Editore"s Note
Tilting at Windmills

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December 10, 2010

A MODEL OF CONSISTENCY.... President Obama talked with NPR's Steve Inskeep this morning, and the host passed along a question from a listener. The audience member told Inskeep, "Please ask him how keeping the tax rate for the richest the same as it has been for a decade creates one single job." The president replied:

"It doesn't, which is why I was opposed to it -- and I'm still opposed to it.

"The issue here is not whether I think that the tax cuts for the wealthy are a good or smart thing to do. I've said repeatedly that I think they're not a smart thing to do, particularly because we've got to borrow money, essentially, to pay for them.

"The problem is, is that this is the single issue that the Republicans are willing to scotch the entire deal for. And in that circumstances -- in that circumstance, we've got, basically, a very simple choice: Either I allow 2 million people who are currently getting unemployment insurance not to get it, either I allow the recovery that we're on to be endangered, or we make a compromise now."

I've seen some suggestions in recent days that the president is somehow "flip-flopping" or abandoning the position he held before. One can consider the tax deal a disaster or a worthwhile agreement, but in either case, Obama's position really hasn't changed.

Dave Weigel put together an interesting item the other day, noting Obama's rhetoric on taxes during the presidential campaign. He highlighted four examples: a CNN interview in June 2007, a primary debate in April 2008, a campaign speech in May 2008, and a general election debate in October 2008.

In each case, the position was the same: then-candidate Obama intended to keep Bush-era rates in place for families making up to $250,000. For those who make more, they'd still get a cut on their first quarter-million in income, but would return to Clinton-era top rates.

But that's still his position. The president gave a speech in September, as the midterm election season started to heat up in earnest, and he talked up his approach to tax policy. There was no difference from the line he took back in June 2007.

There was no reversal and no "preemptive concession." If Congress had sent him the tax-cut compromise he designed, he'd have signed it in a heartbeat.

So why strike the deal? Because congressional Democrats balked at voting before the midterms; the party lost its leverage; the president got stuck in a box with limited options; and he negotiated the best deal he could against shameless adversaries while looking out for the middle class and the unemployed. The result is an agreement that credible liberal economists believe will have a positive impact on the economy.

Love, hate, or tolerate the agreement, this isn't a "flip-flop."

Steve Benen 12:35 PM Permalink | Trackbacks | Comments (75)

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Obama said scotch: he's racistagainst the people who built this country

Posted by: Dummy on December 10, 2010 at 12:45 PM | PERMALINK

LOL @ Dummy. You're my new most favorite person in the world!

Posted by: Jabari on December 10, 2010 at 12:49 PM | PERMALINK

How DARE you criticize Nancy Pelosi! Everyone knows it's all Obama's fault that the House didn't bring a tax plan up for a vote before the elections. He's the leader of the party and he has the bully pulpit, so he can do anything he wants. Bush did.


Posted by: John S. on December 10, 2010 at 12:52 PM | PERMALINK

Steve let me be the first to proclaim you as an Obama Apologist with little to no sense of irony whatsover.

Posted by: Paul on December 10, 2010 at 1:00 PM | PERMALINK

Quite correct. Barack Obama isn't a king. He isn't Santa Claus, or the Easter Bunny. He can't pick up his royal wand and decree what must happen to tax rates.

If he does nothing, everybody's rates will go up. That wouldn't be what he ran on either.

Obama doesn't have 60 votes. (It's amazing to see how many people can't seem to process this fact.) Unless he wants to do nothing at all, the GOP has to be part of the deal, and maintaining all the lower rates is the main thing they want.

Elections matter. We got our clocks cleaned this fall.

Posted by: bob somerby on December 10, 2010 at 1:02 PM | PERMALINK

I know there is a TV in the Oval, and I pray it is tuned to C-SPAN 2.

Bernie Sanders seems to be a lone voice here. Jimmy Stewart redux?

Posted by: DAY on December 10, 2010 at 1:02 PM | PERMALINK

Agreed, not a flip-flop. However what he won't admit to is that extending that tax break for another 2 years is as good as making them permanent. THAT is the problem with the deal. It has severe long term effect.

I agree that letting the unemployment benefits lapse would be atrociuous but he needed to stand his ground, and call the
Non their BS. Hang the loss of those benefits around the necks of the GOP. I do believe they would cave on them but it wild get ugly and take until the new session begins.

As it stands the GOP will sell this as that THEY saved your unemployment benefits AND the tax cut.

Obama wins the ultimate short term result but will get virtually no credit from those that it directly affects.

The 30 years of massive failure o sfupply side economics needs to be exposed needs to be exposed. This deal killed any short term hopes of that.

People are clueless as to the reasons for stagnant middle class income. They are eating a turd sandwich and smilinG while doing it. Any hint of bad taste MUST be due to the government taking their money That is the brilliance of the GOP.

Posted by: Simp on December 10, 2010 at 1:03 PM | PERMALINK

The RepubliConfederate Party will not allow the government to move until the rich get to keep their tax cuts.

Well, 'morans' of this country. You keep voting for the RepubliConfederate's, so don't complain.

Doeas it occur to anyone that we're all sitting here with front row seats as the American Empire dissolves in a Fourth World nation? Even Banana Republics have more equal distributions of wealth!

Posted by: c u n d gulag on December 10, 2010 at 1:05 PM | PERMALINK

Steve you are missing the reason why liberals are upset. This is how things will unfold. The deal will go through. The repubs will attack Obama for increasing the deficit. When the payroll tax cut expires, repubs will hold hotages telling teh public that they are protecting americans from the evil dems trying to raise taxes on the middle class. The dems will not fight back. The repubs will say that because we do not have the payroll tax revenue anymore that we will have to cut or eliminate Social Security.

