"The tax bill is not the savior of the Obama presidency. It could be the beginning of its end"

[Better Believe It]

The Political Fights the President Chooses
by Laurence Lewis
December 19, 2010


This bill is not the saviour of the Obama presidency. It could be the beginning of its end. From the day of the inauguration, if any single bill was going to have the greatest impact on the success or failure of the Obama presidency, it was going to come early and it was going to be on the economy. Not this bill. The stimulus bill. The president's first opportunity to do something about the disaster he inherited from Bush and Reagan and Milton Friedman. That was when he should have used every means at his disposal to enact what would come to define his first, and possibly only, term in office. He was enormously popular. His predecessor was enormously unpopular. People were scared. They knew something fundamental was broken. They were ready for transformational change. They believed in change. They had the audacity of hope.

The polls show support for the Obama tax package, but however much the bill's supporters tout them, the polls aren't really relevant. The polls show that a lot more people want to get rid of the top bracket tax cuts than want the package that includes them. Did the president try to make the case that the future of his presidency depends on passing the middle-class tax cuts without the high-end cuts? Did he try to make the case that his presidency depends on extending unemployment benefits by themselves, decoupled from tax cuts, as they should be? Did he tell Congressional leaders to remain in session as long as it takes to get middle-class tax cuts and unemployment benefits, and that if the middle class, the poor, and the unemployed don't get to enjoy their holidays neither should Congress? Would the public have rallied behind a president taking such a stand? We will never know. The president picks his fights. His more ardent defenders cannot credibly claim that it isn't his job to push legislation. He didn't fight for a public option, but he did fight for the final health insurance bill. He didn't fight for the stimulus we needed, but he is fighting for a bill that could spell the political doom of both him and his party.

There is so much wrong with the Obama tax plan that perhaps the worst single aspect is not getting the attention it deserves. The corporatist media dutifully pay little attention to it, and the polls therefore reflect little public awareness of it. And it's only a political paradigm shift of such magnitude as potentially to change the very nature of the Democratic Party.

Filling the gap from the general fund is a temporary fix, but with the president himself buying into deficit worries, even as the economy screams for more robust Keynesian stimulus, and with a Republican House less than a month away, we all know that the temporary fix, unlike the tax cuts themselves, will in fact be temporary. So, the Obama tax plan carves a hole in Social Security funding, and with the president's Catfood Commission already having recommended cuts in benefits, the way this plays out is obvious. The president didn't fight the Republicans when he had a Democratic Congress, so it's not realistic or pragmatic to expect him to fight them when they control the House. And by passing the Obama tax plan, the majority of Congressional Democrats have joined him in what may turn out to be the beginning of the end of the New Deal. And a very credible Congressman says the president was on the phone to House Democrats telling them that his presidency depended on the bill's passage. The president may have been right. But not the way he thought. Because much more than his presidency is on the line and under open political assault; and in an unprecedented move, he and Congressional Democrats have just ceded them critical ground.

Read the full article at:

http://www.dailykos.com/storyonly/2010/12/19/929674/-The-political-fights-the-president-chooses


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Tax Cut Deal A Hidden Threat To Social Security
By Ryan Grim
December 8, 2010

The tax cut deal that President Obama struck with congressional Republicans contains a provision that could ultimately be the undoing of Social Security, say Senate Democrats and backers of the old-age and disability program.

Obama, as part of the Democratic package, secured a roughly 30 percent cut in the payroll tax, from 6.2 to 4.2 percent. Allowing it to expire in a year will mean that workers will see a nearly 50 percent jump in payroll taxes as the rate reverts back -- an event that will surely be described as a tax hike. The cut is estimated to cost $120 billion per year.

Republicans acknowledged that the expiration of the tax holiday will be treated as a tax increase. "Once something like this goes into place, a year from now, when it expires, it'll be portrayed as a tax increase," said Sen. Bob Corker (R-Tenn.). So in a body like Congress, precedents matter and this is setting a precedent. I think that certainly is going to create some problems down the road if it passes."

Given that Congress, under Democratic control, can't gather itself to let tax cuts for the wealthiest Americans expire, members of both parties are convinced that letting the payroll tax rate revert back to its current spot will be near impossible.

Read the full article at:

http://www.huffingtonpost.com/2010/12/08/tax-cut-deal-a-hidden-thr_n_793983.html