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Tilting at Windmills

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December 17, 2010

TAX DEAL IS A DONE DEAL.... It seems hard to believe, but the tax policy agreement reached by the White House and congressional Republicans was unveiled just last week. Given the initial response, it was hard to imagine this week's House and Senate votes would turn out to be so one-sided.

Indeed, over the course of about 10 days, the tax deal made the transition from a crash-and-burn failure drawing the ire of both left and right to legislative success with bipartisan support. Very few, if any, efforts in the last two years have passed by such wide margins, and reversed their political fortunes so quickly.

On Wednesday, the Senate approved the deal after an 81-to-19 vote. Last night, hours after a procedural setback, the House followed suit.

Congress at midnight Thursday approved an $801 billion package of tax cuts and $57 billion for extended unemployment insurance. The vote sealed the first major deal between President Obama and Congressional Republicans as Democrats put aside their objections and bowed to the realignment of power brought about by their crushing election losses.

The bipartisan support for the tax deal also underscored the urgency felt by the administration and by lawmakers in both parties to prop up the still-struggling economy and to prevent an across-the-board tax increase that was set to occur if the rates enacted under President George W. Bush had expired, as scheduled, at the end of the month.

The House bill is identical to the Senate measure, so there will be no additional wrangling. The agreement now heads to the White House, and President Obama is expected to sign it into law today.

Here's the final roll call in the House, which voted 277 to 148. A majority of Democrats in the chamber ended up supporting the deal (139 to 112), and a majority of Republicans did the same (138 to 36). Off the top of the head, I don't think any other major legislation in this Congress received this kind of bipartisan support.

The dust hasn't quite settled on this one, but it's not too early to wonder how, exactly, the deal ended up passing after an angry initial response. I'd argue the turning point came during a Senate Democratic caucus meeting last week in which White House budget director Jacob Lew and senior Treasury adviser Gene Sperling offered a compelling presentation.

Vice President Biden had spoken to the same conference the day before, and didn't persuade members at all. A day later, Lew and Sperling pointed almost exclusively to economic projections, and went with a much softer sell -- answering questions rather than giving instructions. It proved quite effective. After the meeting, much of the opposition among Senate Dems withered, and House Dems began to realize they didn't have the backup they'd need for a prolonged fight.

Also note that the right, which tends to be unified on these issues, struggled to settle on a specific tack. Some groups and leading personalities balked, but their opposition seemed half-hearted, and was generally drowned out by criticism of the deal from the left. Rank-and-file Republicans, then, never really felt pressure from their base, at least not enough to sway the outcome in any meaningful way.

The result is a win for the White House, which still hopes to pick up a few more victories before the lame-duck session concludes.

Steve Benen 8:00 AM Permalink | Trackbacks | Comments (31)

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Comments

I guess if these folks REALLY want to pass something, it can be done... but only if it screws over America and massively benefits the rich/corporations...

The best government money can buy!

Posted by: r_m on December 17, 2010 at 8:04 AM | PERMALINK

The White House wins. The republicans win. Why do I feel like I just had a prostate exam.

Posted by: ComradeAnon on December 17, 2010 at 8:05 AM | PERMALINK

Yes, compromise at work. Great news for those who will have their unemployment benefits extended. Terrible news for those on Social Security whose benefits will be cut in the future. This was The Trojan Horse to kill Social Security. Just wait for the needed reversion to regular deductions and the RepuGs will cry out "No Tax Increase", and, then, cut benefits ala Simpson of Wyoming.

The Gutting of Hope and Change has begun.

Posted by: berttheclock on December 17, 2010 at 8:07 AM | PERMALINK

Amazing what can be accomplished when tax cuts for the rich are on the line.

Posted by: Phil in Denver on December 17, 2010 at 8:07 AM | PERMALINK

Here's your shit sandwich peons. Us millionaires sure are happy . Diamond encrusted Cartier Watches for us all . Enjoy your $1200 per month unemployment...don't spend it all in one place .

