What's at stake in tax-cut deal

[Norman Solomon]

Here's my article that was printed in the Marin IJ today...
-- Norman

What's at stake in tax-cut deal
By Norman Solomon

More than two weeks after President Barack Obama announced his decision to make a tax-cut deal with Republican leaders, the shock waves continue to buffet many Democrats and others who are stunned by the grim implications.

While the president used political muscle to push the measure through Congress, realization grew that the momentous impacts will span the realms of tax fairness, the social compact and American politics.

All year, the White House had maintained a solid case for insisting that extension of the Bush tax cuts should not reach top rungs of the economic ladder -- individuals with annual incomes above $200,000 and couples bringing in more than $250,000 a year.

But as the winter solstice neared, the president tossed that solid case overboard. And he gave lots of booty to the GOP on capital-gains taxation and the estate tax.

Noting the estate-tax sweetheart deal, House Speaker Nancy Pelosi pointed out: "We have a proposal before us that gives 6,600 families in America $25 billion and holds the rest of the provisions in the bill, (such as) low-income tax cuts, hostage to that blackmail."

In contrast to moldy stereotypes about wealthy Marin, strong belief in progressive taxation is widespread in the county.
The reasons include idealism and the understanding that it makes social sense for the rich to pay their fair share.

After all this time, trickle-down economics has little credibility outside of ideological claims that reducing taxes for the wealthy and corporations will create jobs.

Amy B. Dean, a former president of the South Bay AFL-CIO Labor Council, is correct when she calls such measures "handouts for the powerful given on blind faith."

Yet Washington is now bent on providing more of such handouts -- while corporate profits are at record highs, and huge income gaps between the rich and the rest of us are the widest in our lifetimes.

Less obvious is the grim fact that the cave-in on Bush tax cuts for the wealthy sets the stage for another pernicious agenda in the next two years -- undermining Social Security.

A former longtime BusinessWeek columnist, Robert Kuttner, has it right when he warns: "The deal that Obama made with the Republicans just gave deficit hawks new ammunition by increasing the projected deficit by nearly $900 billion over a decade. Social Security will be in the crosshairs."

The presidentially appointed deficit commission, Kuttner notes, has just laid out a "blueprint" that would do real harm to Social Security -- while the Obama-GOP tax deal "increases the deficit, adding to the artificial hysteria that Social Security is going broke."

I revere the New Deal legacy that gave our country Social Security and other key aspects of the social compact. President Franklin D. Roosevelt fought for economic fairness. Before the end of his first term, FDR denounced "the economic royalists." He said: "They are unanimous in their hate for me -- and I welcome their hatred."

He did not say, "They hate me -- and I want them to like me."

But now, the bleak truth is painfully real in a comment from the California Democratic Party's chairman John Burton:

"What some might call ... a 'deal' or 'compromise,' I would call capitulation to the Republicans."
Tax fairness and Social Security are at stake.

________________________________

West Marin author Norman Solomon is national co-chairman of the Healthcare Not Warfare campaign, launched by Progressive Democrats of America.

[Barry]

..A former longtime BusinessWeek columnist, Robert Kuttner, has it right when he warns: "The deal that Obama made with the Republicans just gave deficit hawks new ammunition by increasing the projected deficit by nearly $900 billion over a decade. Social Security will be in the crosshairs."...
This bit is what gets me: is that after all the Republican whining about the deficit they go and insist on going deficit even further. And what gets me even more is that the Democrats are not crying CONSTANTLY FROM EVERY ROOFTOP that the Republicans don't care about the deficit (just like Cheney said) and they are the "Borrow for tax cuts and military spending party" This should be the democrats mantra for months!

[Norman Solomon]

Yes -- if the deficit is such a big deal then why let the Republicans steamroller this massive giveaway for the wealthy -- and neither party is really taking on the massive military spending?!

[Valley Oak]

So why are these things happening? And what are some possible solutions? What can we do to empower ourselves; what actions can we take?

Thanks,

Edward


Yes -- if the deficit is such a big deal then why let the Republicans steamroller this massive giveaway for the wealthy -- and neither party is really taking on the massive military spending?!

