Criticism has rained down on President Obama for giving the Republicans what they want. Obama has explained that compromise gives each side something they want and something that they have to give up that they don't want. This was the tax cut compromise. Obama said that he did not want to play politics with the lives of people that need help now, especially the 2,000,000 that are currently unemployed and need their unemployment benefits to exist. But Republicans were willing to play chicken and the President blinked first. Could a stand alone unemployment benefit bill have passed? Would Republicans vote no to such a bill? The answer to that is "yes". And then the political game would be on. Republicans could claim that the benefits were not paid for and that it perpetuated laziness and a welfare state. Democrats could claim that the Republicans were heartless and only seemed to worry about programs costs and how it would be paid for when it is not a program they favored. The tax cuts for the wealthy certainly aren't paid for. The tax cuts for the wealthy add billions of dollars to the deficit and consequently the national debt. Why don't those have to be paid for?
Obama said that not agreeing to the tax cut plan would raise taxes on the middle class. This would have a negative impact on the spending power of both the unemployed and the middle class and therefore a big impact on the economy and the recovery effort. But this would decrease the take home pay of working Americans only slightly and would raise billions of dollars from the wealthy as their tax cut would expire too. This would bring in billions to the US Treasury and therefore curtail the amount of the deficit and consequently the national debt.
What to do? What to do?
Many Democrats feel that Obama gave up too much. The wealthy gain big time with the tax cut for them. The middle class would pay higher taxes, but not to the point of making major changes to their life style. The biggest stumbling block is the unemployed. So was the deal for those 2,000,000? If you are one of them, you see that your lifeline is extended for a while and that is a great thing. So, what is the best thing for the US regardless of politics?
In the short term, the tax deal helps a lot of people and is a good thing. In the long run, maybe not. If US revenue increases, the deficit can be cut. Combine that with a supposed end to earmarks (supposed), and a major change in deficit spending could take place--a good thing. In reality the tax rates would just go back to what they were during the Clinton administration. You might remember those times. We weren't involved in any war, the unemployment rate was at record lows, and (gasp!) we actually ran a surplus instead of a deficit. IF Democrats could have found the nerve to stop the tax deal, could they have put the Republicans on the spot repeatedly by forcing votes that the Republicans said they would block without the tax cut for the wealthy? What would happen if every day a vote was defeated or blocked by Republicans on any issue that would be perceived as helpful to the US in the long run? Would the Republicans have the fortitude to continue and continue to block everything?
We won't know now, will we?
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