The progressive resistance to the Obama deal on tax cuts is both unreasoning and unreasonable. Unreasoning because the opponents, whose anger is congealing into adamantine ideology inside the Democratic Party, are pulling out a cascade of objections but offering up no practical alternative. Unreasonable because what the president achieved — which in reality should be called an economic recovery package — is a fundamentally progressive deal.
Yes, Obama and Vice President Joe Biden, who skillfully negotiated with Republican Senate Leader Mitch McConnell, had to concede on the top rate tax cuts — for now. Democrats can battle the issue out, and win on it, in 2012 — which is what should have happened in the midterms, and might have but for the counsel of some of the same members of Congress who are now digging in or dragging their heels against the agreement. And yes, the 15 percent rate on dividend and capital gains will continue for two years — which probably makes sense when markets are rising but still fragile. After all, the markets do matter to those whom progressives claim to fight for, determining the value of 401(k)s and the pension funds and savings of workers, retirees, and the entire middle class.
Now look beyond the concessions — and the tantrums of the blog people and electorally battered Democrats in Congress — and measure what Obama has secured in return. It's far more than predicted, consisting of measures that will lift the income of the many, not just the few. It isn't a cave-in, but a way out of the slow economy that not only hurts tens of millions of Americans, but also threatens the end of the progressive project in 2012 — and perhaps for a generation or more.
The extension of tax cuts and the fix that will prevent the alternative minimum tax from ensnaring those it was never intended to cover will save the typical family $2,000 a year. That's progressive.
A one-third cut in payroll tax rates for 2011 will put $120 billion into the pockets of 150 million working families — who will be able to live a little better, and whose spending will spur the economy. That's progressive — despite the fear-mongering of some liberals, searching for any and every argument to assail the president, that this is the beginning of the end of Social Security, which depends on the payroll tax. But the reduction is a temporary measure, proposed by liberals and conservatives alike to deal with the downturn. There's no prospect that it will become permanent — unless you believe, among other impossible things, that a compliant Barack Obama has bought into a secret strategy to destroy Social Security. And that notion isn't progressive; it's paranoid.
Next, the extension of the child tax credit and the earned income tax credit — with the government writing checks to those who work but don't earn enough to pay income taxes — will reach 12 million lower-income families and 24 million children. The refundable college tax credit of $2,500 will help eight million students pursue higher education to help them compete in the global economy. All this is progressive too.
For the hardest pressed, Obama won a 13-month extension of unemployment compensation for the long-term jobless. Nothing could be more regressive — or illiberal — than to sacrifice millions of workers who are out of work and out of benefits to a futile exercise in liberal posturing. If not through this deal, then how will their plight be addressed? How will they feed their families or pay their rent? Those who don't have to worry about that should be cautious of trafficking in self-satisfying appeals to all-or-nothing politics. The unemployed can't live on the porridge of ideological purity.
Taken together the elements of the Obama compromise will also advance a principle often invoked by a progressive champion who believed results are more important than speeches: As Ted Kennedy said, "the greatest social program is a job." The extension of unemployment compensation alone will mean more demand, more consumption, and the creation of 600,000 jobs. According to the Treasury, the extension of the middle-class tax cuts will save one million jobs that could be lost if a sudden tax increase whacked the economy. Another tax provision, sought by the president, will let business treat all investments as expenses for tax purposes during the next year — and so raise investment by up to $50 billion. When you add the payroll tax cut, Mark Zandi, chief economist at Moody's, estimates that the package will raise growth by 1.25 percent next year, driving unemployment down to 8.5 percent by year's end — with more gains in 2012.
Progressives can't move forward by stamping their lame-duck feet — by leaving the jobless with nowhere to turn, by letting the mainstream middle lose out, and by showing that they care so much for the unemployed that they're willing to create many more of them.
And Democrats in Congress can't afford to dither, grabbing onto any obvious or expedient excuse. Some complain about adding to the deficit — when in the past they've supported exactly that in an economic emergency, and when most economists right and left now agree that immediate deficit reduction would be risky or recession-inviting.
Nor should Democrats be too self-righteous about the decision to exempt a couple's first $10 million from the estate tax; they themselves have proposed setting the exemption at $7 million. They're right, but here again, the cause of fairer taxation for the wealthy doesn't justify heavier hardship for ordinary Americans.
Finally, the president's been criticized in all this for not emoting — or shouting — enough. At least, the complaints ring out, the theatrics could have been better; he could have made a fiercer and more unyielding case — which is strange coming from the Congressional Democrats who didn't vote on the tax issue earlier this year when they could have deployed it to draw a sharp dividing line in the midterms. What was required then was more Pelosi and less Blue Dog.
What's required now is a long-term view. And how about a dose of short-term memory too? Maybe Obama should emote more, but he's accomplished more than any Democratic president in decades. In addition to health reform, financial reform, and college loan overhaul to benefit students, not banks — in addition to the first stimulus that prevented a depression — he's turned the Republican obsession with tax cuts for millionaires into a new engine for economic recovery.
It's time for liberals to recall JFK's description of what it means to be a liberal: "Our responsibility is not discharged by announcement of virtuous ends. Our responsibility is to achieve these objectives with social invention, with political skill, and executive vigor."
That's what Barack Obama has done — again and again. In this tax debate, he didn't triangulate; in fact, on cool reflection, it's clear that he's outflanked the GOP. The results, now and all across the past two years, aren't perfect — politics never is — but the president has earned his progressive union card.
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