Have Republicans thrown President Barack Obama into the briar patch? Have they done just what he wanted them to do — make it possible to give the economy the stimulus it would not get in the new, deficit-preoccupied Congress?
He’s been called a poor poker player and a sellout. One cartoon has the president saying, “I fold” — even before the cards are dealt.
But he may have played a bad hand well enough to win a kind of stealth stimulus package. If the economy gets some traction as a result, it could dramatically improve his chances of winning a second term.
The Obama-GOP tax package is moving through the lame duck Congress like a legislative Christmas tree. It allows the rich to keep lower taxes, but it’s laden with tax concessions to the poor and middle class. In that regard alone it’s a stunning accomplishment.
How long has it been since both the poor and the shrinking middle class got a break? It’s usually the One Percenters — that one percent of the population that holds something like 25 percent of the nation’s wealth — who surge further ahead when taxes are “reformed.”
Not déjà vu after all
It looked like that was happening again.
But maybe he was getting out of the game before his opponents realized what they’d done.
Yes, the Bush era tax breaks remained. That fact earned most of the headlines — as well as the scorn of liberal and progressive critics, who seem to get some perverse pleasure in thinking of Obama as a sellout.
Not what we voted for, they’re saying. No hope, no change, no audacity. It’s a dangerous all-or- nothing approach which he has managed to reject.
It’s passed the Senate and headed for a vote in the House. The Great Compromise seems to be gaining momentum — and opponents in the tea party and the conservative commentariat. Washington Post columnist Charles Krauthammer called the bill a Trojan horse.
Trojan horse or not, the bill does appear to be much better than many thought.
It protects millions of wage earners from the Alternative Minimum Tax, which might have affected couples with income up to $72,500 at a cost to the Treasury of $137 billion.
It cuts the Social Security tax from 6.2 percent to 4.2 percent on income up to $106.800. In the case of two wage earners who make the maximum $106,800, the tax savings will be $4,272.
Was the GOP bluffing?
To be sure there are doubters as well.
Former New York Times reporter David Cay Johnston, author of “Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense and Stick You With the Bill,” says 45 million Americans will see their taxes go up as a result of the deal.
This is so, he says, because a “make work pay” program goes away as a result of the deal. It’s the kind of tax code complexity that makes overall reform urgent.
Taken together, though, the compromise bill may be as good an economic stimulus as the nation was going to get with so many newly elected deficit hawks circling the Capitol — whether they’re really serious or not. (How serious could they be? Why haven’t these Republicans and Democrats screamed bloody murder about such a costly give-away to the rich?)
President Obama may have ended up having it both ways here politically: Everyone knows he hated to cave on allowing the break for earners in the over-$250,000 category. He did it to get the other concessions, which include continuing unemployment compensation for another 13 months.
The president says he compromised because many Americans might have gotten nothing in their stocking this Christmas. He says he couldn’t bring himself to gamble with the GOP to make a point. What it they weren’t bluffing? What if they were willing to let the rest of us eat cake?
The GOP was holding the people hostage, he said — an undeniable fact. It was an outrage — too quickly written off as just Washington or just politics. It was a crass and unvarnished bit of muscle flexing done, apparently, to illustrate the shift in power.
C. Fraser Smith is senior news analyst for WYPR-FM. His column appears Fridays in The Daily Record. His e-mail address is [email protected]