Posted by: Live Free or Die on December 10, 2010 at 1:05 PM | PERMALINK

Aside from Paul being essentially correct, let's also point out that this is more about splitting hairs and labeling theory than actual effect. "The President's position" and "flip flopping" are really not the most crucial matters here. The practical effect - whatever the "president's position" is that The Deal will, in actuality, extend all of the Bush tax cuts. It's not all clear that, in two years time, the "President's position" will look any more tenable than it does now; that is, we're no more likely, and in many ways less likely, to get an agreement on extending the still in place Bush tax cuts, except only up to $250,000. The point isn't consistency... it's that the "President's position" never made all that much sense. And yes, he's been consistent... and thanks to his consistency, all of the Bush tax cuts are now going to be extended. Explain, again, how that's a preferable result.

Posted by: nycweboy on December 10, 2010 at 1:07 PM | PERMALINK

In a game of chicken, Obama blinked first. By letting the Republicans actually "scotch" unemployment benefits, middle-class tax breaks, funds for the troops, etc., Obama would have wrong-footed the opposition on the very eve of their accession to majority status in the house.

The Republicans would have been shown up as the toadies of the corporations that they truly are, and their prospects for 2012 would have dimmed considerably. It is likely that they would have caved eventually on extending unemployment benefits anyway - and if the middle class ended up with a tax increase for a couple of years it wouldn't have been the end of the world.

Posted by: zeke on December 10, 2010 at 1:11 PM | PERMALINK

Are you going to believe him or your lying eyes? If this is not a flip flop it does come awfully close. It is like Bush saying he wanted peace with Iraq all along. It really is amazing what contortions individuals take in paying a ransom of hundreds of billions- please note that- the president with willing to affect his "core" beliefs by putting increasing the deficit hole of hundreds of billions- I certainly do not want him negotiating for me. Hundreds of billions. I got to tell you, every is democrat I know is pissed at him. Bad politics, bad economics.

Posted by: Raoul on December 10, 2010 at 1:11 PM | PERMALINK

Meh. And his excuse for not dealing with the Bush tax cut expirations earlier? or with the stimulus plan?
If i had an employee who waited until the last minute on a project that required planning, consultation and consensus and delivered a half-assed report, I'd fire him. Which I suspect will happen to Obama in 2012.
The tax cuts will never expire nor the payroll cuts, SS as we know it will be history.

Posted by: Chester on December 10, 2010 at 1:13 PM | PERMALINK

1. I don't exactly see how Obama deserves to get all or most of the blame for failing to find a way out of a trap that Congressional Dems have had 10 frickin' years to try and deal with.

2. While taxes on the rich (and everybody else) will have to go up at some point to fix our budget problems, a significant tax increase at this time that could push our sputtering economy back into recession might not be the best idea.


Posted by: MBunge on December 10, 2010 at 1:13 PM | PERMALINK

"In a game of chicken, Obama blinked first."

If the people who say stuff like this had ever actually played chicken, we'd wouldn't have to listen to them because they've have died a long time ago because they wouldn't blink first.


Posted by: MBunge on December 10, 2010 at 1:15 PM | PERMALINK

I call BS. I recall people talking of how the Bush tax cuts would be backloaded when they were passed.

That this was overlooked for all these years and comes down, just now, to unemployment, is so all encompassingly stoopit as to be unbelievable.

Posted by: Kill Bill on December 10, 2010 at 1:17 PM | PERMALINK

Mike, I agree with you on economic terms. Although many rich people will invest in high growth economies like China. If I thought Obama would be successful in two years on the tax issue, then I would be with you. But the House will not let the payroll tax go up. This is what they were talking about by starving the beast. Except a dem is doing it for them.

Posted by: Live Free or Die on December 10, 2010 at 1:18 PM | PERMALINK

It's disconcerting that it actually has to be explained to people that when campaigning, a candidate sets out his policy goals in aspirational terms, and that when governing, a candidate is forced to pursue his policy goals within the contraints of multiple veto points. Did that many people sleep through the whole "checks and balances" lesson in high school civics?

Posted by: RS on December 10, 2010 at 1:20 PM | PERMALINK

I can tolerate the compromise. Lest we forget, the deficit is still not the primary concern for America. The economy is. As such, this bad deal is better than no deal. Alternatively, the expiration of all the tax cuts is good for the deficit, but it fails to address the problem at hand.

Posted by: OB on December 10, 2010 at 1:21 PM | PERMALINK

Boy this is sure comforting, Obama apologists!

Using this wisdom, here's how a terrorist scenario would go: Terrorists kidnap 100 citizens and threaten to kill them all unless paid $200 billion. Solution? Sure, give them the $200 billion (since we wouldn't want to lose any lives).

Of course, the terrorists will go away and never bother us again, and we'll all live happily ever after (minus just the $200 billion). Clearly a brilliant strategy. So ashamed I never considered it!

Posted by: nemisten on December 10, 2010 at 1:22 PM | PERMALINK

Some serious sanctimonious bs floating here folks. Answer the question- what your plan B? The R's would've caved? You sure as hell haven't been watching. They want failure. The have the house, they can originate a boatload of shite and tack it onto anything. Get freakin real and brace yourselves for the coming circus. So what was plan B for the 2 mill unemployed and the folks getting the EITC? You don't have one because there isn't one.

