NRO – Rick Lowry
Surely, if President Obama had been scripted this afternoon he wouldn’t have let loose with such a self-revelatory rant at the end of his presser. To this point, the hallmark of Obama has been his bloodlessness and lack of emotion, in almost any circumstance. North Korea could nuke Seoul and he’d come out and coolly pronounce it a regrettable event that proves we need to ratify New START. We’ve learned today that what really gets under his skin and makes him boil is criticism, and especially criticism from progressives.
Only a man of the left could care so much about attacks from the left wing. Only a president who is extremely thin-skinned would let criticism bother him so much that he’d — relative to his usual affect — erupt in anger in public about it. Only someone who desperately hates the position he’s in now, having to try to accommodate political realities in a center-right country and kiss his former messiahship goodbye, would show such peevishness. We got a good look behind the curtain for a moment this afternoon, and it wasn’t pretty.
Okay, we now have our first poll measuring the impact on the Democratic base of Obama’s support for a temporary extension of all the Bush tax cuts. Suffice it to say this is a major, make-or-break issue with them that could have real political ramifications for the President and Congressional Democrats.
The poll, done by the respected non-partisan firm Survey USA, surveyed over 1,000 people who contributed time or money to Obama in 2008, and found intense, overwhelming opposition among them to Obama’s support for a temporary extension of the tax cuts for the rich. This supports the notion that there may indeed be a serious liberal revolt in reaction to it.
Indeed, majorities of people who contributed to Obama in 2008 say they are less likely to support Obama and Democrats because of his backing for the temporary extension.
I got an advance look at the poll, which was commissioned by MoveOn, and you can read the polling memo right here. The key findings:
The poll shows clearly that these contributors are deeply opposed (74%) to a deal with Republicans to extend the Bush-era tax breaks for those making over $250,000 a year. The depth of opposition to a deal is severe with former Obama contributors saying that they are less likely (57%) to support Democrats who support this deal in 2012.
A majority of the former Obama contributors surveyed also say that the President’s deal also makes them less likely (51%) to contribute to his reelection campaign in 2012.
So 57 percent of Obama contributors say they are less likely to support Congressional Dems for reelection if they back the temporary extension, meaning there could be a political cost for Dems for embracing it. And more than half, 51 percent, say they are less likely to shell out cash for Obama’s reelection in 2012, suggesting it could damage his ability to turn out the same coalition that elected him in 2008.
These findings goes directly to the heart of a question that commentators are starting to ask: Does the left’s anger matter? Will it have any impact? No doubt some will argue that it can only help Obama to anger the left…
Politico44 – By MATT NEGRIN
President Obama took straight aim at Democrats angry over tax cuts for the rich on Tuesday, telling them that if they spend all their time fighting for everything they want, they won’t get anything done.
“This is the public option debate all over again,” Obama told reporters at a last-minute press conference at the White House. He recalled the debate in which progressives fought for the “public option” in the health care bill even though the legislation granted health insurance for millions of Americans, and he ridiculed the idea that a failure to pass it “was a sign of weakness and compromise.”
“Now if that’s the standard by which we are measuring success or core principles, then let’s face it, we will never get anything done,” Obama said, his voice rising in the briefing room.
He then declared: “That can’t be the measure of how we think about our public service. That can’t be the measure of what it means to be a Democrat. This is a big, diverse country. Not everybody agrees with us. I know that shocks people. You know, the New York Times editorial page does not permeate across all of America. Neither does the Wall Street Journal editorial page.”
Obama assailed liberals for seeking the “satisfaction of having a purist position and no victories for the American people.” He argued that while “we will be able to feel good about ourselves and sanctimonious about how pure our intentions are and how tough we are,” Americans will be suffering if they don’t have health insurance or unemployment insurance.
