President Obama’s Tax Compromise Passed by Congress

President Obama and Republican Leaders

On Thursday, the unthinkable (to many progressives) happened: Congress passed the tax cuts, a compromise deal which includes an $801 billion package of tax cuts and $57 billion for extended unemployment benefits. The bill will extend the Bush tax cuts for two years (all of the tax cuts) and provide for a one-year payroll tax cut for most American workers.The extends for two years all of the Bush-era tax rates and provides a one-year payroll tax cut for most American workers.

As FOX News relates,

Workers’ Social Security taxes would be cut by nearly a third, going from 6.2 percent to 4.2 percent, for 2011. A worker making $50,000 in wages would save $1,000; one making $100,000 would save $2,000.

Many progressives see this as a betrayal. The Republicans, rightly or wrongly, have been accused of holding unemployment benefits and taxes for the Middle Class hostage in exchange for helping out their rich friends. The Speaker of the House, Nancy Pelosi, for example, leveled the accusation that Democrats were forced “to pay a king’s ransom in order to help the middle class.” Representative Jim McDermott (D-WA) said it was “craziness” and Rep. Peter Welch (D-VT) said “This legislation creates too few jobs and too much debt.”

The final vote?  277 to 14 with nearly identical numbers of Republicans and Democrats voting “aye”: 139 Democrats and 138 Republicans. The Senate had previously approved the package 81 to 19 on Wednesday.

There was an attempt to change an estate-tax provision in the bill (one that Obama had previously agreed to in his negotiations with the Republicans) but even after that failed, 139 Democrats voted for it as opposed to 112 against.

Two years, of course, will bring us right to 2012, when the future of the tax cuts will become more important than ever in the midst of a presidential election. This is not the last we will hear of the matter by any means. Some Republicans would like to see the tax cuts made permanent. Since tax cuts for the rich demonstrably do not create jobs, this position will be a tough sell for Republicans, particularly if the groundswell of opposition swings the other way at the end of the next two years, and it is the Republicans who find themselves under attack for perceived failings.

It is obvious to many people that the economic stability of our nation is at stake and that this deal is not going to fix those problems. It is no more than a finger in the dyke.

For now, the New York Times reports that administration officials say President Obama will sign the bill into law today.

This moment marks both a way forward and signals a lack of progress. Cooperation and compromise are essential facets of government in a modern liberal Democracy like ours and the willingness of Republicans to compromise at last should take center stage over what is seen as President Obama’s capitulation to Republican demands. The President has governed as a centrist and he did what a responsible president would do. Rather than stand on principle and make people suffer, he made a deal.

Rather like the framers of the Constitution back in 1787, none of whom got everything out of that deal they wanted and the New York Times tells us “The White House and Republicans hailed the deal as a rare bipartisan achievement and a prototype for future hard-bargained compromises in the new era of divided government.”

FOX News called it “a remarkable show of bipartisanship.” Rep. Ginny Brown-Waite (R-FL), called it “a bipartisan moment of clarity.”

And so it is.

Progressives, like their Republican opponents, seem of late to have forgotten that lesson. To stand on ideological purity and refuse compromise while the country crumbles around you is not an admirable thing, however they frame it. Government needs to continue to govern. In a sense, a politician hasn’t the luxury of principles, and that includes the president.

Ideological purity is for dictatorships.

For the first time in two years we have seen government function as it should. And if nobody got everything they wanted out of it, so be it. That’s how it works. That is how it has always worked. Sometimes one side gets more, sometimes the other. As House Majority Leader Steny Hoyer (D-MD) said, “There probably is nobody on this floor who likes this bill. The judgment is, is it better than doing nothing? Some of the business groups believe it will help. I hope they’re right.”

In this case, most Republican opposition centered around the creation of additional federal debt, but most of them voted for it anyway. Of course, Republicans did not get everything they wanted either.

Political reality suddenly meant something again to the arrogant GOP, as Eric Cantor (R-VA) was forced to remind his colleagues:

“We could try to hold out an pass a different tax bill, but there is no reason to believe the Senate would pass it or the president would sign it if this fight spills into next year.”

It remains to be seen if Democrats and Republicans can find other ways to work together, other areas in which compromise is a possibility, such as repeal of DADT and the DREAM Act, an amnesty program for illegal aliens who came to the United States as minors. There are things the Republicans will want and things the Democrats will want and the current balance of power does not grant to either the ability to pass that legislation without regard for the opinions of the other.

If anything at all is to get done for the next two years, this will not be the only compromise. In the end, both the achievement of bipartisanship in the face of ideological purity and the continuing problems (and its root causes) must be underscored. Fingers in dykes won’t make the flood on the other side of the wall go away. That deluge remains, waiting to sweep us all away. The question is, can our two major political parties stop their bickering long enough to fix it?

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