Tuesday, December 7, 2010

You’ve gotta know when to hold’em…

*** You’ve gotta know when to hold’em… :
As former Bush 43 Chief of Staff Andy Card once quipped, you never roll out a policy proposal in August because no one is paying attention. Similarly, you probably don’t pick a legislative fight to make a larger political point during the December holiday season. Last night, President Obama announced the framework of a compromise that would extend the Bush tax cuts for all income levels in exchange for a 13-month extension of jobless benefits, as well as a payroll-tax holiday. ”Sympathetic as I am to those who prefer a fight over compromise, as much as the political wisdom may dictate fighting over solving problems, it would be the wrong thing to do,” Obama said. “The American people didn’t send us here to wage symbolic battles or win symbolic victories.” There are plenty of ways to look at this -- pick your term – compromise/pragmatism/retreat/capitulation.

*** Know when to fold’em… :
The White House knew that they were holding a weak hand.
With all the tax cuts set to expire at the end of this month, and with Republicans set to control the House and have extra Senate seats in January, Dems could have picked a fight. But if that happened, it would have likely meant that tax rates would go up in this struggling economy, creating havoc on Wall Street and in biz community; that there would be almost no chance to pass New START and the repeal of “Don’t Ask, Don’t Tell” during the lame duck; and that there would be little chance of the next Congress being able to clear jobless benefits and even a payroll-tax holiday to stimulate the economy. You pick a political fight when the public is paying attention – and when you think you can win.

*** And know when to fight’em:
The other way to look at this is that the Obama White House just doesn’t know how to fight and play political hardball.

We recently heard this frustration from an advocate of comprehensive immigration reform, who wishes that the White House would fight on this issue to put Republicans in a box with Latino voters. "They just didn't want to play politics in the past two years,” this advocate said. “I hope they know that didn't work out for them." Make no mistake: Obama has to show some spine once John Boehner controls the gavel in the House. Maybe it comes in the State of the Union; maybe afterward. Yet we’ll re-raise our question from yesterday: For congressional Dems who want the president to fight on the Bush tax cuts, where were their spines during the spring and the summer, when THEY had a stronger hand to play? They were the ones who decided to punt on the issue until after the midterms. And question to progressive blogosphere: Why are you directing so much anger at the president when it's your congressional leaders who let you down?

*** What happens in 2012?
The spin we’re hearing from the White House is that they want to re-litigate the Bush tax cuts for the wealthy heading into the re-election in 2012.

If Obama wins re-election, they believe, that will serve as a mandate to get rid of those tax cuts once and for all. (However, critics will likely point out that Obama also got that mandate after 2008.) But imagine this: What if Obama used his State of the Union address to call for comprehensive tax-code overhaul -- like the deficit-reduction commission proposed -- to be implemented between now and 2012? That would end the Bush tax cuts and also serve as a realistic accomplishment that a Democratic White House and a GOP-controlled House could achieve. And speaking of deficit reduction, this whole deal adds approximately $1 trillion to the deficit -- $1 trillion that the GOP will now partly own. That has the potential to compel Republicans to become serious partners in deficit reduction for 2011-2012. Not to mix our poker-chess metaphors, but if the president is playing chess, then tax reform seems to be the most logical long-term policy fight to have, no?

*** Can the White House (and Biden) convince skeptical Dems?
But before we truly begin to map out how this deal might impact 2011 and 2012, it first has to pass. And congressional Dems aren’t yet sold. The Washington Post: “The agreement has yet to win the support of Democratic leaders in either chamber, and senior aides said the White House will need significant Republican support to push the package through Congress.” So enter Vice President Biden, who heads to Capitol Hill to attend the Senate Democratic Caucus lunch at 1:30 pm ET. One particular Democratic is the deal on the estate tax, which would impose a 35% tax on individuals’ estates worth more than $5 million. In fact, Obama addressed this in his statement yesterday. “The Republicans have asked for more generous treatment of the estate tax than I think is wise or warranted. But we have insisted that that will be temporary.”


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