Obama’s Tax Deal: A GOOD Deal

Like so many other progressives, I’ve been pretty politically-existentially angsty about the recent tax cut deal President Obama struck with the hostage takers Republicans. However, after listening to his press conference yesterday and learning more about it, I’ve come to realize that, not only did he really have no choice but to cut a deal, the deal he got is pretty damn good for Democrats.

First off, have a look at what’s in the deal (fact sheet HERE):

  • Working families will not lose their tax cut. A typical working family faced a tax increase of over $3,000 on January 1st. The framework agreement includes a mutually agreed upon solution to the impasse over taxes by extending the 2001/2003 income tax rates for two years and reforming the AMT to ensure that an additional 21 million households will not be hit with a tax increase.
  • $56 billion for unemployment insurance extension. According to the Council of Economic Advisers, passing this provision will create 600,000 jobs in 2011 alone.
  • $120 billion payroll tax cut for working families
  • $40 billion in tax cuts for our hardest hit families and students
  • 100% expensing for businesses next year
  • Child Tax Credit: The $1,000 child tax credit will be extended for two years with the $3,000 refundability threshold established in the Recovery Act. This extension will ensure an ongoing tax cut to 10.5 million lower income families with 18 million children.
  • Earned Income Tax Credit: The Recovery Act included an expansion of the EITC worth, on average, $600 in additional assistance to families with 3 or more children. It also helped working married families by reducing the marriage penalty in the EITC. Continuing this tax cut for two years will benefit 6.5 million working parents with 15 million children.
  • American Opportunity Tax Credit: The Recovery Act included a new, partially refundable tax credit of up to $2,500 to help students and their families cover the cost of college tuition. This deal fully extends AOTC for two years, ensuring that more than 8 million students will continue to receive this tax benefit to help them afford college.
  • A 2-year extension of the R&D tax credit and other tax incentives to support business expansion.

Here’s another way to look at it from CNN Money article (H/T LousyDeemo):

While these figures are estimates, that little red ball there? That’s what the Republicans wanted. See all those bigger blue balls? That’s pretty much what Democrats wanted.

Turns out President Obama and his administration weren’t such lousy negotiators afterall.

Finally, Andrew Sullivan has a remarkable essay up about this called Obama: President; McConnell: Sucker.

It’s been fascinating to watch the left’s emotional roller-coaster these past few weeks. It’s also been fascinating to watch Obama out-run them, and to observe their responses to the final deal in the last 24 hours. Krugman has gone from “Let’s Not Make A Deal” to “better than what I expected.” The response from the far-right has also been illuminating. Drudge rushed to declare Obama’s payroll tax cut as a Republican idea. Hinderaker below insists “Obama has admitted that the Republicans were right all along.” Notice something about all of this? They all now realize that Obama has been a little shrewder than they took him to be.

~SNIP~

[N]otice that Obama has secured – with Republican backing – a big new stimulus that will almost certainly goose growth and lower unemployment as he moves toward re-election. If growth accelerates, none of the current political jockeying and Halperin-style hyper-ventilation will matter. Obama will benefit – thanks, in part, to Republican dogma. So here’s something the liberal base can chew on if they need some grist: how cool is it that Mitch McConnell just made Barack Obama’s re-election more likely? Bet you didn’t see that one coming, did you?

~SNIP~

This is the difference between tactics and strategy. The GOP has won again on tactics, but keeps losing on strategy. More broadly, as this sinks in, Obama’s ownership of this deal will help restore the sense that he is in command of events, and has shifted to the center (even though he is steadily advancing center-left goals). It’s already being touted as “triangulation” by some on the right even as it contains major liberal faves – unemployment insurance for another 13 months, EITC expansion, college tax credits, and a pay-roll tax cut.

For all the teeth-gnashing and garment rending going on in the liberal blogosphere at the moment, I think when the dust settles, people, even far left liberals, are going to end up liking this deal a whole lot more than they realized.

Also, too, anyone that’s paying attention and/or being honest knows damn well that “fighting harder” would not have changed a damn thing. He doesn’t have now and never has had the now-required 60 votes in the Senate so let’s not kid ourselves here. As wizardkitten points out over at Blogging for Michigan, some GOPosaurs are now even reconsidering their support of this deal because it will, get this, hand a victory to President Obama:

[L]iberals won’t be the only hard sells, reports Grand Rapids’ boots on the ground in Washington. U.S. Rep. Vern Ehlers says he expects some in his own Republican caucus to oppose the deal because it would allow the Democrats to claim an accomplishment in lame duck.

Utter lolz. Anyone out there still think that Obama could have bullypulpitted the GOPosaurs into voting for everything Democrats wanted? Fat chance.

UPDATE: Here’s some great video from last night’s edition of The Last Word with Lawrence O’Donnell where he and Ezra Klein handle themselves with aplomb and FACTS:

I’m just sayin’…

P.S. For all you taking a stand by leaving Organizing for America (OFA)? That’s fine. I suspect the vast majority of you weren’t doing any volunteer work for them anyway or you’d realize what a valuable arm of the Democratic Party they are and will continue to be after President Obama becomes former-President Obama. But, seriously, go find another progressive group to work with. DFA. PDA, MoveOn. They are all worthy and, at the end of the day, we’re all working to promote Democrats. And remember: being on a mailing list is not the same thing as knocking on doors and making calls. Activism means doing something. So DO SOMETHING!!!

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