“This country was founded on compromise,” he said, defending his deal with the GOP on giving tax cuts to the rich for two more years. He also told reporters to “take a tally” and measure his campaign promises with what he’s accomplished, arguing that there wasn’t a “single thing” he promised “during my campaign that I haven’t done or tried to do.”
“And so, to my Democratic friends, what I’d suggest is, let’s make sure that we understand this is a long game,” he said.
The Hill – By Sam Youngman
President Obama could be crippling his own reelection effort by making a deal with Republicans to extend all of the Bush-era tax cuts, Democratic strategists and liberal groups said Monday.
A two-year extension of tax rates ushered in by President George W. Bush nearly a decade ago, would ensure a resumption of today’s fiery debate in 2012, when Obama is expected to reapply for his job, strategists in both parties said.
It also is angering the left wing of the Democratic Party, which already has a long list of complaints about Obama.
“President Obama has shown a complete refusal to fight Republicans throughout his presidency even when the public is on his side — and millions of his former supporters are now growing disappointed and infuriated by this refusal to fight,” said Adam Green, co-founder of the Progressive Change Campaign Committee.
The PCCC on Monday afternoon circulated quotes from 2008 Obama campaign staffers who expressed disillusionment with the president for agreeing to extend tax cuts for the wealthy amid signs that the White House and Republicans were edging closer to a deal.
“Obama is demobilizing the troops and demoralizing the public right before he seeks reelection,” Green said.
The compromises by the White House have also disappointed liberals in the House and Senate, who have pushed Obama to take a tougher line with the GOP. Some liberals had said it would be better for Obama to allow all of the tax cuts to expire rather than cave to GOP demands and allow tax cuts for the wealthy to be extended.
Democratic strategists are disappointed that the president appears to be fighting the tax debate on terms dictated by Republicans, who have been able to frame a tax increase on any taxpayers as detrimental to a struggling economy. Friday’s unemployment report, showing a surprising jump in the jobless rate — to 9.8 percent — didn’t make matters easier for the White House.
“This is only a tough fight [now] because Americans have lost faith that President Obama is fighting for their economic futures,” said Jamal Simmons, a Democratic strategist and former official with the Clinton administration.
But Simmons and other Democrats believe a shift in the economy could help the president and Democrats argue for an end to the tax cuts in two years.
“I think most people feel like the economy is still really bad, and the idea of raising taxes on anyone right now does strike the average person as ‘This might not be a good idea,’ ” said Lara Brown, a political science professor at Villanova University. “But when people are making money, tax increases are just not as scary.”
Aware of the second round of fights facing him, Obama said in his late Monday statement that he will spend part of the next two years engaged in a conversation to try to convince people that the country cannot afford another extension of the high-end cuts.
By agreeing to a two-year extension of the cuts, Obama appears to be gambling that he — and the economy — will be in a better position to define the debate in 2012, when it could be more fruitful for Obama to sell a tax hike for the rich as part of an effort to lower the national debt.
“If by 2012 the president can convince voters of his commitment to helping them reclaim the American Dream, they’ll support denying tax cuts for the wealthy that put us $700 billion in more debt to China,” said Simmons.
Privately, both White House and Republican aides say they would love to have a fight over the high-end tax cuts as a central 2012 campaign issue.
“It’s ultimately a question of whether Democrats believe their own rhetoric,” said one Senate GOP aide. “They seem to think that Americans are OK with raising taxes on small businesses. Republicans disagree and would love to debate that notion anytime.
“It’s an area where the GOP can hit the Democrats hard any day,” the GOP aide said.
But one Democratic strategist said that defending tax cuts for the wealthy will put 2012 candidates in a tough position with conservative, blue-collar primary voters.
“As a campaign issue it can play both ways — the GOP is more likely to be seen as the party of big money, big oil, big special interests, et cetera,” the strategist said. “So they would be in the position of again defending bonus tax cuts for millionaires and billionaires — not where you want to be message-wise in early primary states.”
