If I have seen farther than others, it is because I was standing on the shoulder of giants.
Isaac Newton
It Was Like Trying To Pull Teeth: FINALLY, A COMPROMISE!
It is predictable that a real compromise would alienate many Congressional Democrats whom over the past decade had made reinstating the Clinton tax hikes on higher-income people one of their principal political objectives, something they thought they were on the cusp on winning with huge majorities and reaffirmed just last week. There are some murmurs of a filibuster by progressive Democrats. And even retiring Senator Voinovich (R-OH) has balked because the tax cuts have not been paid for.
As a confirmed deficit hawk, I share Voinovich's concern about a price tag which could approximate the size of the 2009 stimulus bill. But the deal has more to do with reducing economic uncertainty, is temporary in nature, and by no means rules out austerity measures and entitlement reform: in fact, the bipartisan deficit commission plan had proposed elements of a payroll tax holiday and lower marginal rates in their plan, which is certainly consistent with this compromise.
What are the elements of the compromise? The Republicans, of course, wanted to make all the tax cuts permanent or at least for a 3- to 5-year extension, in accordance with typical business planning. They were also wanted a lower estate tax and a higher exemption base and keeping investment taxes cut or at least constant. They didn't get what they wanted, but a two-year deal on taxes keeps the status quo until the next election--and perhaps a new Republican President. What did Obama want? He needed to lock-in the middle-class tax cut which was a critical campaign promise. Thirteen months of unemployment compensation without going through pay-go. Continuation of the stretched-out means-tested tax credit ("Making Work Pay") and a few other stimulus breaks; instead, he got a year 2-point payroll tax cut, which essentially doubles Making Work Pay, but makes it available to all workers.
I would have liked to see more business-oriented tax breaks (including the payroll tax, which I think would create an incentive to take on new employees, and reducing the top corporate tax rate), I've repeatedly pointed out the game playing that goes on with temporary tax cuts, and, as Voinovich pointed out, more emphasis on compensatory spending reductions.
I haven't read anyone yet saying this (although I'm sure I'm not the first to see the parallel), but was this President Obama's GHW Bush's "Read my lips" moment? With rumors of a potential insurgent candidate for the 2012 nomination, e.g., defeated incumbent Senator Russ Feingold (D-WI) prominently mentioned, it could be, but I don't see a Democratic Party denying renomination of a personally popular, first President of color. It might actually be to Obama's benefit, by portraying him as a "centrist" with an insurgent attacking him from the left for "selling out" or "caving in" to the Republicans.
I see this as a "win-win" for both parties. First, Obama gets some face-saving way of delivering the middle-class cuts while getting a pass on unemployment compensation, a contentious issue over the past year in exchange for stable tax rates for higher-income workers. Second, the Republicans and Obama have achieved a first genuine bipartisan compromise, which is a confidence-building measure for the White House dealing with a GOP-controlled House next term.
Will angry, frustrated Senate Democratic progressives try to kill the compromise by filibustering it? I don't think so. There may be an attempt by certain senators, but Obama can't afford to lose this battle. First, he's not going to get a better deal from the Republicans. Second, it would undermine his credibility and leadership.
Some Quick Notes
- GOP House Leadership Wants More Information on State/Local Pension Funding: Thumbs UP! I have posted several times against the mere idea of bailing out chronically underfunded state/local pensions. There's a potential fight among Republicans; one group (including Paul Ryan (R-WI)) wants more transparency on unfunded liability in order to qualify for favorably treated municipal bonds (versus state rights' conservatives whom resent additional reporting requirements).
- Jindal Thinks That Palin is 'Absolutely' Electable as a Presidential Candidate in 2012? Give me a break.... Romney, who is likely the early front-runner in the early running for the 2012 GOP nomination for President, has said some positive things about Palin, and Louisiana Governor Jindal said similar things. I think Republican lawmakers are so concerned about the backlash by attacking an unqualified potential candidate like a charismatic Palin that they are bending over backwards to concede her candidacy's legitimacy. Nobody seriously believes that independents whom remain unfavorable towards Palin (even if you get past the fact that she resigned in the middle of her only term as governor) are going to choose Palin over Obama in battleground states.
- Sen. McCain: Stop the Fear-Mongering Over Military Open Enrollment for Gays. I have the highest regard for Sen. McCain. But predictions of large numbers of service members refusing to reenlist because of open enlistments for gays and promoting opinion polls adverse to these policies. I'm not particularly interested in giving service members the right to trample on the constitutional rights of particular groups of people. (For example, we don't promote the legitimacy of petitions based on whether white soldiers would prefer not to serve with Asian Americans, African Americans or Latinos.) In fact, gays have served in the military without many straights ever realizing it.
Political Humor
Obama was going to have a meeting with Afghan President Karzai about the country’s corruption, incompetence, and the wasting of American tax dollars. And that’s just what Karzai was going to lecture Obama about. - Jay Leno
[Because of logistics, Obama did not see Karzai in person, but spoke to him by phone while in Afghanistan. I'm not saying that Karzai didn't want to hear what Obama had to say, but Obama during the cellphone call kept repeating, "Can you hear me now?"]
What kind of name is WikiLeaks? It sounds like a Hawaiian guy that’s incontinent. - Jay Leno
[Or maybe R2-D2 is overdue routine maintenance...]
Musical Interlude: Holiday Tunes
Frank Sinatra, "The Christmas Waltz". I've heard this song dozens of times, but never knew its name...Timeless classic, from one 'Blue Eyes' to another... [Coming from a blue-eyed family (well, one sister has green eyes), I never thought much about it (none of the girls I dated ever mentioned it) until I worked on a project in Brazil, and one of the ladies blurted out, "Your eyes are so blue..."
