Why the Tax Deal Is an Abomination

Obama Extends Bush Tax Cuts

The deal the President struck with Republican leaders is an abomination.

It will cost $900 billion over the next two years — larger than the bailout of Wall Street, GM, and Chrysler put together, larger than the stimulus package, larger than anything that’s come out of Washington in years.

It makes a mockery of deficit reduction. Worse, the lion’s share of that $900 billion will go to the very rich. Families with incomes of over $1 million will reap an average of about $70,000, while middle-class families earning $50,000 a year will get an average of around $1,500. In addition, the deal just about eviscerates the estate tax — yanking the exemption up to $5 million per person and a maximum rate of 35 percent.

And for what?

Wealthy families won’t spend nearly as large a share of what they get out of this deal as will middle-class and working-class families, so it doesn’t do much to stimulate the economy.

The deal further concentrates income and wealth in America — when it’s already more concentrated than at any time in the last 80 years.

The bits and pieces the President got in return — extended unemployment benefits, a continuation of certain small tax benefits for the middle class — are peanuts. After last week’s awful jobs report, Senate Republicans would have been forced to extend unemployment insurance anyway.

It’s politically nuts. Polls showed most Americans are against extending the Bush tax cuts for the wealthy.

It would have been a defining issue for the President to use to show whose side he’s on (the middle and working class) and whose side the Republicans are on (not the middle and working class). And given that the House turns over to Republicans in January, the President probably won’t have another chance like this one.

It loses him even more of his “base” — by which I mean people who think of themselves as Democrats and are committed to the ideal of equal opportunity and don’t want the nation to become even more of a plutocracy.

Robert ReichIt makes him look weak — Republicans got everything they wanted. And when a President looks weak, he is weak.

House and Senate Democrats should reject this abomination.

The President should get himself new advisor.

Robert Reich

This article first appeared on Robert Reich’s Blog. Republished with permission.

The video below was added to this post because Keith Olbermann echo’s Robert Reich’s assessment of Obama’s tax “deal”. It’s worth listening to.

Visit msnbc.com for breaking news, world news, and news about the economy

Published by the LA Progressive on December 8, 2010
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About Robert Reich

Robert B. Reich is Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written eleven books, including The Work of Nations, which has been translated into 22 languages; the best-sellers The Future of Success and Locked in the Cabinet, and his most recent book, Supercapitalism. His articles have appeared in the New Yorker, Atlantic Monthly, New York Times, Washington Post, and Wall Street Journal. Mr. Reich is co-founding editor of The American Prospect magazine.

Reich has been a member of the faculties of Harvard’s John F. Kennedy School of Government and of Brandeis University. He received his B.A. from Dartmouth College, his M.A. from Oxford University, where he was a Rhodes Scholar, and his J.D. from Yale Law School.

Comments

  1. garry walsh says:

    If voting mattered they wouldnt let us do it
    …Mark Twain

  2. Joe Weinstein says:

    I supported the guy gladly in 2008. He had shown more spine and independence than either Hillary or (if you want to look at crossover possibilities) McCain. Likely the same can still be said (in that pathetically limited universe of alternatives).

    But ever since he has seemed more and more like a version of Carter – truly ‘lusting in his heart’. But in this instance lusting for what? Well, in this case to be accepted BY the Republicans! if not indeed to be accepted AS a Republican!

    It’s worse than that. His record is not merely one of an OBushma, but indeed of an O’Bonkers. He figures on getting nuke non-proliferation by giving Iran and N Korea ever more time?
    He was gung-ho to stop climate change, and three months later called not only for burning more oil but for extracting it in the environmentally worst way – from undersea. From the get-go his Sec. of Interior might as well have been named Ken Palin – his biggest agendum now is to cancel decades of restoration, gut the Endangered Species Act, and help the northern Rockies states massively kill wolves. Meanwhile, it’s Peace Prizes and Afghanistan.

    I guess he figures it can all play because after all his rhetoric is cool and analytical – just never mind his actions.

    Once again, the message is clear.

    Francisco Madero said it to his fellow Mexicans a century ago. You may not have a particular alternative in mind to your sellout president (perfidious Porfirio Diaz) but you must NOT re-elect him. NO RE-ELECCION!

    Eugene McCarthy dared to say it about LBJ to Democrats in 1968. NO RENOMINATION!

    And whether or not in 2010 some politician of standing cares yet to say it about Obama, it’s time we got and voiced the message:
    NO RENOMINATION!

  3. Keith Olbermann in his Special Comment spoke more clearly and eloquently than I could what my thoughts are towards the Obama administration. I have to wonder if Obama will ever listen to it, yet alone understand and embrace the concept of actually acting out what he so eloquently expressed in 2008. He should be ashamed, make a public apology, and then grow a spine.