Posted by: KK on December 10, 2010 at 1:22 PM | PERMALINK

It's also worth noting that Obama actually oversold the liberal position here. Tax cuts for the rich have at least some stimulative effect. Rich people will use the money to buy some things, which will give a boost to aggregate demand.

The problem is that it's a highly inefficient stimulus because the wealthy have a relatively low marginal propensity to consume.

Posted by: RS on December 10, 2010 at 1:23 PM | PERMALINK

It's awful easy for you shmucks to point fingers and be all up in arms but when you get right down to it there's a whole lot of real people who will be thanking god that Obama's going to get them enough crumbs to exist on a little while longer. It's pretty easy to be a sanctimonious ass when your not struggling to survive day to day. I don't agree with everthing Obama does but I sure give him a lot of credit when comes to helping people in need.

Posted by: Gandalf` on December 10, 2010 at 1:26 PM | PERMALINK

Bah, they wont buy more stuff, they will put into their portfolio at some hedge fund.

Bush said back in 2001 that tax cuts would stave off a recession. Those tax cuts are still in effect today and have been for years. The economy went into a recession anyway. The stimulative effect was effectively nil.

Posted by: Kill Bill on December 10, 2010 at 1:28 PM | PERMALINK

Note the posts by Raoul and Chester as examples of what I spoke about earlier.

Each one is angry about the resolution concerning the upper-end tax rates. Neither really says how it could have been avoided.

Raoul says Obama could have just let everyone's rates go up. That's true, but that isn't what he ran on either, and there are downsides to that outcome too.

Chester says he should have demanded a vote earlier on. What makes anyone think he ever had 60 votes? Reporting has repeatedly said that liberal Dem senators (Boxer, Feingold, Reid, Murray) didn't want a pre-election vote. Beyond that, can you find 60 votes on this issue? Who would those 60 votes be?

Magical thinking isn't just for conservativesany more. When it comes to those upper-end tax rates, Barack Obama, AKA "Daddy," should magically produce the outcome we want.

Posted by: bob somerby on December 10, 2010 at 1:29 PM | PERMALINK

What liberal economists are those? Orzag supported the stimulating short term effects of the deal but admitted that he couldn't speak to the long term with its "political" complications. It's a bad deal long term but, just like CEO's, political people don't face the long term.

Posted by: JackD on December 10, 2010 at 1:32 PM | PERMALINK

Agreed, I don't think Obama is flipping; I think he's trying to play both sides at the same time.

He accused the Republicans of hostage-taking and then turns around and employs the same tactic against congressional Dems.

It certainly doesn't help that his economic advisory team is populated by the same crowd behind this mess. I have no idea what his intentions are, except to ensure he's not perceived as antagonistic by the right.

Posted by: Monty on December 10, 2010 at 1:33 PM | PERMALINK

Excellent Bob, excellent! Conspiracy theories abound as BO is both a Corporatist and a Socialist. Or is he just plain old Daddy?

Posted by: KK on December 10, 2010 at 1:34 PM | PERMALINK

Helping people in need? Do people realize, especially these politicians, that:
Most loan and other aid [TAF] for U.S. institutions over time went to Citigroup ($2.2 trillion), followed by Merrill Lynch ($2.1 trillion), Morgan Stanley ($2 trillion), Bear Stearns ($960 billion), Bank of America ($887 billion), Goldman Sachs ($615 billion), JPMorgan Chase ($178 billion) and Wells Fargo ($154 billion).

Thats over 6 trillion in loans and aid completely ignored by the congressional cercopes.

Posted by: Kill Bill on December 10, 2010 at 1:35 PM | PERMALINK


I do believe that the Repbublicans would have caved on unemployment benefits. They are still somewhat accountable to their constituents, more and more of whom are swelling the ranks of the jobless.

Would the expiration of the Bush tax cuts push us into another recession, as Cassandra Summers predicts? The opinions of the experts vary, and I'm no expert in the dismal sciences. But I can't help but think that those who are still employed could survive a return to the tax rates they "endured" during the Clinton administration.

Posted by: zeke on December 10, 2010 at 1:36 PM | PERMALINK

$300 Billion in (unpaid) stimulus that NO ONE thought was on the horizon.

Million and a half new jobs as the economy continues to wobble.

Driving a wedge between GOP leaders and the tea party overlords regarding the deficit before Boehner even moves into the speaker's office.

Extending this conversation about tax rates for the wealthy, right into the 2012 election season.

Coming out against ways of Washington and for the American people.

I really, really am struggling to see the downside to this deal -- other than the ways in which it exposes the parochialism and dimness of an awful lot of people. Tax policy is not an end; it's a means to an end. In this case, given choices of spurring job creation, stabilizing middle class tax rates and sticking it to high earners, the President opted for numbers one and two, deferring number three until later. What is the problem with this?

Last week, Obama was in a corner. Today, he's on the verge of getting more overall stimulus than he got in 2009. And it just doesn't seem like many people are aware of that...

Posted by: Mark on December 10, 2010 at 1:36 PM | PERMALINK

Obama didn't just give them the tax cut extension for the wealthy. He also agreed to their position on the estate tax: zero tax for the first $5 million, $10 million for a married couple, and a very low tax rate after that.

Posted by: Joe Buck on December 10, 2010 at 1:37 PM | PERMALINK

Live Free or Die,

You are absolutely right. The right will win, but only if we don't stand proud and shout the truth outloud. As long as we cower in the shawdows letting the Right Wing Noise Machine be the only voice, we will lose. Right now we have a chance to brand Republicans for a generation.

Get out there and act up. Write your newspaper. Attend townhalls. Tell truth to power.