Posted by: John R on December 17, 2010 at 8:12 AM | PERMALINK

From the AP wire service (May 17, 2011): The Republican lead House of Representatives has approved the transfer of $120 Billion from General Funds to the Social Security Trust Fund. This transfer of funds is part of the agreement reached last December between President Obama and the Republican Leadership to extend the tax cuts of President Bush from 2001 and 2003. Congressman Paul Ryan of Wisconsin, Chairman of the House Finance and Budget Committee, explained that he agreed to this unprecedented action because it provides further proof to the American public that Social Security is a part of the welfare state that is destroying the opportunity society in our country.

From the AP wire service (December 2, 2011): Republican refuse to extend Unemployment Benefits. President Obama says that Republican Leadership is holding unemployed Americans ‘hostage’ again.

From the AP wire service (December 14, 2011): President Obama reaches agreement with Republican Leadership on extending Unemployment Benefits. As new jobless figures show unemployment above 10%, the White House announces that it has reached agreement with Republican Leadership on a tax package that will extend unemployment benefits. Also, as part of this tax package, additional corporate tax breaks and a lowering of the top marginal tax rate by 3%. The Obama White House declares this tax package to be a big win for the American workers as he as obtained another Social Security ‘tax holiday’, with all employee contributions being suspended for the next year. The White House spokesman declared that this tax package will insure the growth of our economy and put Americans ‘back to work’.

From the AP wire service (April 13, 2012): Congressman Paul Ryan (R-Wi) introduces legislation to balance the federal budget. Congressman Ryan, in introducing this legislation, declares that “Dramatic action is required to balance the federal budget and to reduce the overwhelming debt of the U.S., which is destroying our country.” The legislation calls upon Americans to recognize that “Social Security is one of the many entitlement programs that are destroying the credit worthiness of our country and it must be reined in.” The legislation calls for an immediate 20% cut in social security benefits and an immediate raising of the retirement age to 72. Further cuts of 10% a year would follow in each of the next three years.

Posted by: SadOldVet on December 17, 2010 at 8:14 AM | PERMALINK

Social Security benefits will only be cut if the public gives up on the issue. The payroll tax holiday is temporary and it will take specific legislation to extend it. If Republicans argue in favor of extending the holiday, then turn around and try to use it to justify Social Security cuts, then it really will be our fault if we let them get away with it.

What will really determine whether this bargain will be worthwhile is whether, having got it behind them, Congress (particularly the Senate) can use the last week or two of its session to pass a budget, repeal DADT and/or approve New START.

And of course, whether the economic stimulus effect of the unemployment benefits and payroll tax holiday are enough to prevent a double-dip recession and tide the economy over until it starts adding significant jobs without further congressional action.

Posted by: tanstaafl on December 17, 2010 at 8:17 AM | PERMALINK

If Obama had the brains of a goldfish, he would leave the tax bill sitting on his desk and (quietly) threaten to veto it unless new START and a DADT repeal are passed.

But he won't. So we will end the Congressional session with a bad economic deal that's going to lead to a longer recession and more austerity for non-millionaires, but nothing else.

Bernie Sanders in 2012!

Posted by: SteveT on December 17, 2010 at 8:18 AM | PERMALINK

Even if a majority of democrats had voted against it, it would have passed. It only needed 80 democratic votes. Which, if the democrats could get their messaging together, would be a great thing. This is the Boehner tax-cuts-for-the-rich package, and his caucus made it pass.

Posted by: paul on December 17, 2010 at 8:21 AM | PERMALINK

tanstaafl "then it really will be our fault if we let them get away with it."

You pretty funny guy. Republicans get away with anything under the watchful eye of the current collection of spineless doofuses? Could never happen.

Posted by: John R on December 17, 2010 at 8:24 AM | PERMALINK

@Stevie T. You are the one with the brain of a sack of corn. After going on national tv and saying the Republicans are holding the middle class tax cuts hostage until the rich get theirs, your moronic suggestion is to then hold the middle class tax cuts hostage until the other bills are signed. Genius. Maybe you don't get it yet, the Republicans can lie their way out of letting the tax cuts expire. Democrats cannot avoid being blamed for taxes going up. I don't need any more proof that you are politically inept - Sanders 2012? yeah, that's gonna happen. You guys love rhetoric especially when you know that shit can't be backed with actual action.

