I’m With Krauthammer

January 4th, 2011

Just catching up from the holidays and posting a few things I missed while gone.

This is from the aftermath of the tax deal.

While the Democrats were damning the president for giving up core principles and Republicans were crowing about the fact that they got their number one priority (tax cuts for the top 2%) by threatening to stop all legislative activity, (including benefits for 9-11 first responders and tax cuts for 98% of Americans) Fox News Commentator Charles Krauthammer wrote this piece, in which he called the tax cut deal a “really big win for the president.”

He cited some of the same reasons that I had given for arguing that it wasn’t such a bad deal for Obama, namely that Obama, in effect, tricked the Republicans into running short term deficits to stimulate the economy after they spent two years arguing that deficits were no good and very bad, even during a recession.

In a somewhat discordant note, Krauthammer noted that the deal “will add as much as 1 percent to gross domestic product and lower the unemployment rate by about 1.5 percentage points.”… Sounds good to me so far… but, he quickly added, ”that easily could be the difference between victory and defeat in 2012.”

For someone who spends their time writing and thinking about politics, that is a stunning statement to make. We’re in the greatest recession since the Great Depression, hiring has stagnated and we are debating a policy that you believe will add 1% to the GDP and lower unemployment by 1.5%… But you consider that a bad thing because Obama might get re-elected when more people have jobs? That’s positively Limbaugh-esque.

But I digress…Krauthammer followed this one up with another article in which he said that, if Obama is reelected, “historians will mark his comeback as beginning on Dec. 6, the day of the Great Tax Cut Deal of 2010.” There’s a lot of water that needs to pass under that bridge, but this may ultimately be true. If the economy comes back, Obama’s going to get the lionshare of the credit. The stimulus effectively built a floor under the economy and (we can hope) the new package will prime the pump for more private sector hiring to get this economy going.

All in all, Obama ends his 2nd year with a ton of challenges, but also a ton of accomplishments.

As I joked recently, Obama’s first two years have been a total failure:

  • preventing a Great Depression
  • stabilizing the US banking system
  • rescuing the American Auto Industry
  • equal pay for women
  • a children’s health care expansion
  • ending subsidies to corporate banks for college loans
  • a major national service program expansion
  • the largest federal investments in energy and education in the country’s history
  • the largest federal investments in infrastructure in the country’s history
  • health care for 30 million more Americans (which eluded progressive presidents for 70 years)
  • significant increases in assistance for veterans
  • repeal of Don’t Ask Don’t Tell
  • a new START Treaty with Russia

And even though the Democrats had historic losses in the House, his approval is still better than Reagan and Clinton at the same time in their presidencies.

and now comes the pivot to the center.

All this against the backdrop of a Republican Congress that ended the year explaining how some $17 billion in unemployment extensions during the worst recession since 1932 “need to be paid for” but $140 billion in tax cuts for the top 2% can just be added to the deficit.

As Krauthammer notes, soon after they voted for the tax deal,

Republicans began righteously protesting $8.3 billion of earmarks in Harry Reid’s omnibus spending bill. They seem not to understand how ridiculous this looks after having agreed to a Stimulus II that even by their own generous reckoning has 38 times as much spending as all these earmarks combined.

Hey, I’m all for ending earmarks. They’re symbolic of a broken process in which even the so called “fiscally conservative” bring home the goodies for their constituents. But let’s get real: they account for one half of one percent of the federal budget; and defeating a proposal that has $8.3 billion in earmarks with one hand while you increase the federal deficit by $900 billion with the other does not show “fiscal responsibility.”

As I noted before, the biggest short term benefit to this deal for Obama is to show how hypocritical the Republicans are when it comes to running deficits that benefit their core constituency (those in the upper income brackets).

At least on that point, I’m with Krauthammer.

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