Posted by: Ron Byers on December 10, 2010 at 1:38 PM | PERMALINK

Bob Somerby (the Bob Somerby?): I never agreed with Obama's original position either- but this deal, to put in perspective, adds 450 billion a year for two years- who knows whether the rates will hold- the Obama "promise" added $300 bill a year. Apart from continuation of the tax cut on the rich - it creates a mechanism to undermine Social Security and creates the lowest estate tax in along time not counting the accounting gimmmick of this year. These two issues are principled GOP positions- I am happy they stick to their beliefs. As to economics of the issue-well color me skeptical.

Posted by: Raoul on December 10, 2010 at 1:41 PM | PERMALINK

"I do believe that the Repbublicans would have caved on unemployment benefits."



Posted by: MBunge on December 10, 2010 at 1:42 PM | PERMALINK

Believe away against all evidence. They are nuts. They won't cave and unfortunately they will have ample time to prove their incompetence and insincerity. Meanwhile a few million more jobs will appear, 2 mill won't be tossed off the rolls and we'll have a fighting chance for a recovery.
Also, keep in mind every time the R's have tried to kill SS or medicare they get their weenies whacked in the following election. If they are set up to try that crap again I fully expect the results to be the same. The Pres is far from an idiot.

Posted by: KK on December 10, 2010 at 1:46 PM | PERMALINK


"I do believe that the Repbublicans would have caved on unemployment benefits. They are still somewhat accountable to their constituents, more and more of whom are swelling the ranks of the jobless."

Do we really think that more and more people are swelling the ranks of the jobless? The data I'm looking at says that new hiring continues to expand, although not as fast as needed. The overall rate is not dropping having more to do with how we measure unemployment rather than actual numbers of newly jobless.

Posted by: Mark on December 10, 2010 at 1:47 PM | PERMALINK

But the House will not let the payroll tax go up. This is what they were talking about by starving the beast. Except a dem is doing it for them.

Um, the payroll tax expires in 12 months. A GOP lead House bill to extend the tax cut must make it past the Senate and the President's desk. Unless it is tied to something that Democrats want very, very badly my bet is that the extension dies in the Senate or is vetoed by the President. Do you really think that the President has thought about this?

Posted by: AK Liberal on December 10, 2010 at 1:54 PM | PERMALINK

I'm sure this has been brought up somewhere but I haven't seen it. We do all realize that the Democrats in Congress could have neutralized this whole thing by trying to pass a permanent tax increase on those making over $250,000 a year? There was no need to wait for the Bush tax cuts to expire.


Posted by: MBunge on December 10, 2010 at 1:54 PM | PERMALINK

Do you really think that the President has thought about this?

Make that, "Do you really think that the President has not thought about this?"

Posted by: AK Liberal on December 10, 2010 at 2:02 PM | PERMALINK

Any of you making comments unemployed? I think you are living a fairytale if you think republicans give a crap about the unemployed. They won't cave on this because THEY DON"T CARE, and they aren't going to start. I am soon to be one of these unemployed. I hope I won't need these extended benefits but who knows. I also have a kid in college and two more at home so any and all tax benefits I can get right now are extremely important to me. I don't LIKE the compromise but I don't see any alternative that would pass now and next month there will be no chance.

Posted by: Dave on December 10, 2010 at 2:04 PM | PERMALINK

A. I do think that the GOP would have caved on the unemployment extension if push came to shove.

B. Even if they didn't, the cure is worse than the disease. My understanding is that the unemployment extension would have cost in the range of $50-60B. While this isn't peanuts, if Democrats don't blow the economy up further by extending all the Bush tax cuts, they could afford to SPEND MONEY that would grow the economy and allow the states to make up the difference. This "deal" may appear to be necessary for the people currently on the unemployment rolls, the "deal" is also likely to ensure that they stay there and are joined by millions more Americans.

If I am forced into an undesirable choice between fixing the entire economy but being harder on the unemployed in the short term and screwing up the economy but softening the initial blow, I'll choose the former.

C. If the GOP didn't cave, and people were really tossed off the unemployment rolls, finally the GOP would have been held accountable for their policies and, in 2 years (if not sooner), we could have fixed the problem.

Posted by: square1 on December 10, 2010 at 2:09 PM | PERMALINK

extending that tax break for another 2 years is as good as making them permanent

Why is this true? It isn't. Obama can make letting the top cuts expire a centerpiece of his 2012 campaign. A majority of Americans supports letting them expire. Is that going to change in two years? Unlikely. Even moderate repubs support letting the rates go up. How many of those will vote for Obama, and how many will vote for a DeMint-backed whore for the rich?

The repubs wanted to make the cuts permanent. They Didn't Get That. Now they will have to fight a very embarrassing fight all over again, during a general election. This is the weapon the Dems need. Why waste it during a lame duck session after losing a mid-term? Use it in 2012.

In fact, Obama should run on raising the top rate to 50%. We can either recover some lost revenue, or compromise back to 40% in 2012 if the repubs still hold one chamber.

If it is true that taxes can never be raised after they've been cut, we're doomed anyway. Break the meme.

Posted by: Tim H on December 10, 2010 at 2:11 PM | PERMALINK

Surely, surely, surely someone as sharp as Obama could have seen this coming, irrespective of the state of the economy. It's not as if the Republicans were covering up the fact that they'd throw every spanner they had into the works.

He looks lame.