Posted by: Alli on December 17, 2010 at 8:26 AM | PERMALINK

"Victory," hell! This is a disaster for the Democrats, and they were fools to buy into it.

Posted by: candideinnc on December 17, 2010 at 8:31 AM | PERMALINK

Steve, you shouldn't define "success" in terms of legislative majorities. It may do damage in the future (tax cut extensions won't really expire, Social Security at risk), and furthermore aids and abets the meme that tax cuts are stimulative, as shown in the NYT "rag of record" that you quote:
The bipartisan support for the tax deal also underscored the urgency felt by the administration and by lawmakers in both parties to prop up the still-struggling economy and to prevent an across-the-board tax increase that was set to occur if ...

Posted by: neil b on December 17, 2010 at 8:37 AM | PERMALINK

Democrats suck! Democrats are weak! Primary Obama! Sanders/Kucinich in '12! Vote for real progressives who don't stand a chance of winning and maintain your ideological purity TODAY!


*This message brought to you by SarahPAC

Posted by: John S. on December 17, 2010 at 8:37 AM | PERMALINK

But John S, if Sarah runs in 2012 then maybe people like Sanders and Kucinich can be elected ... albeit enormous risk that Palin might win.

Posted by: neil b on December 17, 2010 at 8:43 AM | PERMALINK

It is what it is. Looking back at how this unfolded, I don't think it was ever going to end any differently. We live under rulers who designed the Bush economic policies. Regardless of who is elected to office. That should be obvious at this point. Low taxes on the rich and a shrinking social safety net. Private industry firmly in control of the health care sector. All the noise is about keeping the rabble occupied with peripheral issues. The Republic is long gone. Has been for a very long time. It is all theatre. For ugly people as someone once said.

Posted by: SW on December 17, 2010 at 8:50 AM | PERMALINK

@tanstaafl, when do the RepuGs pay any attention to what the public wants? They will have the numbers to outvote and/or block the few remaining Democrats on anything.

BTW, anyone out there wanting to buy a new car or home or any other major purchae? Be sure to take "The Negotiator" with you. Obama needs the extra work. But, if he had to negotiate with the late Cal Worthington, you would end up with the Rhino instead of that fancy car you wanted. Amazing how a great Con Law professor can let himself be Conned. No trial lawyer he.

Posted by: berttheclock on December 17, 2010 at 8:58 AM | PERMALINK

SW -You said it. If you find a functioning democracy , let me know.

Posted by: John R on December 17, 2010 at 8:58 AM | PERMALINK

"aids and abets the meme that tax cuts are stimulative"

tax cuts are stimulative,and tax cuts to the working poor and middle class are significantly more stimulative than tax cuts to the rich. It is just that benefits to the unemployed are several times more effective.

This is a compromise, not a loss.

since payroll taxes are so regressive, reducing them is not a bad thing for income distribution.

And when the time comes, I suspect Republicans aren't going to care about payroll taxes going up.
They only care that rich people's tax rates go down.

If the next two years is spent "simplifying" the tax code- reducing the deductions and credits that primarily benefit the rich and uppper middle class, it may be possible to actually lower tax rates but still extract more actual dollars from the rich.

Posted by: Johnny Canuck on December 17, 2010 at 9:01 AM | PERMALINK

Bullshit bert.

They will have a slim majority in the House. They will still be a minority in the Senate. They will need to be able to get past a Presidential Veto on any plan to gut Social Security.

They had a lot more going for them when they tried to privatize social security during the Bush administration and they went down in flames. If they succeed this time, it will be at least as much due to public apathy preventing the kind of backlash we saw then as it will be to any Democratic fecklessness.

Posted by: tanstaafl on December 17, 2010 at 9:04 AM | PERMALINK

P.S. If the paranoid future fantasies described by AngryOldVet come true, then our system is so hopelessly corrupted that this months compromise will have been irrelevant. If you really believe things are already that bad, you might as well emigrate now because nothing you can do will change it.

