Morning After Reflections On The Tax Deal


Everyone has had a chance to sleep on the deal to extend Bush tax rates, announced last night by President Obama and congressional Republicans.  Congressional Democrats were largely irrelevant to the process, and did not sleep well.  They’ve been making utter fools of themselves with increasingly demented class-warfare rhetoric for weeks, and now they feel they’ve got nothing to show for it.

Democrat congressman Jim McDermott, for example, told Politico “This is the President’s Gettysburg.  He’s going to have to decide whether to withstand Pickett’s Charge.  I worry.”  McDermott is livid at the idea of refusing to raise taxes on The Evil Rich, although he personally had no problem taking bags of cash from Iraqi businessmen tied to Saddam Hussein’s Oil for Food scandal, until the media called him on it.

Lefty blogger Oliver Willis prefers World War II metaphors to the Civil War, sneering that Obama’s agreement “cedes the Sudentenland to the Republicans.”  Because Mitch McConnell is just like Hitler, see.  Amusingly, he threw in a link to the Wikipedia entry for the Sudentenland, on the (probably accurate) assumption his readers are even more ignorant than he is.

John Conyers (D-MI) took a break from being embroiled in scandal to thunder, “This is a fight for the heart and soul of the Democratic Party and the Nation.”  I hope the heart of the Democratic Party isn’t stashed in the cargo area of that government-issue Cadillac Escalade his son’s been joyriding in!

House Democrats and the President are busy accusing each other of “caving without a fight.”  Congressman Anthony Weiner (D-NY) abandoned war metaphors entirely and switched to football, asking the President, “Why are [Democrats] always punting on third down?  Let’s get our offense on the field.” 

Meanwhile, a senior White House official told ABC News, “We wanted a fight, but [House Democrats] wouldn’t throw a punch.”  More football metaphors were then offered: “It was like the Jets versus the Sharks, except there weren’t any Jets.  Senator Schumer says he wants a fight?  He couldn’t hold his caucus together.” After last night, I would have used the Patriots versus the Jets for that metaphor.

Liberals aren’t the only ones who see the tax compromise as a surrender.  Conservative columnist Michelle Malkin points to the extension of unemployment benefits included in the deal, and says “many small businesses are getting hammered by the bottomless government subsidies for the unemployed at the expense of struggling employers.”

Conservative radio host Hugh Hewitt asks, “Why did we work so hard for so little?  A squandering of momentum and good will, energy and the opportunity to make the case for stable, low tax rates as the key to economic growth as well as the immorality of the death tax.  GOP presidential candidates should denounce the deal.”

Both sides have reason to be disappointed, which is perhaps not surprising for a compromise reached under intense time pressure.  Liberal Democrats really did put themselves out there to defend tax increases.  Presidential advisor David Axelrod spent early November making statements like “we believe that it’s imperative to extend the tax cuts for the middle class, and don’t believe we can afford a permanent extension of tax cuts for the wealthy” to the National Journal.  There was much talk of lines drawn in the sand.

The philosophical concession from Obama is important, but did it come at too high of a price?  After all, we’re talking about “victory” in a bitter battle to refrain from raising taxes.  No one’s taxes have been cut.  We’ve granted the economy a stay of execution, which is a far cry from doing anything to improve it.  The puny payroll tax concession included in the deal is not going to contribute to long-term growth. 

This week’s exhausting political struggle did not cut any spending – in fact, it increased it, by extending unemployment benefits.  The few feeble gestures toward fiscal discipline made thus far, like the President’s “federal pay freeze” proposal, turned out to be scams.  If the rising star of the Tea Party movement reaches its apogee with nothing more than preserving our existing tax rates, it really will be a defeat.

All of the liberal caterwauling will only work to Obama’s advantage in the long run – few Americans willingly vote for liberals, so camouflage is essential, and Obama’s natural radical instincts make Clinton-style triangulation difficult.  He needs a lot of help, and the shrieking harpies of the Left are giving it to him, gift-wrapped for Christmas.  You can expect this tax-cut deal to be cited by the President as the reason for poor economic performance during his re-election campaign… or as a brilliant “centrist” move made by our beloved “moderate” leader, if the economy rebounds by 2012.

Of course, the new Congress will be seated soon, and its makeup will be considerably different from the lame-duck session.  This kind of deal might be seen in retrospect as the best that could have been hoped for, if the 112th Congress lives up to expectations.  Criticism of the agreement is reasonable and productive, but I wouldn’t get too upset about it, until we see what comes next.