Posted by: Squeaky McCrinkle on December 10, 2010 at 2:12 PM | PERMALINK

Obama showed zero leadership on this before the election, which is par for the course from him. Maybe if he had given a damn, Congress would have been forced to act. The progressives did want to act. The Blue Dogs shut them down. I was angry with the leadership at the time for backing down. They should have forced a vote. But Obama was cowering up at the White House, saying nothing.

Posted by: Steve on December 10, 2010 at 2:12 PM | PERMALINK

Well, Dave, while I am sympathetic to the unemployed, I am also sympathetic to people who have jobs and want to keep them. You see, this "deal" has real -- real large and real bad -- economic effects. By pumping more money out of the economy, there will be more layoffs, more salary cuts, and slower economic growth.

Posted by: square1 on December 10, 2010 at 2:13 PM | PERMALINK

Obama can make letting the top cuts expire a centerpiece of his 2012 campaign

LOL! You mean like he did in 2008? And what is going to happen in 2012, 2013, and 2014? Do you think that there won't be other issues that are so "important" that Obama won't be willing to deal the tax cuts in exchange for passing "something"?

Please. People are sick of Obama's empty promises. The GOP holds the economy hostage and Obama folds. Every time. If Obama. wanted people to vote for him in 2012, he could have fought the tax increase NOW. Then he would have had a record of fighting. Instead he will have a record of broken promises, capitulation, and weakness.

Posted by: square1 on December 10, 2010 at 2:19 PM | PERMALINK

Ok, it's not a flip-flop. It's a "fold." A "choke." It's a ridiculous giveaway to the rich, in return for thirteen whole months of unemployment benefits. And in the Bold New Spirit of Bipartisanship, the GOP promptly cock-blocks aid for 9/11 first responders, the DREAM Act, and DADT repeal.

But hey, it's not a flip-flop. We certainly wouldn't want that.

Posted by: Cazart on December 10, 2010 at 2:20 PM | PERMALINK

I do believe that the Repbublicans would have caved on unemployment benefits.

Steve's post from earlier today offers an excellent explanation for why that probably would not have happened. It underscores Ted Frier's blogpost that that Steve linked to in yesterday's Mini Report.

Posted by: AK Liberal on December 10, 2010 at 2:24 PM | PERMALINK

Do you have any grasp of economics? This adds money to the economy. It increases demand. Increased demand leads to increased production and EMPLOYMENT!
60 votes folks, sell your ponies elsewhere.

Posted by: KK on December 10, 2010 at 2:37 PM | PERMALINK

You know, I've seen a lot of apologist B.S. from Steve over the last couple of years but this really takes the cake!

Obama COULD have fought the Republicans on the tax cuts and WON. How long would they be able to defend their position if he came out and said that he would sign a tax bill that didn't cost $700 billion for millionaires?

And left it to the Republicans to explain to the American people why they oppose a tax cut for 98% of the population unless the richest 2% get one?

That's a dead losing position. And Republicans could have been crucified month after month until they both pass the tax cuts, AND make them retroactive.

It would have been a SLAM DUNK political AND fiscal win -- since it would have saved hundreds of billions in tax dollars we can't afford to spend!

Posted by: Cugel on December 10, 2010 at 2:46 PM | PERMALINK

One of these suitcases holds the following:

a) 900 billion dollars of new debt to China

b) Covert way of eventually defunding and ending Social Security

c) Awesome gift bags of billions of dollars for our billionaire patriots

d) Limited-time benefits for people who have been too lazy to go out and get a job, the bums just need to move to Indonesia, we'll put their whole families to work there

e) Guaranteed promise that all of this and MUCH MUCH MORE will come your way again in 2 years or less!

So what will it be? DEAL ... or NO DEAL?

Posted by: GringoNoraca on December 10, 2010 at 2:47 PM | PERMALINK

KK, there is already one party for trickle-down economics. It's called the Republican Party. There is no need to insult people. Just vote for your Republican buddies and be happy.

Posted by: square1 on December 10, 2010 at 2:50 PM | PERMALINK

Do you have any grasp of economics? This adds money to the economy. It increases demand. Increased demand leads to increased production and EMPLOYMENT!
60 votes folks, sell your ponies elsewhere.
Posted by: KK"

It's obvious YOU have no grasp of economics! This "stimulative effect" will be essentially nil. Tax cuts produce ZERO jobs because employers don't base hiring decisions on whether they got a tax cut or not.

The rest is so minor it will hardly register. Just wait and see in 6 months if there's any economic movement.

And Republicans will come back in January demanding FURTHER cuts to federal spending to "offset" the modest stimulus!

And they'll threaten to shut the government down unless Obama caves AGAIN! (And he's just proved that he will ALWAYS capitulate).

"Oooh! Those bullies are too tough for me, I'd better give them what they want!"

Posted by: Cugel on December 10, 2010 at 2:52 PM | PERMALINK

Ok, I agree: it's the best deal Obama could have gotten under really lousy circumstances (no tax cut for the rich would have meant no tax cut extension for everybody else and no unemployment benefit extension for those who desperately need it). It was this or nothing. We just have to live with it.

BUT: We don't have to be happy about it, and we sure as shit don't have to leave it at that. There are reasons why the aforesaid rotten circumstances came about and, with all due respect, Steve, it wasn't Nancy Pelosi's fault.

The fish rots from the head, and this one started rotting a long time ago.

If back in June Obama wanted a vote on extending the tax cuts to working families only, plus extending unemployment benefits, he should have used the energy he now uses denouncing wavering liberals to denounce and embarrass wavering Blue Dogs. Where was his anger then?