    You expect to be betrayed by your enemies, but it is much worse when you are betrayed by your friends.

    Obama chose his circle of advisers, themselves part of the vultures that have enriched themselves criminally, and is ultimately responsible for that and his final actions.

    He has proven himself to be nothing but a salesman, certainly not a leader willing to make tough decisions and actually push through his stated agenda. He fails to recognize that there are people in this country that want to destroy the American dream, enrich themselves at the expense of others, and will use every and any method to accomplish that end.

    Our civil liberties, privacy, economic well-being, and democracy has been compromised so many times our country is unrecognizable, and the Democrats have been complicit in that destruction. Worse, Obama has not only been complicit, he has been an enabler of those that would destroy all progress this country has and should make for its citizens.

    I am more than disappointed, I am disgusted and feel that my vote was betrayed.

  4. Mr. Reich You’re right! So, why don’t you volunteer to be an advisor.
    The first thing you should do is advise the president to go to Vegas. When he get there he should sign up to learn how to play poker. Along the way he may learn that when he holds a straight flush he should play to win and fill up the pot. Now that he only has a flush he must still play to win and not be bluffed by fools. He’s too cool, which is a good thing when you bluff, so he should be a little more adament in the clinches. Maybe the atmosphere in Vegas would instill some toughness in dealing with the ladies working the streets, otherwise known as Republicans.
    It’s a good thing he isn’t a woman as surly he would be delivering a baby every year as he would never be able say no to the “loving” lads on the right.
    I love the guy, but, darn, he’s a disappointment.
    He should also pull a bush and tell the army to start the process with gays. Truman is spinning in his grave! He’d fire those generals that don’t show proper respect for their commander.

  5. GOP = Grand Obama Party

    If you assume Obama actually wants to help America’s workers instead of the banksters and corporate backers who financed his political career, then it would make sense that he get new advisers. But I think it’s more likely that Obama is operating exactly as planned. He’s a stealth Republican. He tricked us by basically lying to us about what he’d do as President.

    What an unmitigated disaster. Obama’s move to extend the Bush tax breaks for the people who wrecked our economy and put millions of us out of work shows once and for all whose side he’s on. He’s not doing us any favors by pretending to trade the tax breaks for unemployment extensions. The republicans would have looked like fools if they let the benefits expire. Even a reasonable compromise would have been another three months of unemployment, with a vigorous jobs program to reemploy all those people and more. Instead, we get a ballooning deficit that will kill the Dem Party’s chances in the next election, and unemployment bribes so a few will overlook his betrayal. For the rest of us who are either working, underemployed or not employed but not eligible for unemployment, all we get out of this deal is a big fat bill and no new jobs.

    It’s time to take back control of our government and our country, starting with the man who we voted for in this “historical presidency.” If this were Bush doing this kind of sneaky, back-stabbing of America’s workers, we’d be raising hell. But Bush-lite is harder to challenge because, well because we put him there. We trusted him. Now we have to face the fact that he tricked us, and that’s a hard pill to swallow. At some point, we need to realize we got duped and start fighting against Obama and any other Democrat that forces wealth redistribution from the middle and working classes to the rich. We need to fight as hard as we would a Republican president cheating us, even though it’s more painful when it’s our own guy. It’s our duty to stop Obama and the thieves in Congress before they completely decimate our future, our children’s future and the future of this fragile democratic republic.

    This wonderful experiment in democracy that we call the USA doesn’t exist for the rich, it exists because little people like you and I demanded it, created it, paid for it, and fought to keep it alive for 200 years. We OWN this government. Let’s start acting like it and create a new political party to fight the Democrats and Republicans that are stealing from the middle class to give to the rich.

  6. Jim Cirile says:

    It is very frustrating to see people like Mr. Reich who just Don’t Get It. The fix was bin from the get-go. Everything Obusha does is carefully designed to advance the Neocon/corporatist agenda while giving lip service to Democratic issues. In short, he’s full of shit and always has been. Why is it so difficult for everyone to grasp this simple concept: We’ve Been Had?

    From day one in office, it has been very clear that Obusha was a fraud, a Neocon Trojan horse. The giveaway was maintaining all the Bush people in key positions so the perfidy and policies could continue. Seriously, Ben Bernanke and Robert Gates? What more needs to be said? And yet so many progressives continue to believe that Obusha is “trying” but that he “needs new advisors.” Well, it’s time to wake the hell up, poeople. Obusha has strategically betrayed the American people every step of the way, and it is only because of all of our own steadfast stupidity and uncanny ability to apologize for and enable our abuser that we’re not publically saying the obvious:

    WE’VE BEEN HAD.

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