Obama Wimps Out with Possible Bush Tax Cut Compromise

The president is ready to compromise on the Bush tax cuts and extend them for the rich. Eric Alterman wonders why Obama can’t manage to defend a campaign position that’s both popular and fiscally sound.

It’s happening again. Barack Obama is punching the Republicans in the fist with his face. Almost in spite of themselves, Democrats won the public-opinion battle over extending the Bush tax cuts for Americans making a quarter of a million a year or more with strong majorities supporting their position. They did not have the nerve to hold this vote before the election, and now the nervous nellies appear to be getting ready to throw in the towel (or at least most of it). President Obama, on the other hand, ran for office on a pledge to extend the existing tax rates for families making less than $250,000 a year, while letting the tax cuts for those making over that number expire. The number of Americans lucky enough to earn this kind of money constitutes barely more than 2 percent of the population, though one can imagine they provide a much more impressive proportion of the funds that go into financing election campaigns, whether directly or by stealth.

But with the tax cuts poised to expire Dec. 31, The Washington Post reports that “Obama has opened the door to a compromise with Republicans, signaling a new willingness to accept tax breaks for the wealthy.” He is doing this, meanwhile, as the Republicans continue to stand united against the extension of unemployment benefits for Americans making not $250,000 a year, but nothing.

Put the words “Obama” and “compromise” into a Google search and the result is, I’m not kidding, almost 9 million hits. Why is this? White House senior adviser David Axelrod told The Huffington Post that “we have to deal with the world as we find it.” And from where and whence did this “world” arrive? The Post reports, “In the days after the election, that cold reality appeared to have overtaken the harsh rhetoric of the campaign trail. A consensus was quietly emerging on taxes, with key lawmakers and senior aides saying both parties were preparing to accept a temporary extension of all the cuts to defuse a brutal, drawn-out fight.”

Whenever I see a sentence in the passive tense, I know a reporter is trying to hide something. This “cold reality” and “consensus” that emerged as if by magic—what’s up with them? Nobody will say. It appears to this reader, however, that the Republicans stood united by their unpopular original support of the Bush tax cuts, which will likely bust the budget, costing $700 billion over the next decade, while the Democrats do not even know how to defend a popular position that is both fiscally sound and democratically responsive. Instead of his clear, popular campaign position, Obama is now ready to extend the tax cuts for the rich for two or three years “but he does not want to play a game of legislative chicken that risks letting all the cuts expire,” according to the Post. Since the Republicans are happy to play chicken with the economy, however, they will win, as they have done in almost every fight they’ve had with Obama, despite his having had (and lost) at least a semblance of veto-proof Democratic minority.

Put the words “Obama” and “compromise” into a Google search and the result is, I’m not kidding, almost 9 million hits.

Some Democrats have other ideas. Sen. Max Baucus (D-MT), chairman of the tax-writing Finance Committee, wants an up or down vote just on tax cuts for middle-class voters. Chuck Schumer, (D-NY), Wall Street’s favorite senator, is willing to raise the level at which the tax cuts stay in place from $250,000 to $1 million a year. Meanwhile, Sen. Mark Warner (D-VA) wants to let the cuts for the rich lapse and replace them with $65 billion worth of targeted tax cuts for business.

But Nancy Pelosi isn’t playing. The woman whom Democrats have allowed Republicans to demonize as just this side of Che Guevara is the only top Democrat who is still sticking with Obama’s crystal-clear campaign promise. She notes, “It’s too costly. It’s $700 billion. One year would be around $70 billion. That’s a lot of money to give a tax cut at the high end. And I remind you that those tax cuts have been in effect for a very long time, they did not create jobs.”

And AFL-CIO head Rich Trumka calls the Democrats’ willingness to play ball in the face of repeated Republican recalcitrance “absolutely insane.” Sounding like an old-fashioned blast from the past (of just two years ago), he insists, “We need to expose the rank hypocrisy of those calling for these millionaire tax cuts—which would add hundreds of billions to the deficit. These are the same elected officials who say we can’t afford to maintain benefits for the jobless—and should cut Social Security and Medicare for working families and seniors in the name of so-called deficit reduction.”

But these are the kind of people Obama has spent most of his presidency running away from—real Democrats who embraced the words of candidate Obama, rather than the guy who apparently thinks he did not work hard enough during the past two years to make nice to Republicans. Naturally, the lying commie/Nazi/Muslim/anti-Semitic, white-hating Indonesian blames himself.

If the richest among us have any gratitude, they will undoubtedly pour a portion of their likely tax cuts back into Republican fundraising efforts. If the past two years prove anything at all, there’s no better investment.

Eric Alterman is a Distinguished Professor of English and journalism at Brooklyn College, a senior fellow of the Center for American Progress and media columnist for The Nation. His newest book, Kabuki Democracy: The System vs. Barack Obama, is available for preorder.