We have known forever that the Republicans would try to extend their masters' tax cuts. Why didn't Obama start holding rallies back in June at the universities and union halls(friendly venues)in the home states of his opponents and DEMAND that Congress pass what he wanted? Why wasn't this made into the signal issue of the whole friggin' campaign? As President he could have done that. He owns the friggin' mike, for G-d's sake!

Yes, the Republicans would have threatened to filibuster. Good, he should have dared them to. And if his tax reform bill failed in the Senate, there would have been time until the election to unite the party and the country on his side and show the Gop what a shit-storm it was about to face. How hard is it for Democrats to run for office defending a tax cut to the overwhelming majority of their constituents? If I can figure that out, why couldn't Obama? He's a lot smarter than I am.

The Republicans handed Obama a hammer and dared him to hit them with it. He took the hammer, but instead of hitting them, he said, "Just to show how bipartisan I am, I'm gonna hit myself first."

And that was that.

There is a lesson in this, perhaps even an opportunity. The Right ALWAYS over-reaches. They did it when Gingrich shut down the government and when they voted to impeach Clinton. The difference is that Clinton was agile enough (and I'm no fan of Clinton) to take advantage of it. This tax bill is a huge right-wing over-reach, but Obama was too timid and incompetent to take advantage of it.

So we have to, too late though it may be for this issue. And we have to start by raising bloody hell to our Democratic reps and senators, demanding that they do what Obama won't: Be a friggin' Democrat for a change!

We will probably loose this one, but we will have at least started the process of taking back our party from the mealy-mouths and going back to fundamental Democratic principles: tax fairness, help for the unemployed, decent wages and working conditions for those who are employed.

We have to tell this president loud and clear: Mr. President, if you don't believe in those things at the very least, and aren't willing to fight for them, then whatever else you are, you're not a Democrat. So stop calling yourself one and go be something else. We'll carry on by ourselves.

Posted by: Chaim Rosemarin on December 10, 2010 at 3:02 PM | PERMALINK

Let's be clear about flip-flopping, and even more clear about Obama's flip-flopping.

The repugs didn't flip-flop about their stance on retaining the Bush era tax rates, and they delivered. Obama says he didn't change his stance on retaining the Bush era tax rates, and on the face of it, there is no reason to argue that is not the case since Reid and Pelosi had the final call on when to legislate their demise.

But Obama's behavior, potential or actual, about ending the Bush era tax rates is all that needs to be examined to make an assessment about it.

First, he demurred to Reid's and Pelosi's judgement about when to introduce the legislation to end them. In doing so, he either was overconfident and complacent about ending the tax cuts, or he was unwilling to fight Reid and Pelosi about getting them up for a vote sooner, or he was unwilling to engage in a fight with the repugs that was coming his way. Any one of those three alternative explanations indicate and imply leadership behavior that is substantively worse than flip-flopping.

More cynically, he may have decided that the looming mid term election disaster would mean there was no reason to pursue the demise of the Bush era tax cuts. He would let Reid and Pelosi waffle on them rather than press them to vote before the election or to make them a unifying rallying campaign issue. Instead of ending them, the Bush era tax cuts would be a bargaining chip that he could use after the election to make himself appear more bi-partisan. And this scenario, if true, because of Obama's subverting the processes by which he could have eliminated the Bush era tax cuts, is flip-flopping. In fact, it's much worse.

Posted by: gone_west on December 10, 2010 at 3:11 PM | PERMALINK

Because congressional Democrats balked at voting before the midterms; the party lost its leverage; the president got stuck in a box with limited options;

I REALLY don't understand why the Dems didn't want to vote on this before the midterms and make this a winning issue for them. Unless of course they really weren't that interested in expiring the millionaire tax cut either.

Posted by: ckelly on December 10, 2010 at 3:11 PM | PERMALINK

I'm wondering what planet some of you guys live on? Do you understand how the Senate not-works? How senators representing less than 20% of the population can stick it to the rest of us? That the President can't make Congress do anything? What a Blue-Dog Democrat is?

Sure, I don't like the situation. But I've played enough poker to know that risking a large bet (the unemployment benefits) on the assumption that the other guy is bluffing is a very tricky call. What do you lose if he DOESN'T fold? Of course, after you see the cards (and if you fold you won't get to do that) it's easy to make the call. And even easier for smarts-a$$es on the sideline (like you watching poker on TV where you can see the hole-cards but the players can't) to criticize. A million plus (plus families) unemployed who can't make their mortgage payments not only suffer for themselves --- they drag down the whole economy, including you and me.

Just consider this: weakening Obama and the economy over the next two years increases the chance that a Republican will be the next President. And the President has access to the nuclear attack codes. Do a little cost-benefit, gain-risk thinking about that and consider who that Republican might be. And how your bitching and tantrums might help him (her????).

BTW, how many of you who are complaining and scapegoating, calling the rest of us apologists (why not say appeasers like Newt?) voted in this last election? And how many are now unemployed or about to be?

I'll give full credence to someone who can truthfully say: "I'll give up my unemployment checks as long as Rupert Murdoch's marginal tax rate goes up 4%". Like the guy in the Geico commercial says "Lot's of luck with that!"

Posted by: jrosen on December 10, 2010 at 3:30 PM | PERMALINK

gone_west, please. Your entire essay is based on the painfully false notion that Obama has the authority to make Congress do the work he wants. Try to remember that he's not a legislator anymore, he's the executive now.

Obama did everything he could to get Congressional Democrats to vote on his tax policy, and he even got both Pelosi and Reid on board. All three of them tried to get a vote done before the election, but the caucus as a whole refused.

So stop pretending that Obama had the authority to push a vote, and particularly stop re-writing history. Out here in reality, the tax mess is not Obama's fault in any way.

