JONATHAN COHN DECEMBER 13, 2010
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Mulling Obama’s tax deal with the Republicans, and the circumstances that led to it, I keep coming back to that very telling moment in last week’s presidential press conference—the part where Obama responded to liberal critics angry at him for giving so much ground.
The essential problem with liberal critics, Obama suggested, was that they were “purists” more interested in symbolism than progress—that, in effect, they were letting the perfect be the enemy of the good. It was, Obama continued, the same thing he’d seen and heard during the health care reform debate, when critics on the left became ambivalent about or downright hostile to the Affordable Care Act because it didn’t have a public insurance option.
That analogy to health care resonated with me; as readers of this space know, I’ve made that very same point many, many times. I’m a strong proponent of the public option and continue to believe that reform with a public option would be much better than reform without it. But I also think the Affordable Care Act, as written, will do a lot of good. That’s why I think it’s worth supporting—and why, like Obama, I think it will go down as a great historical victory alongside the creation of Social Security and Medicare.
But I don’t think it’s fair to make the same argument about the tax deal.
The Affordable Care Act was part of a campaign liberals have been promoting for nearly a century—the campaign to make sure every American has access to medical care without fear of financial ruin. And while the Act won’t, by itself, achieve that goal, it goes a long way to doing so and, no less important, puts in place an institutional framework that will make that achievement possible. At the same time, the Act also develops the tools our society can use, in the coming years, to make health care more efficient—something we desperately need to do in order to keep public and private finances under control.
Can we say anything like that about the tax deal? I don’t think so. The tax deal will help boost the economy in the next year or two. That’s no minor thing, given the economic struggles so many Americans face. But it's also a temporary change. If we’re lucky, the time Obama has bought with this temporary extension will allow him to do in two years what he couldn’t do now—and end the upper income tax cuts once and for all. That’s also no minor thing, given how big those tax cuts are and the impact that will have on our fiscal future. But that outcome is also very speculative—a lot more speculative, I would argue, than the argument that the Affordable Care Act will improve people’s lives.
To be clear, I take seriously the suggestion, from administration officials, that there was no way to win this tax fight even back in the summer. I also think the terms of the deal are as good as this Congress was likely to approve in this political environment. Like Robert Greenstein, of the Center on Budget and Policy Priorities, I’d like to see the measure pass (although I’d hardly object if liberal Democrats used whatever bargaining leverage they have to extract better terms). But I also think the critics of the tax deal have much stronger case than the critics of the Affordable Care Act did.
9 comments
I'm not sure what world liberal purists live in where they think that Obama should be able to magically give them everything they want. I have a friend who constantly complains about how Obama is horrible because he didn't get a public option and extended tax cuts for the rich. Am I the only one that realizes that you can't just mow over Republicans who are united in their goal of obstructionism? Where do you think Obama would be politcially right now if he were to let all the tax cuts expire this year? In my opinion, the people have made their decision by overwhelmingly going Republican so if they didn't want tax cuts for the rich they should have considered that when they voted. Are tax cuts for the rich a bitter pill to swallow? Sure they are, but it's a pill the people asked for. People need to stop blaming Obama when they are the very ones helping to create an environment where he can't anything done. There are no easy answers and everyone who wants to whine about Obama's performance needs to gain a better understanding of the political climate. I mean, we are in times where a black president has been elected but also where Dinesh D'Souza can categorize 'Obama's rage' as Kenyan Anti-Colonialism and nobody on the right says a word to dispute it (while the crazies, as usual, support it). I do want to add that I don't think Obama is perfect or anything. I do assign some blame to Obama for a lot of the horrible things happening with foreign policy, but that is a whole other story.
- tgatz85
December 13, 2010 at 12:13pm
TG, we just want him to give some kind of fight to the GOP, not slap down his own side while letting the GOP slide. If you listened to BO's interview last week on NPR's "Morning Edition" you'd understand what I mean. Jon Cohn, what do you make of the Richmond court ruling today?: http://www.huffingtonpost.com/2010/12/13/health-care-lawsuit-ruling_n_795807.html
- tnmats
December 13, 2010 at 12:29pm
"[T]here was no way to win this tax fight even back in the summer". If you believe that, you must believe either (a) the public could not have been able to distinguish between a tax policy that benefits most every Americian and a tax policy that benefits only a few, or (b) the Democrats (and Obama) are incompetent to explain the difference between the two. Of course, the Democrats and Obama never offered their own tax policy, so we will never know. For the cynics among us, there is a third alternative: the Democrats (and Obama) didn't want to take the risk that their own tax policy might be adopted. See Orszag.
