Playing With the Two Immutable Laws of Washington

There are two immutable laws of Washington, D.C. To understand the tax compromise in the Senate, you must know the laws.

  1. Politicians in leadership believe that if they make both the left and right angry they must have done something right; and,
  2. If Democrats and Republicans come together in a compromise — no matter how bad that compromise may be — the media will herald the compromise and inevitably use the word “tone” in discussing it.

Then there is a corollary to the two rules: people who want a seat at the table with the politicians and media will turn into sycophants and tell you how delicious the compromise tastes.

Understanding those two immutable rules and the corollary tell you all you’ll need to understand about how the tax compromise will be played. Let’s review what the compromise is:

  • Extend current tax rates for two years
  • Extend unemployment benefit for another 13 months
  • A two percent cut in the payroll tax for next year
  • Death tax of 35% imposed above $5 million

We can first laugh about Alan Simpson and Erskine Bowles. After all that work, lecturing, and lamenting they have been, in one act, put back under the rock from whence they came.

There will be no more hand wringing over saving social security and the deficit. We’re going to blow it up. Ironically, we’re going to blow it up to preserve today’s tax rates and resurrect the death tax.

Second, we can laugh at the Democrats who are in full meltdown over the Democrats daring to extend current tax rates for everyone. For all the left’s talk about equality over freedom, the left believes they can treat the most successful with the greatest disdain and take away the freedom to take risks in this country and replace it with servitude to government.


Had Obama shown any leadership, he could have gotten this passed months ago on the grounds that it’d help stem losses in the midterms. But he didn’t, despite pressure from many Blue Dogs who will, in less than a month, be called “former congressman.”

Just last week Mr. Obama said, in his weekly radio address, “I believe we can’t afford to borrow and spend another $700 billion on permanent tax cuts for millionaires and billionaires.” My what a difference a week makes.

Ultimately though, this is a compromise that leaves both sides coming up short and is full of compromising the GOP did not have to engage in, even without controlling the Senate. They could have gotten more. We will also continue subsidizing unemployment — yes you read that right. At some point it becomes welfare, not unemployment compensation.

The compromise does little to stem the tide of uncertainty that has kept businesses from hiring. Because the fight will be wrapped up in the politics of 2012, small businesses that have been keeping money on the sidelines will keep doing so. Any politician who says this has anything to do with job creation will largely be lying.

Nonetheless, we know this much is true: the media, after weeks of taking the Deficit Commission seriously, and many of the politicians who have done the same will celebrate this grand act of bipartisan comity.


For months, the Democrats have said they would never support extending the current tax rates because of their concern for the deficit. They will now.

For months, the GOP has said they would never vote to raise taxes and will now vote to raise taxes by resurrecting the death tax instead of killing it — the only reason being Jon Kyl (R-AZ) wanted to bring it back and has held this position for a while.

For months, both sides have claimed they were committed to saving social security. Instead, they will cut the payroll tax thereby bringing the bankruptcy of social security even closer.

We will know who the real conservatives are in Congress. They’ll be the Republicans who oppose this deal.

But hey, it is bipartisan!

Maybe we can get Jeff Flake to primary Jon Kyl . . .


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