Extending tax cuts for families earning more than $250,000 is wasteful. Creating an estate-tax exemption of $5 million for individuals and $10 million for couples is higher than necessary to preserve family businesses. And a $900 billion package of tax cuts and extended unemployment benefits is too expensive for a government in which both parties claim to be moving toward a more balanced budget.
But the deal with Republicans announced by President Obama yesterday is clearly preferable to no action, which is what would happen if Democrats simply held firm and Republicans continued to filibuster any new bills. In that case, taxes would automatically rise for everyone in January and unemployment benefits would cease for two million needy people. These issues cannot go unresolved, and there is no scenario currently visible that would end the impasse before Christmas.
Liberal opponents of the deal can envision a defiant Obama barnstorming the country — demanding that the rich be denied renewed tax cuts, that the START treaty be ratified immediately as a matter of national security, and that unemployment benefits be revived as a moral right for good people whose only alternative is destitution.
That’s the kind of advocacy many liberals thought they were getting on that surprisingly balmy November meet-up in Chicago’s Grant Park, when Mother Nature herself seemed to be promising better days ahead. But then came the filibusters, and the realization that Obama was not, in fact, particularly adept at galvanizing public opinion behind his policies.
At this moment, in a lame-duck, holiday-season session of Congress, it would be unrealistic to expect even someone with the persuasive powers of Ronald Reagan or Joan of Arc to rally the public sufficiently to get Senate Republicans to give up their filibuster. Thus, Obama’s choice is either to stand on principle or to accept something less than what he wants. He has sensibly chosen the latter option.
As Obama acknowledged yesterday, a two-year extension of tax cuts for the rich merely freezes the issue until the next campaign; both sides can take their case to the voters. Meanwhile, the one-year, 2-percent cut in payroll taxes added to the deal would help middle-class families right away.
If given a choice between a Washington showdown that prevents all action until the next Congress, and a half-a-loaf compromise with some clear benefits, most Americans would choose the latter. Obama has rightly stated that the outcome of the 2010 election reflected a desire for more compromise and less partisan gridlock. In dealing with the Republican leadership, Obama is acting in the national interest, if not necessarily pleasing his party’s faithful.