CBS Money Watch – By Carla Fried
We finally know what will happen to the expiring Bush tax cuts — they won’t expire for another two years. In a compromise announced by President Obama last night, the Bush tax rates become the Obama tax rates for 2011 and 2012. And for everyone, not just families making less than $250,000. The compromise? The Republicans will agree to extend unemployment benefits for another 13 months and won’t demand that the $60 billion cost be offset by a cut in federal spending.
Not only did the wealthy get a two-year pass on their income tax rate, but they are also going to benefit from two other features of the compromise:
A one-year cut in the payroll tax: To make up for the loss of the expiring Making Work Pay tax credit — the middle-class tax cut that no one really noticed — the White House extracted a one-year reduction in the Social Security payroll tax paid by employees from 6.2 percent to 4.2 percent. What’s interesting is that Make Work Pay had an income limit: it was completely phased out for individuals making $95,000 or more, and joint filers with income above $190,000. The proposed 2011 payroll tax reduction apparently applies to everyone, at a reported cost of $120 billion in foregone tax revenue. That means an extra $2,172 in the 2011 paychecks for all Americans making at least $108,600, the current maximum amount of income subject to the FICA tax. The goal of this tax break is to give a jolt to the anemic economic recovery on the assumption that everyone — the middle class and the truly wealthy — will go out and spend that money.
A big break in the estate tax. When we last left off with the estate tax in 2009, it was being levied on estates above $3.5 million ($7 million for married couples) at a top rate of 45 percent. The estate tax has been on hiatus in 2010 and was scheduled to come roaring back next year at its 2001 level: a 55 percent tax on estates above $1 million. No one really expected that to happen, but the deal announced by President Obama sure seems like a huge capitulation to the Republicans. In fact, the President went out of his way in the press conference announcing the deal to clarify that he wasn’t too pleased with this outcome. The new estate tax rate will only be levied on estates over $5 million ($10 million for couples), and the 45 percent rate of 2009 dips to 35 percent for 2011 and 2012.
Assuming the framework of the deal announced Monday night makes its way through Congress, here’s what you can look forward to in 2011 and 2012 and some tips on how you should respond:
Income tax rates: Nothing changes from today. The top two tax brackets, which President Obama had vowed to raise, will instead remain at 33 percent and 35 percent. Even the millionaires and billionaires will see their tax rate hold steady, not just the middle class.
Strategy: As you would normally, if you have the option of deferring income (and thus, taxes) into next year, go for it. But pull as many deductions as possible into this year so you can benefit from those now. If you’ve converted a Roth retirement account this year, or plan to by year-end, it certainly makes sense to take advantage of the one-time tax deal being offered for 2010 conversions that allows you to spread the tax bill over the next two years.
Capital gains and dividend taxes: No change here, either. President Obama had wanted the current 15 percent rate to float up to 20 percent for wealthy Americans in the top two tax brackets. But the compromise keeps the rate at 15 percent for everyone.
Strategy: This increases the allure of dividend stocks even more for income-starved investors.
A “patch” for the Alternative Minimum Tax (AMT): A patch that will raise the AMT exemption to account for inflation has been agreed to. According to the New York Times, the threshold for the AMT will be adjusted so that as many as 21 million households would not be subject to it.
And what happens after 2012? Well, that’s going to make for some interesting debates during the 2012 Presidential election cycle. In announcing the compromise, President Obama pushed the notion that leaving rates where they are for the next two years was a necessary interim step to help spur more economic growth, but that long-term we had to make “hard choices.” If I were a federal employee, I’d be wondering why I was singled out as a sacrificial revenue lamb for 2011 and 2012. Last week the President announced a pay freeze for most federal employees. Yet today the word is that the rest of Americans, especially the uber-wealthy, won’t be asked to make any such sacrifice in 2011 and 2012. But long-term, if we don’t eventually bring in more revenues and start reining in the federal deficit, we are all going to be paying an enormous price.