[podfish]

This bit is what gets me: is that after all the Republican whining about the deficit they go and insist on going deficit even further. And what gets me even more is that the Democrats are not crying CONSTANTLY FROM EVERY ROOFTOP that the Republicans don't care about the deficit (just like Cheney said) and they are the "Borrow for tax cuts and military spending party" This should be the democrats mantra for months! The most plausible way to read the strategy (not that I give the dems much credit for actually following it) is that they wrote off 2010 in favor of 2012, and sowed the seeds they expect to harvest then. I think Obama is that type of strategic thinker, though I'm not sure the rank & file of the congress can control themselves enough to appreciate what "following a strategy" really requires them to do. I'm actually amazed that he attacked Republicans for their goals even before they had followed through with the votes he was pushing for. To me that shows he understands the forces inside that party enough to give ammunition to the side opposing his initiatives without too much concern that his brokered deals would collapse. The tensions between the establishment Republicans and the tea party, and the disparity between the tea-party's "shut down gum'mint" goals and the public's desire for services, seem to be the targets of a 2012 strategy. I expect there to be a huge effort to create a picture where there are solutions voted in during the beginning half of Obama's term that are being withheld by Republican demagoguery. I expect the health-care situation to be worse for many people, and the disparity between rich & poor to be even more visible after two years.

Quotes like "our primary goal is to deny Obama re-election", along with all the statements the dems are making about the Republicans being willing to do anything for the bankers and the millionaires, will be trotted out again. The tea-party may well split, some disillusioned by the main-stream Republicans pandering to Wall Street and others deciding they actually -do- want entitlement programs. Older TPers may really fear for their medicare and Social Security. It's not worth much effort right now to attract voters who aren't firmly committed today to positions they'll hold in two years - they'll wait at least another year, and probably another 18 months. Despite the perception that people abandoned the Democrats in droves, it's actually pretty well documented that nearly everyone who voted in 2008 and 2010 voted pretty much the same way both times. There were a lot of 2008 voters who stayed home, and a bunch of new ones, in 2010. I think they expect to marshal a movement in 2012 that is similar to the one they lead in 2008.

To me their actions all speak to this as their long-term strategy. Whether it's a winning strategy is a different question - and I know it's easy to think that they don't have a strategy at all. But the reaction of a lot of the columnists on the right, plus the successes (by his own standards, at least) that Obama has achieved, to me are more evidence that the inside game is being played very carefully. Despite the fact we're all incredibly bound up in the consequences of this game, we're not players; we're being played.

[spam1]

TThe tensions between the establishment Republicans and the tea party, and the disparity between the tea-party's "shut down gum'mint" goals and the public's desire for services,
. I think this is a mis-representation.

Many conservatives don't want to shut down the government, but they do want to limit it's role. One of the main tensions is between the government restricting things for our own good (lead in the water and gas, smog from cars) and inappropriate restrictions on freedom and on presuming that people can't think for themselves (like outlawing toys in happy meals, I mean really, do we think that parents can't stop kids from eating happy meals?).

And the tension is always between those who earn money and want to keep what they earn, and those that don't and want to get money (in the form of desiring services) from those that have it. At the very least, recognize that there is no government money, there is only other peoples' money and every service the government provides is payed by someone else. In times of deficit spending, a significant part of what the government spends is obligations on people in the future.

From my point of view, for example, I think extending un-employment is a disaster. It would be far better to create a WPA-2 and require citizen's who receive other people's money to provide something in return. And, I think there should be a minimum tax level for everyone, even if it is just 1 or 2 percent. If there is to be a tax increase to pay off the deficit, it should be on everyone; I'm ok with progressive taxes but today we have the have's and have-nots of tax payers, with 47% of people filing not paying any income tax. When many (most?) people don't pay income tax, it disconnects the concept that government programs are payed for by private citizens.

So it leaves us with a dilemma of philosophy: People should mostly fend for themselves, make their own mistakes, and suffer the consequences of their actions on one side; and the view that society has a greater good that in includes safety, security and comfort of all citizens and requires correction of in-equalities of the past. I happen to believe both (oddly enough) , and I think that the practical consequence is that rich will have to pay more (maybe a lot more) and every one else will have to pay a little more and accept a little less.