or pay off the republicans.

Either pay it in taxes and get something back or pay it to republicans and get nothing back.

btw... Repubs will have to deal with all this legislation sooner or later...it's not going away. Let them demonstrate how incompetent they really are.

Posted by: Botts on December 8, 2010 at 7:58 PM | PERMALINK

William,

It's been shown time and time again and there is virtual consensus among economists that lower taxes for the middle class, especially during a recession, are a reliable source of economic stimulus, and that letting those taxes go up would create a serious drag on economic recovery.

Gibberish.

The independent non-partisan Congressional Budget Office rated eleven different proposed stimuli, and tax cuts came in DEAD LAST at number eleven:

CBO


Repeating failed RightWing propaganda makes you look foolish, and you don’t even have your own “back”, dude.


Posted by: Joe Friday on December 8, 2010 at 8:19 PM | PERMALINK

@ Joe Friday:

The right-wing talking point is that tax cuts pay for themselves or result in increased tax receipts. We all know that's bullshit and that's not what I'm talking about.

There's an interesting discussion of the stimulative effect of various components the American Recovery and Reinvestment Act of 2009 in a paper by the Congressional Research Service, "Economic Stimulus: Issues and Policies."

http://assets.opencrs.com/rpts/R40104_20091209.pdf

The take away is that tax cuts are not as stimulative as direct government spending and they need to be properly targeted to maximize their effect. That's a different argument than saying that they have no stimulative effect. Accusations of "regurgitating right-wing talking points," is not a persuasive argument to one who's political heros include FDR.

Posted by: AK Liberal on December 8, 2010 at 8:27 PM | PERMALINK

Or you can scroll through the chart at the bottom of this blog post.

http://economix.blogs.nytimes.com/2010/12/07/just-how-stimulating-is-the-new-tax-cut-jobless-benefit-deal/

CBO figures that middle and lower income tax cuts in the ARRA have a multiplier effect of 1.5. Not as good as direct investment, but far from no stimulative effect. I guess that's just more right wing talking points, though.

Posted by: AK Liberal on December 8, 2010 at 8:38 PM | PERMALINK

AK Liberal,

The right-wing talking point is that tax cuts pay for themselves or result in increased tax receipts.

And that tax cuts are stimulative. They’re not.


The take away is that tax cuts are not as stimulative as direct government spending and they need to be properly targeted to maximize their effect. That's a different argument than saying that they have no stimulative effect.

Targeted or incentivized tax credits do indeed work, but are a whole other ball game from income tax cuts.


Accusations of "regurgitating right-wing talking points," is not a persuasive argument to one who's political heros include FDR.

I calls ’em like I sees ’em.

Not to mention, FDR raised taxes on the Rich & Corporate during the Great Depression, and the economy soared.


CBO figures that middle and lower income tax cuts in the ARRA have a multiplier effect of 1.5.

Only if you stand on your head and rub your tummy at the same time.


I guess that's just more right wing talking points, though.

Yep.


Posted by: Joe Friday on December 9, 2010 at 12:09 AM | PERMALINK

Your moniker suggests that you're interested "the facts." Yet, you offer opinions and pontification with no supporting evidence. In other words, you don't know what you are talking about.

Posted by: AK Liberal on December 9, 2010 at 8:14 AM | PERMALINK

Technically, it's an "estate tax" on the federal level, not an "inheritance tax".

An "estate tax" is a tax imposed on the estate, based on tax rates that apply to the entire estate regardless of who the beneficiaries are (except for the marital and charitable deductions).

An "inheritance tax", by contrast, is a tax imposed on the right to inherit. In the latter case, the relationship of the beneficiary to the decedent determines the "tax class" of that beneficiary. This, in turn, determines the rate of tax imposed on that right to inherit by that beneficiary.

OH currently has a standalone "estate tax" return. A number of states have standalone "inheritance tax" returns (including IN, IA, KY, MD, NE, NJ, PA, and TN). Two of these states (MD and NJ) have both.

Currently 14 states have a "decoupled estate tax return", based essentially on the federal estate tax law as it was in 2001 (with some variations in tax rates and applicable exclusion amounts).

Finally, there are currently 30 states with neither an estate tax nor an inheritance tax.

Posted by: Vince Lackner on December 9, 2010 at 10:10 AM | PERMALINK

Say what you want about Obama and even Clinton and their terms in office but you will get exactly what you deserve by adhering to Bush-era thinking and the same wrapped in a bow with Palin.

Posted by: Usiku on December 9, 2010 at 11:07 AM | PERMALINK

AK Liberal,

So you got NUTHIN’ ?


Posted by: Joe Friday on December 9, 2010 at 1:03 PM | PERMALINK

Searched Google and landed up here - its good so I posted the link on my Facebook account !

Posted by: generator accessories on December 18, 2010 at 8:37 AM | PERMALINK




 

 

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