There is more than a financial crisis still going on in Washington; now there is an identity crisis as well.
With the recent “deal” passed by Congress to cut taxes on all households making less than $400,000, President Obama is facing some intense criticism from members of his own party—and rightfully so. The White House, with help from a Democratic Senate, just gave Republicans what they always want: tax cuts.
It wasn’t long ago that President Obama slammed the GOP for its fundamental philosophy of cutting taxes to fix the economy. In his speech at the Democratic National Convention in September, here is what Obama said:
They [Republicans] want your vote, but they don’t want you to know their plan. And that’s because all they had to offer is the same prescription they’ve had for the last thirty years.
Have a surplus? Try a tax cut.
Deficit too high? Try another.
Feel a cold coming on? Take two tax cuts, roll back some regulations, and call us in the morning.
America listened, agreed, and voted, but the latest fiscal band-aid from Washington is primarily a tax cut for 98% of Americans. This is what the White House now sees as a victory for economic policy.
The President may have won some modest gains in tax rates for the top income bracket and capital gains, but these are negligible when compared to the potential of sequester-forced cuts to the Republicans’ golden calf of defense, cuts that Democrats could have gotten had they not forfeited the political leverage they may never see again.
Cutting taxes for the middle class may have been the right political move at any cost –it’s always the right move politically– but the tax cuts should not have been tied to the “responsible” (i.e. miniscule) spending cuts which averted the sequester. Had those sequester cuts gone into effect, Republicans and Democrats would have had a chance to do some real bargaining: defense versus entitlements. Goliath versus Goliath. That is what America needed for a long-term solution to its biggest problem, credit rating be damned. Instead they got a liberal (?) President doing nothing more than immortalizing the conservative tax cuts of his short-sighted predecessor.