Cutting a Deal

Wednesday, December 08, 2010

I don't much like the deal President Obama cut with House and Senate Republicans to extend tax cuts for the wealthiest and unemployment benefits. There is no evidence that tax cuts make a significant impact to economic growth, but I believe extending unemployment benefits will.  I worry about the impact the entire package will have on the deficit.  Half of me wants it to pass, half of me wants it to fail.

Legislators are saying Obama caved, or he compromised, or he gave in to blackmail. In his press conference, Obama seemed to admit it was blackmail.  The New York Times has another take

Each description may be true, but isn't it hypocritical for Democratic legislators to complain considering they cannot get anything better through the legislature, even though they hold majorities in both chambers? Isn't it their job to elect effective leaders who will get something better through Congress?

If they don’t like it, pass something better. Obama will sign it.


steves 1:51 PM  

Bob, I had mixed feelings too. I thought that it seemed irresponsible to add more to the budget and not increase revenues, but with so many relying on unemployment to put food on the table and pay bills, it probably was the best thing to do.

Obama said that any political games would only end up hurting the people that needed those benefits, so I think he made the best call. He gets my respect for making a somewhat unpopular decision that happens to be the right one.

Streak 2:45 PM  

I wrote on this yesterday, and am obviously biased, but think that Obama eventually made the best decision. I think he started out compromising, but that is the nature of a pragmatist, I think.

As for the suggestion that Democrats run both houses, that is true (obviously for now), but only to a point. As numerous people have pointed out, Republicans have threatened the filibuster so much that they have had a virtual majority on those issues they decide to block.

Pete,  10:10 PM  

Why don't they call their bluff and actually force them to physically filibuster?

Streak 12:04 AM  

Pete, I could be wrong, but what I read suggests that it is far easier to filibuster (especially with a committed Republican base) than it is to actually withstand one.

Monk-in-Training 7:34 AM  

I think Pete might be on to something, after all, if you let someone do dysfunctional things with no cost, they will keep it up.

Make them go through with, and stand and talk hour upon hour if they want to tie up the Senate, then do it right! Letting them obstruct with no cost to them is just...a mess.

Mr Furious 10:34 AM  

This whole affair has had me all over the map... with fury aimed at the far left, Obama, Congress, Blue Dogs and—as always—the GOP.

I could hardly read that NYT story, partly because I feel like I've read excerpts of it a hundred times, and partly because delving into this makes me want to throw up in my mouth.

One part did jump out at me as horseshit:

The Congressional Budget Office and other analysts have said that cutting the workers’ portion provides less bang for the buck because individuals are likely to save some portion of the money. Cutting the employers’ portion subsidizes hiring.

That's crap. Corporations have been hoarding cash for two years now without hiring. You cannot expect me to believe TEMPORARY reduction in payroll taxes would create a single PERMANENT job. Whereas, the average worker who hasn't seen a pay increase in at least as long is likely to be spending every goddamn dime coming into the household.

The sad reality is (and I believe this will be the case for me) is that much of the extra $100 a month will be erased on the gross side of my paystub by a corresponding hike in my health insurance costs.

Whatever amount actually makes it into most Americans pocket will do little to make them feel more secure about anything, if they notice at all.


From a pure policy perspective the tax cuts across the board should evaporate, and some new, more targeted relief applied from the bottom up, and cash the government is adding to the debt should be directed at more direct stimulus spending that has more job creating potential, and might actually result in a contribution to the nation's future through progresssive infrastructure.

After the first stimulus, can anyone point to anything that resulted other than another topcoat of asphalt on (insert your nearby Interstate here)?

Is this even coherent? Politics these days leaves me feeling like I'm hammered...

Bob 9:46 AM  

"'Cutting the employers’ portion subsidizes hiring.'

That's crap."

I agree that is crap. Companies do not hire becuase it is a little cheaper to do so. They hire when they can justify it because they are going to produce more products or services as a result fo that new employee.

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