A Bad Deal All Around?
Posted: December 9, 2010 Filed under: Democratic Politics, Elections, Surreality | Tags: Barack Obama, Bush tax cuts, Joe Biden, Paul Krugman, Suzanne Malveaux 31 Comments
Putting on a happy face?
Maybe the rebellion of House Democrats will rescue President Obama from himself. Paul Krugman has looked at the numbers and concludes that the tax cut deal may provide some stimulus to the economy, but in the end it will likely hurt Obama’s chances of reelection in 2012. (Thanks to Dakinikat for pointing me to Krugman’s post.) Krugman writes:
Look at the Zandi estimates: they show a boost to the economy in 2011, which is then given back in 2012. So growth is actually slower in 2012 than it would be without the deal.
Now, what we know from lots of political economy research — Larry Bartels is my guru on this — is that presidential elections depend, not on the state of the economy, but on whether things are getting better or worse in the year or so before the election. The unemployment rate in October 1984 was almost the same as the rate in October 1980 — but Carter was thrown out by voters who saw things getting worse, while for Reagan it was morning in America.
Put these two observations together — and what you get is that the tax-cut deal makes Obama’s reelection less likely. Let me repeat: the tax cut deal makes Obama less likely to win in 2012.
Krugman concludes that because the stimulative parts of the bill–the unemployment extension and the cuts in payroll taxes–will expire after about a year, the economy will improve temporarily in 2011 and then go downhill before the 2012 election:
Won’t that put the Dems in a desperate position? Won’t Obama be strongly tempted to make further big concessions to get something to boost the economy for another year?
Um…is the Pope Catholic? Does a bear sh*t in the woods?
A “deal” that, due to its structure, will likely hurt the President’s re-election prospects and sets up future political battles in which the President will have an even weaker negotiating hand is simply not a good deal. There is no way to not see this as a huge political and policy win for the GOP. . . after all, their big “concession” to Obama was a payroll tax cut–a Republican idea to begin with.
Suzanne Malveaux has an interesting article up at CNN on the White House reaction to the House uprising.
The White House is putting on a brave face in the midst of a congressional revolt, led by its own party, against the president’s tax-cut deal.
In the latest move by angry Democrats, House lawmakers are refusing to bring Obama’s controversial tax bill to the floor. As some political observers saw all legislative hell breaking out, the White House continued to make painstaking efforts to paint a rosy picture.
She concludes the piece by suggesting that Obama and Biden may have eaten crow at their weekly lunch today.
I can’t help it. I’m getting my hopes up that this rebellion is more than kabuki. I’m just a born optimist.
The Detroit Free Press quotes John Conyers:
“We refuse to allow the well-being of the nation to be held hostage by those who promote the interests of millionaires and billionaires,” Conyers said today. “This truly is a fight for the heart and soul of the Democratic Party and our great country.”
But the White House is determined to save the “compromise” agreement:
It was unclear how much of the deal would have to change to meet House approval, but – with the agreement expected to be acted on soon in the Senate – Gibbs made it clear that the White House is open to change only if it’s agreeable to all parties. In the meantime, it has been gathering statements of support from across the nation, including those from Detroit Mayor Dave Bing and Michigan Gov. Jennifer Granholm.
“If we don’t get something done this year I think everyone will be blamed,” Gibbs said.
Is it possible that House Democrats really mean it this time? Is it possible that Obama might back down if he realizes the economy will hurt his reelection chances if this bill passes?
peej
Carissa
ecocatwoman
mablue2
peggysue22
quixote
skydancingguestblogger
Mona (aka Wonk the Vote)
Sky Dancing 
House and Senate on collision course after House rejects tax cut bill
I was rather surprised by Mark Zandi’s numbers actually. I figured it would be less than that, but when we talked about it, I thought you brought up a good point. The money could be more effective in other places.
Anything would be more effective than borrowing money to give to millionaires, wouldn’t it?