- rayward
December 13, 2010 at 12:39pm
tnmats, yeah, that I can see. I understand democrats wanting him to fight. It is aboslutely true that Obama could have done a MUCH better job of controlling the tone of these discussions even if the outcome was largely out of his control.
- tgatz85
December 13, 2010 at 12:57pm
TG, it's not the outcomes purely, it's the seeming capitulation before the fight starts.
- tnmats
December 13, 2010 at 1:14pm
Cohn is right on the substance of the "public option" question. Or, as Krauthammer put it, by turning health insurers into public utilities Obama's "compromise" put us on track for eventual single payer and calmed the fears of moderates simultaneously. In my view the tax deal is more important than Cohn seems to think. Obama is playing this very well. Big short-term gains for the most truly needy of traditional Democrat voters by means of a stimulus unthinkable without giving Republicans something they promised their voters; the removal of the curse of going into 2012 with a worse economy and the flashing neon label of "Big Government Tax Raiser"; and the realistic prospects of making the current hysteria over 4.5% of the top rate irrelevant with a practically and politically more effective tax reform package, ideally linked to an entitlements reform package that together would quiet long-term structural debt concerns. Obama is going for all the marbles: a successful two-term Presidency that leaves the country significantly better off than he found it when he took office. Democrats who aren't supporting their President now are the modern day equivalent of Lenin's Useful Idiots for the Republicans.
- Robert Powell
December 13, 2010 at 1:52pm
Health care at least made sense. Where is the common sense in all this? To help the economy, we're lightening taxes paid on death? The large business cash reserves frozen by uncertainty over consumer demand will be mobilized by keeping top tax rates low, after such low top rates have done nothing in that regard so far? When will we pay for all this stupidity?
- Nusholtz
December 13, 2010 at 5:00pm
"I take seriously the suggestion, from administration officials, that there was no way to win this tax fight even back in the summer." Nonsense. Just ask John Boehner whether there was a way to win this tax fight. For the umpteenth time here's how it could and should have played out: After kibbitzing with the Democratic Congressional caucus, Obama makes a big speech announcing that the Bush cuts are dead. All of them. They will be allowed to expire on schedule. But wait! We've got a new and improved tax cut plan, one that lowers rates on the vast majority of tax payers even further in exchange for raising rates on the wealthy. Then dare the Senate Republicans to block it. Get on prime time tv twice a week if necessary to point out that a minority of Senators who make tax cuts THE central tennet of their governing philosophy are blocking all business of the Senate in order to stop a tax cut on 98% of the population in order to secure "welfare for the rich." As for the unemployment extension, demagogue the hell out of the GOP on that too. "The Republican MINORITY in the Senate is holding unemployment relief for millions of out-of-work Americans hostage, demanding a ransom payment in tax cuts for rich people who don't need the money and won't spend it to fire up our economy even if they get it. Whose side are the Republicans on? Are they on the side of hardworking Americans or of the rich few?" Are you still gonna tell me that the Republicans wouldn't have folded under that kind of pressure? Sure, I might be wrong. The future is never certain. But as they say in the casinos, you can't win if you don't play. Obama was down 3 points in the final seconds of a football game, 4th down on the other team's one yard line. All he had to do was dive over the defensive line. Instead he went for the field goal to take the game into overtime. The only thing that made such tactics infeasible is that they would have required Obama to abandon his post-partisan fantasy. That he appears unwilling to do.
- AaronW
December 13, 2010 at 6:38pm
"Sure I might be wrong. The future is never certain." Right. It's possible that Obama could have gotten a marginally better deal in the way you describe, but neither one of us knows the details of either sides' negotiations, much less how this would have actually played out. A scenario at least as plausible as yours is that Obama rolls the dice, proposes new, genuinely budget-busting tax cuts for the middle class (where all the money actually is anyway) in exchange for the confiscatory rates on "the rich" that would be required to avoid an immediate full-scale collapse of confidence in the bond markets. Republicans elect to fight it out on grounds of economic realism, with justification. Rather than stimulating the economy this kind of bungling would more likely stall the weak recovery, and quite likely send us back into recession. It could well cause a disaster in the bond market anyway. Obama limps into the 2012 campaign with the label of a Big Government Tax Raiser who completely bungled the economy, Sarah Palin rides into the White House, and Democrats are consigned to the political wilderness for a generation. Give it up Aaron. The latest Wapo/Gallup poll shows about 7 in 10 Americans support this deal. Christ, it has support among Democrats at 68%, and among those describing themselves as "liberals" at 65%! The Looney Left in Congress is totally isolated on this, while Obama bids fair to use this deal as a springboard to re-election if he can continue to work with Congressional Republicans to put our fiscal house in order. It's grownup time in Washington.
- Robert Powell
December 14, 2010 at 4:16am