Liberals Livid As Obama 'Surrenders' On Tax Cuts : It's All Politics The White House seems ready to compromise on extending the Bush-era tax cuts for another two years, in exchange for extending unemployment insurance benefits.  But the left is livid.
NPR logo Liberals Livid As Obama 'Surrenders' On Tax Cuts

Liberals Livid As Obama 'Surrenders' On Tax Cuts

The big gains in the House and Senate made by the Republicans in this year's elections won't be realized until the new Congress is sworn in on Jan. 5.

But it seems clear that, even now, the GOP holds the power in Washington.  At least on taxes.

If there was one certainty about President Obama it was that he was going to block renewing the tax cuts instituted during the Bush years on incomes that surpassed $250,000.  "No bailouts for the rich" was the Democrats' common refrain.  No way was the White House going to budge.  Absolutely not.

Now, it looks like some budging is in the offing.

First, the Republicans have two things on their side.  They have made the argument that, given the state of the economy, a tax increase would be the wrong message to send at this time ... and they have further prevailed with their point that letting the Bush-era tax cuts expire would in effect be a tax increase.

Democrats have long said they want to renew the tax cuts for the "middle class" -- yearly incomes of under $250,000.  Republicans have said it's tax cuts on all income or nothing, and nothing would get done in Washington until that happened.

Here's the other thing the GOP had going for them.  The temporary extension of unemployment insurance benefits has ended.  Republicans now had something to offer the White House in exchange for the tax cut renewal.  We'll agree to extending unemployment benefits if you agree to renew the Bush tax cuts for, say, two years.  Obama looks ready to deal.  An announcement is expected sometime this week.

But what about congressional Democrats?  They were once so confident that their "no tax cuts for the rich" message would prevail.  They were further confident that Republicans would pay a political price for opposing the extension of unemployment benefits.  Neither has happened.

Frustrated, Democrats tried, in two Senate votes on Saturday, to bring to the floor proposals that would limit the tax cuts to earnings under $250,000 (offered by Montana's Max Baucus) and then one that would end the tax breaks on income over $1 million (offered by New York's Chuck Schumer).  The efforts may have been symbolic since they knew the Obama administration was negotiating with the GOP.  Still, neither proposal got the 60 votes needed to bring them to a vote.

And so a deal is perhaps days away ... "against my judgment," said Senate Democratic Whip Dick Durbin (Ill.) on yesterday's "Face the Nation" on CBS.  Tax cuts on incomes of over $1 million, he said, is "unconscionable."

The left, understandably, is livid.  In Sunday's New York Times, columnist Frank Rich wrote that the Republicans are going to win this fight because that Obama "has seemingly surrendered his once-considerable abilities to act, decide or think":

The cliché criticisms of Obama are (from the left) that he is a naïve centrist, not the audacious liberal that Democrats thought they were getting, and (from the right) that he is a socialist out to impose government on every corner of American life. But the real problem is that he’s so indistinct no one across the entire political spectrum knows who he is. A chief executive who repeatedly presents himself as a conciliator, forever searching for the “good side” of all adversaries and convening summits, in the end comes across as weightless, if not AWOL. A Rorschach test may make for a fine presidential candidate — when everyone projects their hopes on the guy. But it doesn’t work in the Oval Office: These days everyone is projecting their fears on Obama instead.

The Times' Paul Krugman wrote today that Obama should call the Republicans' bluff, that if "G.O.P. intransigence means that taxes rise at the end of this month, so be it":

If Democrats give in to the blackmailers now, they’ll just face more demands in the future. As long as Republicans believe that Mr. Obama will do anything to avoid short-term pain, they’ll have every incentive to keep taking hostages. If the president will endanger America’s fiscal future to avoid a tax increase, what will he give to avoid a government shutdown?

So Mr. Obama should draw a line in the sand, right here, right now. If Republicans hold out, and taxes go up, he should tell the nation the truth, and denounce the blackmail attempt for what it is.

Yes, letting taxes go up would be politically risky. But giving in would be risky, too — especially for a president whom voters are starting to write off as a man too timid to take a stand. Now is the time for him to prove them wrong.

And Robert Kuttner, writing in Huffington Post, is more scathing of the president.  Kuttner says the problem is not with Obama's advisers.  "It is the man who appointed them," wrote Kuttner, "and his failure to know how to fight and lead as a progressive":

Let's stop pretending. Barack Obama is a disaster as a crisis president. He has taken an economic collapse that was the result of Republican ideology and Republican policies, and made it the Democrats' fault. And the more that he is pummeled, the more he bends over.