It seems to me if the bill passes, a lot of constituents are going to be angry about the millionaires getting so much money. Haven’t they already gotten enough? When will it be time to focus directly on jobs rather than just using Reagan trickle down methods?
Standoff on tax-cuts extension puts Schumer, Obama at odds
I am up suffering, this cold is getting worse, and I just saw this over at Washington Post:
Meanwhile, OT if I may, DADT repeal went down in flames.
Moments later Joe Lieberman announced he and Susan Collins and Udall will introduce a stand-alone DADT repeal “perhaps today.”
A person’s head could spin right off his neck trying to keep up!
Sorry – forgot the link.
http://tpmdc.talkingpointsmemo.com/2010/12/the-long-shot-last-ditch-effort-to-repeal-dont-ask-dont-tell.php
Well, if it goes down in flames than we’ll just have to see how concerned about the GLBT Obama really his because he can still remove it with a small stroke of his pen.
I hope they do it. They do have the 60 votes from what I’ve read. It went down because of something Reid did about amendments.
Lieberman seems quite committed to see this through so, who knows at this point?
Well, Speaker Pelosi tweeted the House will go for it. (Maybe she likes being a hero rather than the bad cop for a change)
I’ve been saying for two years it should be a stand-alone bill.
With love,
Cassandra
I suppose we can always blame it on a retrograde Mercury.
I had a big crush on the 1968 Mercury Cougar.
I’m still attached to my aunt’s 64 1/2 mustang that was reworked as my car in highschool by my very kewl dad. RED. RAG TOP. BLACK LEATHER interior. Number 156 off the assembly line.
Sweet!!
Do you still have it?
Nope, unfortunately my dad sold it when he sold the dealership. He pulled it back and put it on the show floor after it became worth a lot of money. I really regret I didn’t get more aggressive about making him give it back to me.
I used to have a 1969 Mercury Cougar. It was amazing.
Wow, I went and cooked dinner and did some laundry and look at all the stuff going on. I have to catch up.
This should be fun anyway. Mike Gravel is thinking about mounting a primary challenge to Obama.
and my fav
http://www.youtube.com/watch?v=bA2LgJviH9w&feature=channel
I love that guy!
Me too. I loved the one he did where he just stares into the camera.
It actually made a lot of sense to me. I read in his expression, ‘What the heck are you people doing and how did you screw things up this badly?’
White House will include extension of tax breaks on ethanol in bill.
That is such a bad policy. They could use silage and garbage instead. It doesn’t save energy and it takes farmland out of food production. Blech!
What a crappy tax deal. I hope the dems continue to oppose it.
OT: Sad day for me. Today is the one year anniversary of the death of my adorable little avatar. 😦
So sad to hear that. These anniversaries are always hard.
Thx, Luna.
It’s hard to believe it’s been a whole year. I just took up her food mat and bowls yesterday.
I called the WH today, spoke with an actual human who was attentive and immediately grasped what I was saying (no actual tax cut for individual taxpayers earning $20K or less and for families earning $40K or less, many public employees who pay into non-SocSec pensions funds will all have tax increases. The issue of paying for SocSec being paid from gen’l funds giving Repubs a hook to call it a welfare program and that cuts must be made. Unfairness of 25% of tax cuts going to top 1% of taxpayers. No real stimulus from giving the rich even more money; actually less investment in business when their taxes are so low. Maybe some other things.).
I then called the Democratic National Committee (lack of time to make all the calls to my reps) where the reaction was veiled hostility and ho-hum. Whassup with that?
Oh– WH direct number for president was busy, but I got in through the switchboard number.
WH 202 456-1111, WH switchboard 202 456-1414
DNC 202 863-8000
Senate switchboard 202 224-3121
House switchboard 202 225-1772
If anyone will listen to us….
WH, lawmakers clear way for tax cut bill passage
Kabuki theater is too irresistible for the politicians in Washington.
AJC has a summary of the Tax Deal here:
Summary of Tax Deal | Jamie Dupree Washington Insider