How accommodating and forgiving most Democratic commentators have become. The President’s speech on the budget, deficits and future federal spending was mostly greeted by these people with praise for the leadership it supposedly demonstrated, for the clear alternative to Republican proposals it supposedly presented, and for the way it supposedly asked the rich at long last to share the sacrifices necessitated by our deep and ongoing recession.
What nonsense is such praise. What utter, utter nonsense.
One need only look at the numbers to see how Mr. Obama has caved yet again to the economic right, bought into its economic analysis and policy priorities. It was just a few months ago that he presented a budget of his own designed to reduce projected government debt by about a trillion dollars over 10 years. At the time (this was just three months back remember) he asserted that to reduce the debt more quickly would hurt the economy badly, and impose too great a burden on the many people suffering the worst pangs of recession.
Then last week Rep. Paul Ryan presented a draconian budget plan designed to reduce the government debt by $6 trillion over 10 years — an increase of five trillion in that period over Mr. Obama’s original proposal. And Mr. Obama’s response to the Ryan initiative? Calling for $4 trillion in reductions over 12 years.
So here we’ve just embarked on this huge debate over future spending and government debt, and one of the principals in the debate (the President) immediately moves his starting bid 60 percent closer to the other guy’s. That’s is his opening shot!
Instead of remaining close to what he proposed three months earlier, thereby making the mid-point, the natural compromise point in debt reduction over the next decade $3.5 trillion, he jumps half-a-trillion over that mid-point at the debate’s opening, making the new natural settling point a $5 trillion reduction.
This man attended law school? Lawyers are trained to be negotiators for their client’s interests. If my own lawyer in a case advanced 60 percent toward the other party’s position as his opening gambit, I would fire him immediately and consider writing a letter of complaint to the local bar association.
Ah, you say, but the manner in which Mr. Obama would meet the spending and budget goals he has now set includes additional taxes on the rich as liberal commentators have long demanded. A trillion of his proposed debt reduction is supposed to come from taking back lower Bush-era income tax rates on the $250,000-a-year set, along with some as yet unnamed reforms of the tax code.
How very interesting. Interesting, that is, if your memory of political events stretches back no further than eight months.
If was then in a “compromise” with Republicans that Mr. Obama, in spite of polls showing the public’s opposition, agreed to extend these Bush-era tax cuts for the well-to-do. He agreed to it. His agreement made it possible.
But now he wants to revoke this decision as part of his plan to reduce yearly budget deficits. And how and when might this come about? Not with the present Republican domination of the House. Not after the next election if either house of Congress has a Republican majority. Not if Mr. Obama loses his own job in the next election to a Republicans. And maybe not even if he wins because he “compromises” on this issue again. He did, after all, lie in his last campaign when he said he wouldn’t extend these cuts.
Then there’s the matter of those other reforms of the tax code, which if you listened to his speech carefully you know involve reducing some rates (presumably some business tax rates) while closing loopholes, the latter action supposed to ensure that more revenue flows to the Treasury in spite of lower rates.
Of course things never work that way in the real world. Not for long anyway. The entities with lower tax rates pay less taxes, and their lobbyists and tax lawyers open new loopholes to lower these payments further.
This suggestion, however, doesn’t come directly from Republicans. Rather, it came from the President’s National Commission on Fiscal Responsibility and Reform.
Who headed this commission and was largely responsible for its proposals? A balanced conservative-liberal pair of statesmen? Not exactly. It’s co-chairs was very conservative ex-senator Alan Simpson, and a leading light of the Wall Street wing of the Democratic Party, Erskine Bowles.
And surprise! Nothing they advised would unsettle a conservative and certainly not a Wall Streeter. They most certainly did not recommend, for example, imposition of a Tobin Tax on big bank volume stock churners, or obliging hedge fund managers to pay taxes at corporate instead of LLC rates.
Mr. Obama’s proposal the other day caved to Republicans from the get-go, and played the shared sacrifice card in a way that ensures there will be no shared sacrifice any time soon or probably ever. Personally, I think Republicans would be foolish for run anyone against this man in 2012, He makes a perfect beard for their policy aims. They’ll propose the dirty, he’ll go along, and he and his party will end getting the blame.
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