Posted by: tanstaafl on December 17, 2010 at 9:08 AM | PERMALINK

See all of you in another thread, going to be busy for a few hours and this one will be dead by the time I get back.

Posted by: tanstaafl on December 17, 2010 at 9:09 AM | PERMALINK

P.S. If the paranoid future fantasies..... described by AngryOldVet come true..... you might as well emigrate now because nothing you can do will change it.-tanstaafl

If 12 months ago, when a wild-eyed bunch of Teatarding Republicans were thundering away about debts, deficits, inflation, and Armageddon, AOV had written a "paranoid future fantasy" about those deficit hawks holding out on a bill because it only increased the deficit $3.2 Trillion instead of the $4.0 Trillion they wanted. Would you back then have said:

then our system is so hopelessly corrupted that this months compromise will have been irrelevant. If you really believe things are already that bad, you might as well emigrate now because nothing you can do will change it.

This Democracy is gone. At this point better to vote Palin '12 while making preparations to emigrate to a nation high above sea level.

Posted by: BetweenTheLines on December 17, 2010 at 9:49 AM | PERMALINK

Well, that was fast! Great, just fucking great! The party of fiscal responsibility strikes again, and of course I'll never look at that dumb son of a bitch in the White House with any respect again. Gee, I can't wait for the repugnant cunts to shoot down DADT in a super surprise ending, or any other bill or proposal still on the table. Voting for Sarah in 2012 because again, America and it's gun toting teabagging population of morons richly deserve her.. Just charge it!

Posted by: Trollop on December 17, 2010 at 9:51 AM | PERMALINK

Slightly off topic, but I had been planning on buying a house this year. Then it turns out that no one, and I mean no one can tell me who really owns the god damn things. Seems like maybe someone would consider fixing that little issue going forward.

Posted by: SW on December 17, 2010 at 10:04 AM | PERMALINK

There's Barack Obama and there's the rest of Washington. The first is just about the only defense the American people has from the later.

Posted by: impik on December 17, 2010 at 10:20 AM | PERMALINK

This is an example of bipartisan cooperation?? There is no easier vote than one to cut taxes. And the people voting for it will worry manana about the effects on the deficit.

Posted by: wordtypist on December 17, 2010 at 10:34 AM | PERMALINK

"only defense the American people has from the later"

Welcome to the Redux Maginot Line. BTW, the RepuGs will be coming through the Ardennes; pass it on.

Posted by: berttheclock on December 17, 2010 at 10:37 AM | PERMALINK

Johnny,

tax cuts are stimulative

The independent non-partisan Congressional Budget Office disagrees with you.


If the next two years is spent ‘[simplifying’ the tax code- reducing the deductions and credits that primarily benefit the rich and uppper middle class, it may be possible to actually lower tax rates but still extract more actual dollars from the rich.

That’s a SCAM to further shift the tax burden from the Rich & Corporate to the Middle-class and Working Poor.


Posted by: Joe Friday on December 17, 2010 at 10:52 AM | PERMALINK

Then it turns out that no one, and I mean no one can tell me who really owns the god damn things. Seems like maybe someone would consider fixing that little issue going forward.
Posted by: SW on December 17, 2010 at 10:04 AM

Except it is not a little issue. Millions of discrete transactions, who knows which ones with sloppy paper work, and the Republicans blocking appointment of judges..., and states reducing their work forces.

Would it make more sense to try different houses until you find one with a solid title?

Posted by: Johnny Canuck on December 17, 2010 at 10:55 AM | PERMALINK

How can this be right?
"The House bill is identical to the Senate measure, so there will be no additional wrangling. The agreement now heads to the White House, and President Obama is expected to sign it into law today."

Is it just food & drug bills that the Senate has to vote on twice? I thought it was tax bills, e.g., bills to cut payroll taxes for a year, and such like that.

How is everyone missing this, after we just got a lesson last week?

Posted by: tax Bills originate Where??? on December 17, 2010 at 12:34 PM | PERMALINK




 

 

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