Obama’s worrisome deal
Did he get rolled? And what about the deficit?
Like many people, we can’t tell whether President Obama cut a good deal with Republicans on the Bush tax cuts or was rolled. He got a lot of things he wanted—extension of unemployment benefits, an Earned Income Tax Credit provision, a college scholarship provision and other stimulative goodies—but had to surrender on tax cuts for the rich and the estate tax.
What we can say for sure is that Republicans are blowing smoke when they insist they’re worried about the deficit. The tax deal they gleefully supported will add nearly $900 billion to the deficit over two years, while doing little to stimulate the economy.
That worries us, as does the provision to lower the payroll tax by 2 percent for a year. As the battle over the Bush tax cuts shows, it’s hard to reinstate taxes that have been temporarily lowered, and Social Security can’t afford a permanent decrease in revenue.
We’re also concerned that the president is losing the support of his base. Increasingly his strongest backers see him as caving in to the Republicans, and their support is waning. That augers poorly for the election of 2012. He needs to do something that clearly defines the differences between the parties and gives his base something to become enthused about.