Kim reported this morning on the tax cuts and unemployment insurance compromise struck by President Obama and Republican leadership. Here’s a round-up of a few more reactions to it, good and bad.
David Leonhardt suggests that “the deal amounts to a second stimulus bill.”
The $900 billion deal to extend all of the Bush tax cuts represents a substantial retreat for the president on a major campaign promise, a major victory for the Republican Party, and, let’s face it, complete obliteration of the notion that the deficit matters politically as anything other than a blunt instrument to wield against the welfare state. The deficit is an absolute emergency when it comes to making sure all Americans have health care, but an afterthought when it comes to cutting taxes for the wealthiest Americans.
So, was this worth it? I’d still say no, although it’s better than what I expected over the weekend. It still greatly increases the chances of the Bush tax cuts being made permanent — especially because the front-loading of the stimulative stuff actually worsens Obama’s 2012 electoral prospects.
Overall, enough sweetener has been added to diminish, but not eliminate, the bitterness of the disappointment.
The long-term unemployed are on the verge of dropping off the political radar entirely. This potential agreement would probably seal their hopeless fate. A 13-month extension of the current tiers is likely the last we’ll get for the unemployed out of this government.
Who gets what? For Republicans, that’s easy: a two-year extension on all Bush-era tax rates, regardless of income. Making matters slightly worse, the White House also agreed to include a deal on the estate tax, raising the exemption to $5 million per person and a 35% maximum rate, and a two-year extension on a capital gains top rate of 15%.
But then there’s the flip-side. The president secured a 13-month extension of aid for the long-term unemployed, reportedly his top priority. The deal also includes a reduction in the Social Security payroll tax, which will give workers a boost in their paychecks; an expanded earned-income tax credit; the continuation of a college-tuition tax credit; and new opportunities for businesses to write off the cost of some equipment purchases.
Obama was able to secure help for the middle class and the unemployed; Republicans were able to keep breaks for the wealthy. In other words, both sides got to fight for their natural constituencies.
I was talking to one well-known writer-activist last night who said he thought it was odd that the UI extension was being “shrugged off” by so many. I agree. I think a lot of the online bloggery outrage is being fueled by people who don’t have a visceral understanding of what it’s like to be at the end of your financial rope. (Class matters.)
With this president, with these Republicans, at this time, I think this is approximately as good as it can get. There will be changes before the deal is approved (it would be swell, for instance, if Bernie Sanders held out for the 99ers), but this is about what it’ll look like.
And for the people who can breathe, knowing they can survive for another 13 months, that’s a good thing.