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Wednesday, September 08, 2010

A Fight Worth Having

Boxing match
Any headline that includes the words "Obama is Against a Compromise" is probably a move in the right direction. It turns out that if a fight's worth having, you have to be prepared to lose. But this White House has been more than willing to avoid fights worth having. Take healthcare reform: the administration began at the compromise position -- a public option, rather than singlepayer -- and compromised even that away. It was a victory, but it was a Pyrrhic victory, disappointing the liberal base and going a long way toward dulling the enthusiasm of Democratic voters going into the midterm elections. "Obama is Against a Compromise" sounds a lot more like leadership than "Obama Builds Coalition to Study Alternatives."

So liberals must find a New York Times article, titled "Obama Is Against a Compromise on Bush Tax Cuts," more to their tastes. Liberals like a fight, as long as it's the good fight, and this means it's good to see the president draw a line in the sand.

President Obama on Wednesday will make clear that he opposes any compromise that would extend the Bush-era tax cuts for the wealthy beyond this year, officials said, adding a populist twist to an election-season economic package that is otherwise designed to entice support from big businesses and their Republican allies.

Mr. Obama’s opposition to allowing the high-end tax cuts to remain in place for even another year or two would be the signal many Congressional Democrats have been awaiting as they prepare for a showdown with Republicans on the issue and ends speculation that the White House might be open to an extension. Democrats say only the president can rally wavering lawmakers who, amid the party’s weakened poll numbers, feel increasingly vulnerable to Republican attacks if they let the top rates lapse at the end of this year as scheduled.

Unfortunately, it's around here that the article turns a little dumb. "It is not clear that Mr. Obama can prevail given his own diminished popularity, the tepid economic recovery and the divisions within his party," the piece goes on. "But by proposing to extend the rates for the 98 percent of households with income below $250,000 for couples and $200,000 for individuals -- and insisting that federal income tax rates in 2011 go back to their pre-2001 levels for income above those cutoffs -- he intends to cast the issue as a choice between supporting the middle class or giving breaks to the wealthy."

Sure, Republicans are going to stoke up "the tepid economic recovery," because economic flateartherism is what they're all about. And yes, there are "divisions within his party." But since when would the president's "diminished popularity" make any difference? Right now, a CNN/Opinion Research poll finds "three in ten said that the Bush-era tax cuts should be continued for all Americans, with just over 50 percent saying those tax cuts should be continued only for families who make less than $250,000 a year, and nearly one in five believing the tax cuts should expire for all Americans."

In other words, what Obama's proposing may not have the largest majority in the history of polling, but it is the majority position. The Republican position -- that all tax cuts be extended -- is a loser in the public's eye. What does the president's popularity have to do with anything? Teabaggers may think, "If Obama's for it, I'm against it," but no one else older than three does. Being contrary for the sake of being contrarian isn't something most adults do.

Meanwhile, the Republican side of the argument would add $36 billion to the deficit next year, according to the nonpartisan Joint Committee on Taxation. This kind of undercuts the deficit hysteria Republicans are trying to whip up. Are you guys for or against reducing the deficit? Because you're sending mixed messages here.

The August Washington Post article that brought us the $36 billion figure also previewed the Republican argument. And it is dumb. "Republicans accuse Democrats of plotting one of the biggest tax hikes in American history, arguing that raising taxes on wealthy households would punish the very people capable of creating jobs, spurring economic growth and reducing the 9.5 percent unemployment rate. About half of all small-business income is reported on the individual returns of people making over $250,000 a year, according to the taxation committee's data, though those taxpayers represent only about 3 percent of small businesses."

Wealthy people don't create jobs and wealthy people don't spur economic growth. Consumers do that. Jobs are created to fill needs and demand determines what those needs are. As always, conservative economics has everything bass-ackward, as if more products on the shelf means more people will go out and buy. Further, that last sentence is a better reason to end the tax cuts than to extend them. If half of small business income comes from just 3% of small businesses, then ending the tax break will reduce the deficit, while having very little impact on small business. How is that a bad thing?

There's more to this than economic common sense. Democrats need something to vote for -- as well as something to vote against. If you want the base to turn out on election day, you give them a fight. It's especially helpful that this is a fight that matters.


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