The Deal

I have my disappointments concerning President Obama. The Can't-Cun conference seems to have been entirely ignored, and some plain talk on the Climate Crisis might help change the dynamic, but President Obama still prefers to get at this issue sideways by talking about clean energy and its role in the economic future. (Still, even when he talks about that, he's mostly ignored.)

But I have very little patience for the baying hyenas of the left who accuse him of cowardice for making a deal on tax cuts. During a commercial on Monday Night Football, I switched through MSNBC--where they were howling about Obama's selling out--and FOX--where they were howling about Obama not praising leaders of the Death Eaters Party enough for allowing this compromise.

The voice that mostly wasn't being heard was Obama's. So I had to go to the White House site to hear his point of view:

"Ever since I started running for this office I've said that we should only extend the tax cuts for the middle class. These are the Americans who’ve taken the biggest hit not only from this recession but from nearly a decade of costs that have gone up while their paychecks have not. It would be a grave injustice to let taxes increase for these Americans right now. And it would deal a serious blow to our economic recovery.

Now, Republicans have a different view. They believe that we should also make permanent the tax cuts for the wealthiest 2 percent of Americans. I completely disagree with this. A permanent extension of these tax cuts would cost us $700 billion at a time when we need to start focusing on bringing down our deficit. And economists from all across the political spectrum agree that giving tax cuts to millionaires and billionaires does very little to actually grow our economy.

This is where the debate has stood for the last couple of weeks. And what is abundantly clear to everyone in this town is that Republicans will block a permanent tax cut for the middle class unless they also get a permanent tax cut for the wealthiest Americans, regardless of the cost or impact on the deficit.

We saw that in two different votes in the Senate that were taken this weekend. And without a willingness to give on both sides, there’s no reason to believe that this stalemate won't continue well into next year. This would be a chilling prospect for the American people whose taxes are currently scheduled to go up on January 1st because of arrangements that were made back in 2001 and 2003 under the Bush tax cuts.

I am not willing to let that happen. I know there’s some people in my own party and in the other party who would rather prolong this battle, even if we can't reach a compromise. But I'm not willing to let working families across this country become collateral damage for political warfare here in Washington. And I'm not willing to let our economy slip backwards just as we're pulling ourselves out of this devastating recession.

I'm not willing to see 2 million Americans who stand to lose their unemployment insurance at the end of this month be put in a situation where they might lose their home or their car or suffer some additional economic catastrophe.

So, sympathetic as I am to those who prefer a fight over compromise, as much as the political wisdom may dictate fighting over solving problems, it would be the wrong thing to do. The American people didn’t send us here to wage symbolic battles or win symbolic victories. They would much rather have the comfort of knowing that when they open their first paycheck on January of 2011, it won’t be smaller than it was before, all because Washington decided they preferred to have a fight and failed to act."


The Deal will mean all the Bush tax cuts will continue for two more years--for the middle class as well as the wealthy. It also means unemployment benefits will be extended for another 13 months. Without action, all of these would have expired the end of this month.

But there's more--continuing the Obama tax cuts from the original stim, the earned income tax credit and other benefits, plus a payroll tax decrease early next year and incentives for small businesses. And the prospect of votes on unrelated but important matters, such as Don't Ask Don't Tell repeal and the START treaty to reduce nuclear weapons.

Some observers believe this is quite a good deal. Even a politically smart deal. But what I find most convincing is that the cumulative effect would be to add more stimulus to the economy when it needs it: to the tune of some $200 billion. With support of GOPers, yet. A stealth stim.

President Obama continued:

"I have no doubt that everyone will find something in this compromise that they don’t like. In fact, there are things in here that I don’t like -- namely the extension of the tax cuts for the wealthiest Americans and the wealthiest estates. But these tax cuts will expire in two years. And I’m confident that as we make tough choices about bringing our deficit down, as I engage in a conversation with the American people about the hard choices we’re going to have to make to secure our future and our children’s future and our grandchildren’s future, it will become apparent that we cannot afford to extend those tax cuts any longer.

And let me just end with this. There’s been a lot of debate in Washington about how this would ultimately get resolved. I just want everybody to remember over the course of the coming days, both Democrats and Republicans, that these are not abstract fights for the families that are impacted. Two million people will lose their unemployment insurance at the end of this month if we don't get this resolved. Millions more of Americans will see their taxes go up at a time when they can least afford it. And my singular focus over the next year is going to be on how do we continue the momentum of the recovery, how do we make sure that we grow this economy and we create more jobs.

We cannot play politics at a time when the American people are looking for us to solve problems. And so I look forward to engaging the House and the Senate, members of both parties, as well as the media, in this debate. But I am confident that this needs to get done, and I'm confident ultimately Congress is going to do the right thing."

This may not play to Washington egoes and gland-driven politicos, but it is the right balance for governing: between the needs of the future and the needs of the present. A better and fairer economy provides resources as well as a better frame of mind for building the future. But no President should ignore the advice that Harry Hopkins gave to FDR: "People don't eat in the long term. They eat every day."

This isn't a New Deal or a Fair Deal. And while I applaud Nancy Pelosi and the House Dems for voting against the tax cuts for the superrich last week, this appears to be a Deal that we need.