Tuesday, December 7, 2010

More on Tax Cuts

Lots of Keith Olbermann on the blog tonight, with three video segments from his MSNBC show Countdown. The first is a special report from Monday night's show, in which guest host Sam Seder examines just where the money America borrows to pay for these tax cuts comes from. Borrowing money from foreign countries -- possibly even nations unfriendly to us -- just so the wealthy can have their precious tax cuts.

And the government doesn't say shit about it.

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The second video is an interview Olbermann did Tuesday night with my Congressman, Rep. Bobby Scott (D-Va. 3rd). As far back as I can recall, this is the first time Rep. Scott has been interviewed on a national stage, and he continued his argument against extending any of the Bush-era tax rates; as unpopular as that move would be, its effect in shrinking the deficit cannot be argued.

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The last video is a Special Comment from Olbermann, in which he takes the Obama administration to task not just for the compromise deal, but also with President Obama's condescending and angry response on Tuesday to liberal criticism. Decorum prevents me from truly revealing how I feel about the comments -- nothing like pissing off your base by telling them, essentially, to sit down and shut up -- so I'll let Olbermann articulate the anger for me.

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Tax Cuts Deal: Compromise or Caving?

With Monday's news that President Obama had reached a deal with Congressional Republicans that would temporarily extend the Bush-era tax rates, while also providing 13 more months of unemployment insurance and a few other benefits, much hand-wringing has occurred.

After all, letting the tax rates on the highest earners -- those who make more than $250,000 a year -- expire at the end of 2010 was one of President Obama's most popular campaign promises. It also had the side effect of lopping $700 billion off the deficit over the next 10 years; for all the talk in Washington over the deficit, letting the tax cuts expire -- at least on the wealthy -- was a pretty damn good way to start tackling the issue.

But Republicans, who are always quick to harp on the deficit (just ask those whose unemployment insurance ran out), didn't seem to care about that $700 billion. Apparently, we don't need to pay for tax cuts for the rich, but we do need to pay for helping keep unemployed people relatively afloat in a bad economy where jobs are scarce.

The GOP has two functions today: a) help the rich as much as possible, and b) make sure President Obama doesn't win anything. This deal, which some are calling a "compromise," accomplishes both goals.

There were those -- like Rep. Bobby Scott (D-Va. 3rd) -- who advocated for the expiration of all the Bush-era tax rates, which came with a $4 trillion price tag over the next decade. While that's true, and would certainly help the deficit ... that large an increase in taxes with the economy still in shambles would've been a political nightmare.

But letting the middle-class rates stay while raising the rates on the highest earners? That was a public opinion winner. But aside from a vote last week in the House on the issue, the whole thing was never really given much life -- because the GOP -- aided by Senate Minority Leader Mitch McConnell and Speaker-to-Be John Boehner decided they'd rather force their hand upon a president who seems none too willing to fight.

Look at the tax rate differences between the parties. See how massive that bottom circle would be under the Republican idea? Notice how all the rest of the tax rates look almost identical, but then the highest earners get the biggest cut? That's the tax world we've been living in since 2001 and 2003, and if this deal goes through, this is the reality that will continue.

Those tax cuts for the wealthy didn't create jobs over the last decade, and they won't create jobs now. The rich don't spend the extra money they get in tax cuts like middle class workers do; they sit on it and save it, which does nothing to boost the economy.

Also ... while the deal says the tax rates will expire again in two years, does anyone really expect that? Are we really supposed to believe President Obama will just let the tax rates revert back to Clinton-era levels while we're in the middle of the 2012 presidential campaign? He didn't want that fight now, with no election in sight and with the Democrats still in control of Congress; what makes you think he'll want that fight on the campaign trail with Republicans in control of the House of Representatives?

Tax cuts for the wealthy that aren't paid for, to go along with wars that aren't paid for. More money borrowed from China and who knows what other countries. President Obama had a chance to make good on one of his central campaign promises and work on the deficit at the same time, yet he punted on third down.

Compromise happens; more often than not, it's the name of the game in D.C. I get that. I'm also glad the unemployment insurance was extended for another 13 months, and the payroll tax credit will put more money in people's pockets immediately.

But the president waved the white flag and conceded before the fight even began. It's one thing to wage a fight and lose; sometimes that happens. But to not even force the issue, to start conceding before you even step into the ring?

This is not the fierce advocate who inspired so many on the campaign trail. This is not the man who seemed so vigorous in defending the middle class and making sure the American dream was still reachable. President Obama gave up far too soon and abandoned a core principle, which is perhaps the most unsettling part of all this.

Because as disenfranchised as liberals were in last month's elections -- between a bad economy and legislation that probably didn't go far enough -- imagine the disdain and the outrage now. Where do liberals go from here, and for that matter, where does President Obama go from here?

I have no idea, but if this is any indication, the next two years are going to be really long.