Posted by: Shade Tail on December 10, 2010 at 3:30 PM | PERMALINK

Liberals outraged Obama reneges on promise to end tax cuts for rich, demand Obama renege on promise to extend tax cuts for middle class.

Posted by: RS on December 10, 2010 at 3:36 PM | PERMALINK

Cugel: It's obvious YOU have no grasp of economics! This "stimulative effect" will be essentially nil. Tax cuts produce ZERO jobs because employers don't base hiring decisions on whether they got a tax cut or not.

Mark Zandi, a real economist with Moody's Analytics begs to differ. This via NY Times Economix blog:

"Real GDP growth in 2011 will be nearly 4 percent, approximately one percentage point greater than previously anticipated. Job growth will be more than twice as strong, with payrolls growing by 2.6 million. Unemployment will be more than a percentage point lower; instead of hovering near 10 percent through the year, it will end 2011 well below 9 percent."

The whole blog post is worth a read, including the link to the previous days post which shows the multipliers for various aspects of the tax cut deal. All of which is provided courtesy of the progressives at the Center For American Progress.

Of course you are right that employers don't base hiring decisions on whether or not they receive a tax cut. They make them based on projected demand and that should go up if the vast majority of Americans have a little more jingle in their jeans rather than less as will certainly occur when the Bush tax cuts expire and unemployment benefits end. You might want to read up on what you're talking about before you blast people for economic illiteracy.

Posted by: AK Liberal on December 10, 2010 at 3:42 PM | PERMALINK

Here's what's frustrating me. Okay, here's one of the things that's frustrating me.

A lot of people here and elsewhere keep saying that their anger is justified because they "believe" the Republicans would have backed down on unemployment. And I just find myself at a loss to understand how believing a hypothetical state of facts into existence because it's necessary to justify our outrage makes us any different from Fox-besotted teabaggers or the Christian Taliban (or the real Taliban, for that matter).

If your anger is based upon a belief about an unprovable hypothetical state of affairs, then it ought to be tinged with at least a modicum of conditionality, at least an implicit recognition that to a rational person, a position based on a "belief" necessarily implies the possibility that he or she could be wrong. And if so, there ought to be at least some element of doubt mitigating the rage.

And I don't see that. What I see are people who want to be angry and whose minds are working backwards to generate whatever facts are necessary to support the anger.

Yeah, on one hand "Republicans have always ultimately 'caved' on UI extenders."

On the other, Republicans didn't used to even carp about this because they used share at least a little sense of obligation to the commonweal. And, of the course of the last year, they ran a series of progressively more radical experiments in UI opposition in the Senate and, in each case, PAID NO PRICE. First Bunning did it with GOP leadership tut tutting, and they saw that neither Bunning nor the GOP paid a price. So next, the whole GOP got on board with letting extensions lapse and, once again, saw that they paid no price. Next, their candidates and incumbents ran on increasingly explicit and vile "blame the victim" rhetoric on unemployment and, far from paying a price, were richly rewarded. And now, here we are, next election two years away, a public and a press that's amply demonstrated that it has the memory of a flatworm, such that they never get the blame.

That's the other side of the "belief" that they wouldn't dare do it. Is there not even room to concede that reasonable minds could differ about whether the GOP would cave? And, if so, doesn't that mean that the level of anger is kind of over the top relative to the situation as it was?

Posted by: Another Steve on December 10, 2010 at 3:45 PM | PERMALINK

Steve is right to note the consistency of Obama's stated positions on the tax issue, and the fumbling of Congress which should indeed have brought forth the tax bill months ago. However, the current agreement is dangerous because even the petty "concession" of "only" two more years of high-end cuts will likely be extended, the payroll tax holiday endangers Social Security and will likely get extended, and so on. IOW, we have to "dynamically score" the agreement. It can't be taken even at face value, crappy as it already is!

Furthermore, it was not necessary to come up with a bill that Republicans could pass per their stated agreement in negotiations. That's the wrong way to do it in principle. Instead, the Democrats should have rolled out their preferred bill in say early October, to extend low bracket rates for two years (we can't extend even them indefinitely, the deficit you know ...), not the high rate (maybe to 1M with due regard for "LeBron James' dentist"), also raised the cap gains rates and I'd love a pony like fin-tran tax ... Then you hold the vote and just say: "OK, vote for this or all rates go up in 2011. Does anyone want to own that?" I bet the Repubs would eventually chicken out, and if they didn't they'd have allowed the consequence and we'd get some extra revenue anyway.

Steve: what you and many others don't get is, the whole idea of compromising to write a bill is wrong in this case, because of the existing upheaval built into the previous measure. It's not like the case where doing nothing/failure to pass actually causes "nothing" to happen later. Instead, you put out what you want and say "take this, or else something bigger will happen anyway."

BTW, as useful antidote to the notion that Obama hasn't gotten much done, please visit, bookmark, and promulgate the useful (even if needlessly titled) whatthefuckhasobamadonesofar.com

Posted by: Neil B on December 10, 2010 at 3:46 PM | PERMALINK

Steve Benen battles the straw man! Who ever called this a flip-flop? It's just the usual capitulation. Obama always talks the same good game while giving in.

Posted by: calling all toasters on December 10, 2010 at 4:07 PM | PERMALINK

I see Cazart beat me to it, and with more snark.

Posted by: calling all toasters on December 10, 2010 at 4:14 PM | PERMALINK

...do gwb's economic policies still offend obama's conscience?


