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For Liberals, Little Comfort in Tax Cut Compromise

Friday, December 10, 2010

Welcome to Politics Bites, where every afternoon at It's A Free Country we bring you the unmissable quotes from political conversations on WNYC. On today's Brian Lehrer Show, Lawrence Mishel, president of the Economic Policy Institute, talks about whether liberals should still be upset with the details of the plan.

When asked if he had reconsidered his opposition to President Obama's tax cut compromise since Monday night, Lawrence Mishel couldn't give a definite yes or no. The most he could say for certain is that liberals got more out of the deal than anybody thought they would.

This is a deal that actually provides more stimulus about jobs and lowering unemployment than I would have expected a week ago. I met with the president on Tuesday and he said we got much more than he thought was available a month ago if you asked him. The Republicans did what they do, which is defend the ability of people with great wealth to be able to have very little taxes on their inheritances and to cut back on the taxes they pay on their incomes. What the president got was 13 months continuation of the unemployment plan, which most of us here in Washington didn't think we were going to get.

So given the choice between raising federal revenues and cutting spending to deal with massive budget shortfalls, the government chose neither. Mishel said that this illustrated the "deficit hysteria" that's run rampant on Capitol Hill since Obama took office. In recent months, worries about the deficit have helped Republicans take back the House of Representatives and forced Democrats to relent on a number of fiscal policy issues, all in the service of what many liberal economists believe to be a non-issue.

The Republicans are hypocrites because these tax cuts for the rich, they'd like that to be deficit financed, but they're not willing to deficit finance unemployment benefits. For some reason, a dollar being taken out of a rich person's pocket is really horrible for the economy, but a dollar in the pocket of an unemployed worker doesn't help the economy whatsoever. On the Democrats' side, they now have to defend raising the deficit, but that's good policy.

While there are some things in this compromise for liberals to be happy about, Mishel thinks that Obama and Congressional Democrats could have held out longer and gotten a better result, both economically and politically.

If you let the tax cuts expire and all the taxes go up, you get the people's attention, then you have a much more fervent debate, and you actually get people to pay attention to who's defending the rich and who's defending the middle class.

Liberal callers said they didn't need to pay any more attention to who's defending which class. While Mishel seemed ultimately ambivalent about the compromise, people on the phone were furious. A woman named Linda was especially fed up with Democrats' concessions.

I think the Democrats need to draw a line in the sand now. They were real wimps during the election and Republicans were all about the deficit, the deficit, the deficit. And now they want to give all this money to the top one percent. It's crap! I heard so many people complain about bailouts. They should be crying about giving all this money to rich people.

A man named James echoed her sentiments, but was more bewildered than angry. Like Linda, and most of the liberal base that Obama called out during his Tuesday press conference, James just can't wrap his head around providing economic relief for the wealthiest Americans, even if it's given in exchange for other items on the liberal wish list.

[The rich have] got so much money, if they lived to be a thousand they couldn't spend it. And yet they want more, I don't understand it. The poor people are in trouble, obviously, there's no jobs out here. The middle class are getting squeezed to death. I work for the city, they're laying off people like crazy. I don't know what to say. It's very discouraging out here.

» Listen to the entire conversation on The Brian Lehrer Show.

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Comments [4]

Hal from Bear Country, NJ

By my reading of history, it is very hard to know what strategic move will have the best impact, but, having said that, I don't think I'd mind seeing the tax bill rejected.

I'm much more concerned with framing the issues accurately. George Lakoff excited me at one time, but he needs a shot of James Carville's adreneline or something. As it is, he is putting people to sleep, so let me give it a try.

The inheritance tax is double taxation IF AND ONLY IFF we are a nation of dynasties. The basic philosophy of our tax system is that money is taxed when it changes hands in a meaningful way. Taxing the dead is of course meaningless; no individual is being taxed twice. The inheritance tax is a tax on having a big pot of money fall into your lap; NOT a tax on dying. To abolish the death tax (and to a lesser extent to drastically weaken it) is to put ourselves on the road to a dynasty based society; i.e. plain old 18th century aristocracy, if we weren't pretty far down that road already.

Dec. 15 2010 11:40 AM
natalie burrows from Brooklyn, NY 11201

I believe it's time to draw a line in the sand and vote down this atrocious bill. The Brooklyn Democrats I know do not talk about the estate tax. They are outraged by the entire bill and it's continuation of Bush tax cuts for the rich AND the attack on Social Security via rolling back the payroll tax for one year. Congresspeople and citizens do not emphasize the same things.

Dec. 15 2010 10:45 AM
Laurie from Princeton, NJ

I've just listened to the Mishel segment on podcast and it was helpful in unpacking what is a more complicated deal than it appeared at first. I was very angry at the initial announcement, feeling Obama had sold out and was blaming "sanctimonious" liberals (people like me) for something that is emphatically not our fault. I am still angry even though I have more information about the content of the agreement. What angers me is the tone of Obama's "rant" (in Brian's word). I'm 58 and have voted in every presidential election since 1972, trying to be thoughtful and a good citizen. Mr. Obama is scolding me as if I'm a wayward child, have no right to any opinion different from his, and should shut up because he's president and knows best. That's not leadership; it's a fit of pique. He has a chip on his shoulder about the healthcare bill (which he also did a poor job of explaining and defending) and doesn't care what "the liberals" think any more. This is just plain immature on his part and a major political mistake. A real leader would have brought his base and his party along with him, (on this deal as well as healthcare reform) and made us feel we have a stake in a negotiation that got more than expected in a lame duck session. Instead, his base was blind-sided, hurt and turned off, and justifiably angry. I don't think this is the way for him to get re-elected; I certainly won't go out of my way to work for him next time around.

Dec. 10 2010 11:43 PM
Carl from Stamford, CT

It is exasperating that the Democrats continued to be cowed by any "THREAT" of a Republican filibuster every time they cannot reach the 60 vote threshold on any issue.

I cannot understand why they do not force the Republicans to actually stage a filibuster on something as important as tax-breaks-for-the-rich issue. This is a win-win issue. Force the Republicans to "go to the mattress" defending the indefensible, (tax cuts for the ultra-rich) while the jobless go without. Force them to stand in the well of the senate night and day until they fall down or until their constituents tell them they are wrong to prevent extension of the middle class tax cuts!

If no extensions of any tax cuts pass by January, Obama will retain the veto pen in the new congress to prevent more extortion by the Republicans.

Dec. 10 2010 05:04 PM

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