Ideally, Dems Would Know How To Negotiate
Posted on Tue Sep 07, 2010 at 07:27:00 AM EST
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Obama's Former Budget Director:
In the face of the dueling deficits, the best approach is a compromise: extend the tax cuts for two years and then end them altogether. Ideally only the middle-class tax cuts would be continued for now. Getting a deal in Congress, though, may require keeping the high-income tax cuts, too. And that would still be worth it.
(Emphasis supplied.) It should not require giving the wealthy and corporations a tax cut in order to give the middle class a tax cut. Only the political incompetence of Democrats and their bureaucrats would make this so. It is at the heart of the political and policy failure of the Obama Administration and the Democratic Congress on the economy. Peter Orzag's first column for The New York Times illustrates why the Dems are poised to receive a crushing defeat in November. There are other flaws in Orzag's analysis:
The beauty of extending the tax cuts for only two years is that canceling them doesn’t require an affirmative vote. It happens by default, so Congressional deadlock works in its favor. And it would essentially solve our medium-term deficit problem, reducing the deficit by $200 billion to $350 billion a year from 2015 to 2020. [. . . A] key part of this deal is actually ending the tax cuts in 2013 — and that will surely require a presidential veto on any bills to extend them after that. (Failing to follow through would be particularly problematic if the high-income tax cuts are made permanent — at a 10-year cost of more than $700 billion.) Minimizing this risk requires as much upfront clarity and commitment as possible, including a strong and unambiguous veto threat from the president.
Any tax cuts extended now will NOT be cut in 2013. Only a fool or a knave could think otherwise. As Orzag notes, the beauty of the negotiating position today for Democrats and the President is that no affirmative vote is required to end the Bush tax cuts, which were designed to expire next year.Now is the time of maximum negotiating power for Democrats and the President. Now is the time to make the deal you want to make. Deferring the negotiation to 2013, which is what a "2 year extension" would do, is simply idiotic.
Yet this idiocy is emblematic of the failure of political bargaining by the White House and the Dems the past 20 months.Orzag's first column is incredibly revealing and illustrative. It explains much of what went wrong the past 20 months.
Speaking for me only
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