Posted by: john on December 10, 2010 at 4:24 PM | PERMALINK

As PO'd as everyone is about Obama going ahead with the tax cut extension for the rich, I wonder if we're making too big of a deal about this. Obama doesn't appear to be happy with that aspect of the plan but he got the unemployment benefit extension, got to keep the cuts for the middle class, and a couple of other things. So, he's happy about some aspect, not happy about others. Isn't that pretty much the definition of compromise? There's been a big pile on Obama about this but I wonder if it's been so long since we've seen an actual cross party legislative compromise that we've forgotten what they look like.

Posted by: chris on December 10, 2010 at 4:29 PM | PERMALINK

Say what you will but "flip-flop" is exactly what is being perceived. Obama looks like he is just trying to 'get by" with whatever he can get. That's not why I voted for him. Any "package" agreed to should have benefit to our present situation. The Republican Tax Demand has none. It greatly adds to our deficit and is, in the long run, more of the same trapping maneuver from them. We , apparently, don't have a President that can lead. I'm disappointed and so is Senator Sanders of Vermont. He, today is making the case that Obama has failed/can't/won't do.
He needs a few more elbows to knock some sense into him.

Posted by: fillphil on December 10, 2010 at 4:35 PM | PERMALINK

Being blackmailed into a deal where the key point is detrimental to our nation and our economy is the point. Obama is willing to do almost anything to keep people from suffering anymore than necessary but hey...IF NOT NOW...WHEN?

This issue is turning our democracy into a plutocracy. From 90% down to 28% and their greed is still not satisfied. Will repubs next demand Obama resign his office before they will extend unemployment benefits in the future and he will agree to keep people from suffering???

"But it's their money...they earned it"...bullshit. It's comparable to being the only VW on an 8 lane freeway and looking behind you is a wall of 18 wheelers the line miles long
all belonging to one man and he is paying less in taxes for road maintenance than you in the single VW. Dynasties destroy democracies.

If not now ...WHEN? The will of the American people says no...No...NO to the Bush tax cuts for the wealthy. Don't be part of this republican plan to destroy the middle class.

They blocked $250 to SS beneficiaries in place of no COLA for 2nd yr in a row; NO to health care for 9/11 emergency workers; No to unemployment extensions; No to DADT; START then blackmail the congress into agreeing to tax cuts for billionaires. It stops now. If not now...when

Posted by: bjobotts on December 10, 2010 at 5:26 PM | PERMALINK

AK Lib Thanks for posting Zandi.

Posted by: KK on December 10, 2010 at 6:42 PM | PERMALINK

"The will of the American people says no..." bjobotts @ 5:26 PM.

I sort of thought that's exactly what they said about getting off their duffs and voting last November 2nd...
As for your question: "If not now, when?" - I guess we'll just have to wait for another nation-encompassing disaster; war, economic, or natural, to smack enough citizens upside their heads and drive home the simple fact that "WE, the people", ARE the government and our participation mustn't be limited to just voting.
When we feel like it...

Posted by: Doug on December 10, 2010 at 8:56 PM | PERMALINK

Another Steve,

You write "If your anger is based upon a belief about an unprovable hypothetical state of affairs, then it ought to be tinged with at least a modicum of conditionality, at least an implicit recognition that to a rational person, a position based on a "belief" necessarily implies the possibility that he or she could be wrong. And if so, there ought to be at least some element of doubt mitigating the rage."

Your concern about our anger is ironic, considering that in the paragraph preceding this one you liken those with whom you disagree to the Taliban or, even worse, Fox News. My "belief" that Republicans would eventually cave on extending unemployment benefits is not based on blind faith or rigid ideology, but on past performance and the fact that 100% of Republican house members and roughly 1/3 of Republican Senators will have to face the voters in two years.

Could I be wrong? Sure. Did I ever hold myself up as an infallible predictor of events? No. Is your rant and its invidious comparisons justified? I don't "believe" that it is.

Posted by: zeke on December 10, 2010 at 9:15 PM | PERMALINK

blinked..bullsh**. the problem with this deal has nothing to do with the showdown. it has to do with obama playing the game by ante-ing with chips he should never have in the first place.

Posted by: marydem on December 10, 2010 at 10:15 PM | PERMALINK

So why strike the deal? Because congressional Democrats balked at voting before the midterms; the party lost its leverage;

Steve--I agree with you that the Democrats should have taken the vote before the midterms. However, I remain unconvinced that the Senate Republicans would not have filibustered it like they did after the midterms. Mark Kirk just isn't that influential.

Posted by: blank on December 10, 2010 at 10:41 PM | PERMALINK

Shade Tail: Re-writing history? Well, excuse me, but the NY Times reported that Obama deferred to Reid, didn't push him, and signalled in budget discussions he could live with extending the tax cuts for the wealthy. As a result, anyone trying to make the case that Obama didn't flip-flop on this issue is not credible. He was always willing to use it as a bargaining chip. For him, the extension of tax rates for the wealthy is just a way to get what he needs to improve his re-election chances. All, of course, done in the name of the American people.

"And a vicious circle took hold, according to interviews over past months with Democrats in the administration and Congress: Mr. Obama largely deferred to Democratic leaders — the Senate majority leader, Harry Reid of Nevada, was among those in tough re-election races — while Democrats looked to the president to take the lead and make the case against extending the tax cuts for high incomes.

Mr. Obama’s budget early this year called for permanently extending the tax cuts except on high incomes, but administration officials signaled to Democrats that he could support a short-term extension of one or two years."

Posted by: gone_west on December 11, 2010 at 2:32 AM | PERMALINK
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