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I have no idea if Congress can pass the tax cut-extension package agreement announced yesterday by President Obama. Senator Bernie Sanders (I-VT) has already threatened to lead a filibuster if the compromise provisions Obama announced come to the Senate as is.
In the deal, Republicans get the Bush-era tax rates extended on America's richest for a couple years. The GOP also pressured Obama, and he caved, to give them a temporary 35% inheritance tax rate and raise the taxable estate value to $5 million.
In return Obama gets the tax cuts for the other 98% of Americans extended, a 13 month extension of unemployment compensation, a 2 year reduction of the payroll tax on workers from 6.2% to 4.2%, the continuation of a college-tuition tax credit, an expansion of the earned income tax credit, and an accelerated depreciation schedule for business purchases.
The package, according to the NY Times, will cost $900 billion over two years. That would be $900 billion of borrowed money. That would be more than Obama's 2009 stimulus legislation. That would mean $900 billion more added to the deficit. That would mean that Republicans who ran a month ago on fiscal responsibility, deficit hawking and debt reduction....will be approving an additional $1 trillion add-on to...our national debt.
My take is that Obama did pretty well in his negotiations with the Republican hostage takers. Republicans represent the top 2%, the rich, and Democrats represent the rest of America....so all things considered, Obama did pretty well for 98% of Americans in these tense hostage negotiations.
However, let's remember, Obama held his own in a battle where his troops outnumbered the hostage taker party representatives. This compromise is what Obama negotiates with the Party of Hell No when his party is in the majority, even if it is a lame duck majority.
How do you think negotiations will go after January 1 when Republicans will own the House?
Now the WTF part.
Obama and those wily deficit hawks came to an agreement to add $900 billion to the debt. But, by god, next year Obama has promised to address our huge deficit and debt problem. By god. And in his upcoming State of the Union address and when he submits his new budget, Obama will announce some of those very hawkish ideas.....one month after agreeing to add almost $1 trillion to the very debt he plans on trimming.
In the upcoming SOTU, most likely, Obama will point to the pile of excrement his Deficit Commission came up with and announce he's willing to compromise with the hostage taking party in order to get Serious....no joking around.....about the national deficit and the debt.
In 2011, Obama will make the same argument he timidly attempted to make recently, i.e., that we cannot afford those lower tax rates on the privileged class. It will be the same argument that he just lost......and he will have fewer Democrats in Congress. Who do you think will win that one?
All who will be left to fleece will be the 98% of Americans. And fleece they will. Obama is a pragmatist.....and a conservative in the same mold as Eisenhower, Nixon, or Bush, the Elder. Obama decided on his own to form a Deficit Commission. Congress rejected the notion. Obama didn't form that Commission for no reason. He will, instead, seek to gain momentum for the 2012 re-election by appealing to low information, independent and moderate voters by cutting back on New Deal safety net programs. A Democratic president will introduce America's version of an austerity program similar to the foolish austerity programs underway right now in Europe.
After agreeing with GOP hostage takers to add almost $1 trillion to the national debt.....Obama will join those hostage takers in telling Americans THEY need to tighten their belts. The entire theatrical production will be laughable....just as laughable as mighty GOP deficit hawks taking hostages in order to extort higher deficits out of the President.
Finally....and this, I think, is the real ass-kicker: When Obama runs for re-election in 2012, the same Republicans who forced Obama to accept their hostage terms or Uncle Sam would get in in the temporal lobe.....will campaign against Obama by pointing to the outrageous increased deficits and debt ransom provisions that they forced him to accept.
And all the Villagers will nod in agreement.