Diary

Despite Orszag's Urging, President Obama Refuses to Meet John Boehner in the Middle on Tax Cuts

“Genuine bipartisanship assumes an honest process of give-and-take, and that the quality of the compromise is measured by how well it serves some agreed-upon goal, whether better schools or lower deficits. This in turn assumes that the majority … negotiate in good faith.”

Sounds fair enough, right?  This is actually an excerpt from President Obama’s book, “The Audacity of Hope”.  While campaigning for office, Obama led many to believe that he was going to “unite” America.  We were a country that was more partisan than ever, and it was his prerogative to change that.  According to his book, proof in the excerpt above, he believes that compromise and give-and-take are the hallmarks of this change. I like that. It makes sense. Well said Mr. President! Which then bears the question, where is this cooperation that you so eloquently spoke of?

Now, to be quite fair, Republicans haven’t been all that enthused about working with Democrats either. Not, mind you, because they are Democrats, but because the ideas that they have put forth violate the conservative principles Republican believe is the correct course to get us back on the path to growth

Nevertheless, it appears we have finally, finally found some common ground. Republicans have been fighting for a permanent extension of the Bush tax cuts for everyone . President Obama, in a too little too late attempt to appear fiscally responsible (or is it really just a continuation of social engineering?) decided that he is going to draw the line on continuing tax cuts for the top earners.

So John Boehner conceded. He backed down from demands of permanence and agreed to extend the tax cuts for only two years. Long enough to help propel us out of the crisis but short enough that it wouldn’t have the long-term negative budgetary effects that the President decries.

Peter Orszag, former White House budget director and one of President Obama’s top advisers, was the first to float the idea of a two-year extension. In a column for the New York Times Orszag wrote that

This month, the Senate will be debating an issue with significant implications for both — what to do about the Bush-era tax cuts scheduled to expire at the end of the year.

In the face of the dueling deficits, the best approach is a compromise: extend the tax cuts for two years and then end them altogether

Compromise. There’s that word again. But the former budget director had reasons for allowing the cuts to remain beyond bipartisanship. He argued that “no one wants to make an already stagnating jobs market worse over the next year or two, which is exactly what would happen if the cuts expire as planned.” Orszag explained that higher taxes “now would crimp consumer spending, further depressing the already inadequate demand” for goods.

A reasoned response from a liberal thinker. Tax cuts aren’t usually his cup of tea, but given the dire situation of our economy he is willing to concede to a temporary extension of the pro-growth tax cuts.

Sadly the day after Orszag’s column, the New York Times posted a story entitled “Obama is Against a Compromise on Bush Tax Cuts.” Our president expressed his unwillingness to follow John Boehner to take a step toward the middle. Rather than shed his partisan pride and give an inch, President Obama has decided, even in the face of arguments by one of his former top economic advisers, to stick to his guns. He argues that the nation can no longer afford the cuts (ironically enough on the same day he formally announced $50 billion in new stimulus). Sadly he is wrong. As Orszag and conservative economists argue, the economy can’t afford not to extend the tax cuts.

Apparently Orszag was wrong when he said “no one wants to make an already stagnating jobs market worse.” In his decision to never compromise, Obama does.

by Brandon Greife, Political Director (hat tip Reiley Hooper)