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So who came out on top in the new tax deal?


Now being variously called “The Capitulator-in-Chief,” “The Doe-eyed Poker Player,” “The Left-Liberal Disappointment” and all manner of foolish names, President Barack Obama again defies easy characterization and pigeon-holing.

Clearly, he is a very smart African American male surrounded by hostile forces in various guises, all seeking to control him, undermine him, own him, etc., and none of that seems to be working. Whoever else we thought we were electing, the president has consistently shown himself to be an artful political player and a guardian of what he perceives to be the public good and right, “providing the greatest good to the greatest number of Americans.”

As Obama very aptly put it in his recent press conference announcing the major tax cut deal he and his allies had negotiated with the Republicans, it was his job to look out for the American people–particularly the working and middle classes–and he got the best deal he could get under the circumstances in this lame duck congressional session.

Politically and economically, he is very correct, of course. It is also very telling that he was willing to sacrifice major political credibility and risk all kinds of name-calling from even his Democratic base to achieve this deal that will be passed–in spite of all rhetoric to the contrary–in both houses of Congress.

Rather than weakness or timidity, the president is once again demonstrating a sure-handed grasp of what to do in the face of feckless support and forward movement from his own party and stonewalling arrogance from the Republicans. And this is all with only a very limited time in which to act and get something tangible done. Actually, the Democratic-led Congress could have taken care of the Bush tax-cuts issue in September, two months before the midterms. But the leadership in both houses chose to kick the can down the road to the very end of this current congressional session, so the president’s choices were very limited, indeed. He only had four options.

First, he could have done nothing, and the tax rates on everyone would have gone up as the sunset clause on the Bush tax cuts expired on Dec. 31. Not only would the average middle-class family owe more than $3,000 additional on their 2010-2011 taxes, according to the Congressional Budget Office, (plus other calamities when money is still very tight), but the extension of the unemployment benefits–to prevent some people from starving during the Christmas and winter months–would not have seen the light of day.

Secondly, he could have rallied rhetorically against the Republicans and hammered them for being downright hypocritical–claiming the issue of deficit reduction to be their number-one priority and yet demanding a tax cut for wealthy Americans that would increase the deficit by more than $250 billion.

The president would have worn the mantle of Liberal Champion for the Left in the Democratic Party, gained style points for staring the Republicans down, but essentially accomplished nothing tangible, as the Republicans would have played political chicken until both cars flew off the cliff toward the rocks below.

Thirdly, the president could have also appeared and been indecisive, waiting for action from a ponderously slow Congress that already has an overly full plate of last-minute issues to handle–again, accomplishing nothing but more negative media coverage and pejoratives.

What the president did do was act boldly himself. He called everybody relevant to the negotiating table and got a deal crafted that achieved a political compromise which included what amounts to a second American economic stimulus package (when he knew Congress would not now, and certainly not after January, approve another American Reinvestment and Recovery Act).

He gave up two years of tax breaks for the wealthy and the estate tax relief for homes up to $5 million–approximately $275 billion. What he got was worth twice that. In fact, when one actually looks at the deal, if anybody got snookered (aka, got “monted”), it was the Repubs.

Here’s what the deal–written in a very short, 72-page congressional bill  H.R. 4853–looks like when opened up:  (1) reduced income tax extensions for everyone through 2012 at a cost of  $545 billion (including the Alternative Minimum Tax protection); (2) A 2 percent payroll tax cut for 2011; (3) business, investment and other tax extensions, which include $22 billion for depreciation and other business incentives through 2012; a research and experimentation tax credit; a state and local sales tax deduction; an ethanol fuel tax credit extension; a restaurant and retail tax credit for capital development; a biodiesel and renewable diesel tax credit and several other concessions.

Yes, the rich, at least a handful of them, will get richer for two years.But all in all, if measured by who got the most for their team, President Obama’s side won. They negotiated at least $500 billion of the deal for middle and working class Americans.

If measured by whether this compromise actually becomes a permanent extension of the Bush tax cuts, already known by most economic analysts as a key to causing the current recession, the president’s political calculation says no.

In the worse-case scenario, the Democrats lose both the presidency in 2012 and Congress. Even after that election, President Obama will still be in charge through Dec. 31, 2012, when all of the tax-cut extensions expire. He can and will veto any congressional attempt to extend them any further or make them permanent, if he needs to do that.

If the Democrats actually win it all back in 2012, the Bush tax cuts just expire, period. Advantage, Democrats.

Now Congress has a clearer plate to deal with the Dream Act, Don’t Ask Don’t Tell, the critically important START treaty and other weighty issues within the next 10 days. Advantage, Democrats.
The Great Capitulator?  The Great Wilter? I don’t think so. Apparently, community organizers know how to play three-card monte well, and cloistered Repubs don’t. Stay off the streets, ya’ll Republicans,  or you may be rolled again by the Obama street team.

Professor David L. Horne, is founder and executive director of PAPPEI, the Pan African Public Policy and Ethical Institute, which is a new 501(c)(3) pending community-based organization or Non Governmental Organization (NGO). It is the step-parent organization for the California Black Think Tank which still operates and which meets every fourth Friday.

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