Who Will Fight for Us?

The Deciders

We had a few days of excitement, and for some of us rising hopes that the Democrats–at least in the House–might actually fight back against the Obama-McConnell more money for the rich plan. This morning as I look around the web, I see that the corporate media is assuming that there will be no fight–that this outrageous “compromise” between President Obama and the Republicans is actually a good thing for Democrats.

At the WaPo, the message is the same as at the NYT–the deal is a fait accompli and House Dems aren’t going to put up a fight. In fact, it appears that the tax cut extension for the rich is no longer an issue at all. The only sticking point for House Dems is the estate tax rate.

For Democrats in both chambers, the most onerous provision in the package would exempt estates valued at up to $10 million from a newly imposed estate tax. House Speaker Nancy Pelosi (Calif.) has called the measure a giveaway to the wealthy and “a bridge too far,” given that Obama has abandoned his campaign pledge to allow the Bush tax breaks for wealthy households to expire.

“Most of us agree with almost all of what the president negotiated,” Rep. Chris Van Hollen (D-Md.) told “Fox News Sunday.” “There is one thing that just was the choking point, and that deals with the estate-tax break.”

But, he continued, “I am confident that when we get to January, there will be no tax increases on middle-income Americans. We’re not going to hold this thing up at the end of the day, but we do think that simple question should be put to the test.”

USA Today reports–perhaps sarcastically–that Obama will fight for us next year.

“I will be happy to see the Republicans test whether or not I’m itching for a fight on a whole range of issues,” Obama said last week. “I suspect they will find I am. And I think the American people will be on my side on a whole bunch of these fights.”


One of those fights will be over the very thing that some Democrats are angry about: The two-year extension of George W. Bush-era tax cuts for the nation’s wealthiest Americans.

“When they expire in two years, I will fight to end them,” Obama said. “Just as I suspect the Republican Party may fight to end the middle-class tax cuts that I’ve championed and that they’ve opposed.”


…Obama has said that without a deal the Bush tax cuts would expire and everyone would see their taxes rise, and “I want to make sure that the American people aren’t hurt because we’re having a political fight.”

That presumably comes next year.

“I’m looking forward to seeing them on the field of competition over the next two years,” Obama said.

But why should be believe the liar-in-chief? I don’t think even USA Today believes him.

The Hill reports that Steny Hoyer has other plans for next year. He hopes to work on deficit reduction, with the recommendations of Obama’s Catfood Commission “at the center of our national conversation.”

Hoyer said he was “heartened that the president’s bipartisan fiscal commission put forward a provocative, challenging plan on debt — a plan that needs to be at the center of our national conversation.”

He said the plan should be looked at, along with those by the Bipartisan Policy Center, Rep. Jan Schakowsky (D-Ill.) and the Center for American Progress.

As he has in the past, Hoyer stressed the need for entitlement reform, including reform of Social Security possibly by raising the retirement age and raising the cap on income taxes to pay for Social Security.

That sounds really ominous to me.

Now let’s look at some of the few naysayers who still think the President’s plan is wrongheaded.

Paul Krugman is still unhappy with the plan but he’s resigned to its passage by Congress.

The deal will, without question, give the economy a short-term boost. The prevailing view, as far as I can tell — and that includes within the Obama administration — is that this short-term boost is all we need. The deal, we’re told, will jump-start the economy; it will give a fragile recovery time to strengthen.

I say, block those metaphors. America’s economy isn’t a stalled car, nor is it an invalid who will soon return to health if he gets a bit more rest. Our problems are longer-term than either metaphor implies.

And bad metaphors make for bad policy. The idea that the economic engine is going to catch or the patient rise from his sickbed any day now encourages policy makers to settle for sloppy, short-term measures when the economy really needs well-designed, sustained support.

If you believe Krugman, we are headed for long-term economic turmoil with almost no efforts by the government to help people in need or to create jobs.

What the government should be doing in this situation is spending more while the private sector is spending less, supporting employment while those debts are paid down. And this government spending needs to be sustained: we’re not talking about a brief burst of aid; we’re talking about spending that lasts long enough for households to get their debts back under control. The original Obama stimulus wasn’t just too small; it was also much too short-lived, with much of the positive effect already gone.

Elizabeth Warren says we are still in a serious economic crisis. She can’t understand how anyone can believe the economy is recovering when so many American families are still in dire distress.

Wall Street banks reaping profits and paying bonuses while the rest of the country struggles shows “we still have a problem” with economic disparity, said Elizabeth Warren, the Obama administration adviser responsible for setting up the Consumer Financial Protection Bureau.

“This just staggers me; I mean, I just don’t have words to describe what this means,” she said in an interview for Bloomberg Television’s “Conversations With Judy Woodruff” that will be broadcast this weekend. “For me, what an economic recovery is about is about what happens to American families. It’s what happens in the real economy. It’s whether or not families are building up wealth in their homes or whether or not their homes are dragging them over an economic cliff.”

“It isn’t meaningful to talk about profits and a growing economy until American families are stabilized,” she said.

Former Reagan budget director David Stockman says unemployment is far worse than anyone is admitting.

At the rate the US economy is recovering, it will take 28 years to get back to where we were in December 2007 if something doesn’t change, David Stockman, former federal budget director under President Reagan, told CNBC Friday.

“When we look below the surface and the job outlook and the trend that we’ve been in, it’s a lot worse then people think,” Stockman said.

“The jobs that they count every month and people get excited about are really part-time jobs,” he said.

