President Obama announced a deal with Republican leaders to extend the Bush tax rates - at all income levels - for two more years, along with a 13-month extension of unemployment benefits, on Monday night. The arrangement also includes a 2-percent reduction in payroll taxes, replacing a tax credit introduced by the President in his 2009 stimulus package, along with a temporary extension of lower estate tax rates.
"We cannot play politics at a time when the American people are looking for us to solve problems," CNN quotes the President as saying. This is a stinging rebuke to the President's own party, which has been furiously playing political games during the twilight days of the 111th Congress.
Republican Dave Camp, ranking member of the Republican House Ways & Means Committee, said of the deal: "Preventing a massive, job-killing tax increase on families and small businesses is my number one priority. This framework will allow us to extend all current tax rates and give economic recovery and job creation a chance. The failure to reach and pass an agreement preventing a tax hike would have been devastating for families, especially those who are still looking for work." This is another stinging rebuke to the Democrats, who have been desperately arguing that rising tax rates do not reduce economic activity, rich people never spend any money, and unemployment compensation is the only meaningful form of economic stimulus.
The Democrats do not like this persistent stinging sensation. CNN quotes a Democrat congressional source as saying, "We won't rubber stamp a deal between the White House and [Senate Minority Leader] Mitch McConnell. We want to make it clear: don't take our support for granted." It looks like McConnell has been selected to wear the Grinch costume this year, as previous attempts to demonize incoming House Speaker John Boehner didn't pan out.
Reaction from the Left is predicted to be high-pitched and angry. Democrat Party operatives plan to deal with their enraged nutroots constituents by whispering "Sarah Palin" until they cry themselves to sleep.
