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The Deal


I’m not prepared to make a sweeping judgment of the deal Obama worked out with Republicans over the fiscal slow incline. Obviously there’s some major problems with it. Higher taxes should probably start at less than $250,000 and certainly not $400,000. It only buys us 3 months before yet another round of absurdity over the debt ceiling (let’s hope something on immigration can get done before then. I’m skeptical since the Republicans are going to try and reject nearly every one of Obama’s cabinet nominations). On the other hand, rich people will pay more in taxes and cuts to social programs were avoided.

I do think though that Michael Cohen’s piece blaming the entire mess on Republican extremism makes sense.

Was it worth risking austerity policies that squeeze the middle class simply to lock in even higher tax revenues? Perhaps. People can certainly disagree, and personally, I’m not completely sold on my own rosy take. But when you’re dealing with House Republicans, who could have very easily passed a tax cut bill after going over the cliff that ignored EITC or unemployment insurance, or even set the tax threshold at $500,000 and dared Democrats in the Senate to block it, I find it very difficult to criticize the president too harshly.

In the end, Obama went with the bird-in-hand of a certain deal. Arguing that he could have gotten a better agreement had he held out sounds reasonable, but it ignores the potential obstacles in dealing with a political party that has no interest in the plight of working people or the responsibilities that come with running a large country.

And the consider this: about two weeks ago, the left was up in arms over the possibility of benefit cuts to social security and Medicare. None of that happened – the country’s social insurance programs will remain largely untouched. At least, for the time being.

In fact, when one looks at the likely deal that will resolve this latest fiscal crisis, it is only further evidence of the GOP’s utter hypocrisy on fiscal matters. Consider the major concessions the Republicans got from Obama: a less onerous change in estate taxes, which most directly affect the wealthiest Americans, and a tax break for those making between $250,000 and $400,000.

That’s right: we fought this entire battle so Republicans could make it harder for rich people to avoid paying more of their fair share in taxes.

A party that has made deficit reduction its clarion call, and in particular, reducing the size of government spending, appears to have received virtually nothing in the way of major spending cuts in this deal or deficit reduction for that matter. When push came to shove, reducing tax burdens was all that mattered to the GOP.

Of course, this result is neither startling nor unexpected, at least to those who have paid close attention to the Republican party over the last four years. It is ironic that on the 150th anniversary of Lincoln’s emancipation proclamation, a party that was formed by courageous slavery abolitionists has become, 150 years later, a party that is courageously fighting to ensure that wealthy Americans do not pay one penny more in taxes.

Like Cohen, it’s really hard for me to have a rosy view of the American future so long as one party (either really) takes a position that it will completely shut down the country for political purposes. I don’t know how this ends either, not with the science of redistricting ensuring Republican control in many states they receive the minority of votes, the very real possibility of Republican-led states changing election laws to split up their electoral votes before 2016, and an increasingly radical agenda. In the longer term, I feel better knowing that people of my generation and younger are beginning to play a larger role in politics. I may well be too optimistic here.

Krugman notes:

So why the bad taste in progressives’ mouths? It has less to do with where Obama ended up than with how he got there. He kept drawing lines in the sand, then erasing them and retreating to a new position. And his evident desire to have a deal before hitting the essentially innocuous fiscal cliff bodes very badly for the confrontation looming in a few weeks over the debt ceiling.

If Obama stands his ground in that confrontation, this deal won’t look bad in retrospect. If he doesn’t, yesterday will be seen as the day he began throwing away his presidency and the hopes of everyone who supported him.

Of course, I had no hope for Obama when I voted for him and I’m not sure why anyone would. We all knew what Obama was by November 2012 and there’s no reason to think what we don’t like about him will change. Voting is not a morality tale–it’s a choice of who is less evil. That choice was clear. I’m not at all confident over his behavior in the debt ceiling. But at the very least, this bill does raise more revenue and taxes the rich more fairly without cutting social services. From a short-term view then, I guess this leans more toward a win. But short-term views aren’t the most valuable and real judgment should be withheld until the debt ceiling it resolved.

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