Now that we are in the “new normal,” it’s important to rebucket the data the Labor Department releases on the big picture of the 130 million jobs in the economy, Stockman said.

Take the middle class, Stockman said, which is at the heart of the economy—about 54 million jobs. This is everything you can think of in terms of bread-winner jobs. The annual median wage is $50,000.

“If we are going to have recovery, it has to happen here,” he said, adding, “we lost 7 million jobs in two-year downturn in the ‘Great Recession.”

Even a former supply-side guy like Stockman thinks the key to getting out of this depression (which is what it is) is getting back middle class jobs.

I’m not an economist, so I can’t discuss all this knowledgeably like Dakinikat can. But even I can see that this country is in deep deep trouble. Again, I have to ask: Who will fight for us? And when? What can we do to fight for ourselves?

Dkat here with an update from C-SPAN.

The Senate convenes today where they plan to resume consideration of The Middle Class Tax Relief Act of 2010 (H.R. 4853). Senate Majority Leader Harry Reid (D-NV) has scheduled a procedural vote for 3pm today to move forward on the measure, which includes an extension of unemployment benefits for the next 13 months in exchange for allowing tax cuts for all income levels to continue for another two years.

This vote is scheduled to be broadcast on C-SPAN 2.

UPDATE: Senate in session and voting right now. (Voting to move vote forward 2:00 cst)

UPDATE:  The cloture vote passed today. Some time tomorrow or Wednesday, the bill will come up for an up or down vote.  There were 15 votes against Cloture.

President Obama praised the Senate today for taking the important first step toward passing the controversial tax plan he hashed out with Republicans, a compromise bill which has angered many lawmakers inside his own party.

The bill still faces a tough fight in the House and the president “urged the House of Representatives to act quickly to similarly pass the bill.”

“I’m pleased to announce at this hour the U.S. Senate is moving forward on a package of tax cuts that has strong bipartisan support,” he said.

He said the bill “will grow the economy” and “grow jobs.”

The deal passed a procedural vote in the Senate this afternoon, and will come to a final vote later in the week — perhaps as early as Tuesday — before it is taken up by the House.

In a procedural vote, 83 senators voted in support of the legislation, which extends Bush-era tax cuts into the new year. Sixty votes were needed.

There were 15 votes against the bill.

30 Comments on “Who Will Fight for Us?”

  1. fiscalliberal says:

    You do not have to be a economist like Dak to figure out we are in trouble. There seems to be a total lack of understanding that you have to pay your bills. It started with Reagan. David Stockman has a excellent book: The “Triumph of Politics” where he describes as Reagans Budget Director he describes how Supply Side does not work and how Reagan talked a good game, but ran the deficit up. Then Clinton (and Newt Gingrich) brougt the deficit down to near zero.Then Dick Cheney said Reagan proved that Deficits do not matter and Bush ran the debt up and destroyed the economy with his wars of choice and absolute lack of financial regulation

    Now we have Obama (and his AG) continuing to run the deficit up, continue the war and not enforce the laws of the land regarding finance. Everyone in Congress is clueless in terms of the need to pay debts. This depression was not deep enought to teach people that debt will destroy you. Ask all the people loosing their houses.

    • dakinikat says:

      Bruce Bartlett has turned on Supply Side economics too. All the economist architects–except Laffer–have turned on it because the empirical evidence shows the opposite of what it’s supposed to do.

      The only folks that cling to this are the ideologues in congress and the people they sell the snake oil to …

  2. Thursday's Child says:

    I was wondering, but didn’t want to ask, why Bernie Sanders didn’t save his filibuster for when the tax package is actually up for a vote (is that today?). Landrieu and the other guy (forget his name) would have helped him. Don’t know if that would have stopped it from being passed, but at least it would have disrupted the process of making that pile of crap law. But I felt we were f’d when I realized we were having a filibuster for show.

  3. fiscalliberal says:

    Just think – as Joe Scarbourogh said this morning, George Bush is at home watching Obama and Clinton pushing his Tax Cuts. I bet he is eating popcorn and smiling

  4. Minkoff Minx says:

    Well, to hear from Bernie Goldberg, on O’Reilly tonight, he is doing a story about why we should start appreciating the wealthy and thanking the rich people. Now, I don’t know what will be said, but not only rich people watch fox. There are plenty of poor people in my neck of the woods that swear by fox. I just wanted to mention it, cause I sure as hell can’t understand why it always is that the rich get richer, and the poor/struggling middle classes, get the shaft. (And I have been on the other side…when my husband was a big executive VP on Wall St. and BTW I still felt this way then too.)

  5. catarina says:

    Sometimes I fear for Elizabeth Warren’s safety.

    Just read on Politico-Obama called Mitch McConnell “Mike.”
    Jesus help us.

  6. Fannie says:

    I just read where women still facing glass celing in 2010…….


    • dakinikat says:

      Yup, I was going to write something about this and about the derivatives market today, but stuff is happening so I had to put it on the backburner. Thx!!

  7. dakinikat says:

    update: It’s 2:45 right now cst

    Senate is currently voting to move forward on the tax plan. The count is 51-5 with 60 need required for cloture.

  8. Minkoff Minx says:

    I see they are taking their time with the vote…Oh, and did you hear this:

    Bernard Madoff Won't Attend Son's Funeral | NBC New York

    No one has claimed Madoff’s body.

  9. paper doll says:

    isn’t it amazing how fast they can work when it’s rain making for the wealthy?In congress time it was but a nanosecond….so fast, that vote has friction burns.