Deal or No Deal?

The tax deal that President Obama recently made with Republicans breezed through the Senate by a vote of 81-19. It now heads to the House, where its fate is somewhat uncertain. Politicians on both sides of the aisle have criticized the deal, each obviously for different reasons. Some conservatives feel that it did not go far enough with the tax cuts, failing to make them permanent. Among those in this group are 2012 presidential contenders Mitt Romney, Sarah Palin, and Mike Huckabee. Many liberals oppose the deal because they are against extending tax cuts for the wealthiest Americans, believing instead that those cuts should be allowed to expire so that the federal government can collect more tax revenue.

For those not aware, the Bush tax cuts are scheduled to expire on December 31st. President Obama knows full well that allowing those cuts to expire will be disastrous for the American economy. Allowing taxes to go up will bring consumer spending down. It will also force small businesses to lay off workers rather than create new jobs, thus driving the already high rate of unemployment up even further. Essentially, the expiration of the tax cuts will result in a double dip recession, something which the President needs to avoid if he is to have any hope of being re-elected in 2012. He knows this better than anyone, and that is why he compromised his principles to cut the deal with Republicans.

President Obama has made it well known that he is fully against extending the tax cuts for the wealthiest Americans, defined as those earning at least $250,000 per year. But Senate Republicans made it quite clear that they will not allow any tax cuts to be extended without including the wealthiest Americans. Since the Democrats lack a filibuster-proof majority in the Senate, Obama had no choice but to meet with Republicans and work out a deal. For him, it was a choice of the lesser of two evils. He could have held his ground, drawn a line in the sand, and allowed the cuts to expire. The problem with that is he would have shouldered most of the blame for the rise in taxes and termination of federal unemployment benefits. The fact that Christmas is coming only makes things worse, for many Americans would have most certainly depicted him as The Grinch. America would have then fallen into another recession, and the President would be the one who'd have to answer for it.

It's so easy for liberals like Bill Maher to criticize the President for making the tax deal. Maher said that Obama was weak, and that when he voted for him in 2008 he "thought he was getting Suge Knight, not Wayne Brady." Ha ha. Very funny, Mr. Maher. But let's face it: if it was Maher's rear end sitting in the Oval Office instead of Obama's, then his view would change dramatically. It's easy to tell someone to hold their ground when you're not ultimately the one who is going to have to face the consequences. If those tax cuts expire, no one is going to blame Bill Maher. They will blame President Obama, and rightly so since he is the leader of our country.

I firmly believe that President Obama did what he had to do. He had absolutely no choice in this matter. The Republicans held all the cards, and Obama was thus forced to meet them halfway. Although he sounded somewhat subdued when he announced the deal, he really shouldn't feel that way. Through the tax deal, I believe that he is essentially getting another stimulus package from Congress that may well pull the economy out of recession. Should that happen, then he can take credit for it and use that as his main argument in campaigning for re-election. By now, you must be shaking your head and asking yourself, "Is Dr. Right actually defending the president?" Well...not really. I am merely stating that he had no choice in this matter, and that anyone on the left who criticizes him for the deal would have done the same thing if they were in his shoes.

So now, will the deal get done? I don't know. You have both conservatives and liberals (though mostly liberals) in the House who are not happy about the deal, and they're ready to do everything they can to kill it. I honestly can't understand why they would want to do that at this point. The deal did not make the tax cuts permanent. It merely extended them until 2012, ensuring that they will be a hotly-contested topic during the next election. Why then would you want to hurt the American people during the most difficult economic period since the Great Depression? If the cuts were permanent, then I might understand why they would want to dig in and get ready for a long, hard-fought battle. But even the disputed estate tax, which Democrats want to raise by returning it to 2009 levels, is not a valid reason to kill this deal. Those pondering this move may want to think again before they act.

This is one of the few times when you'll hear me disagreeing with several of my colleagues on the right. I think the deal is a good one, because it's a win-win for all parties involved. The middle class gets their tax cuts extended, the upper class gets their tax cuts extended, small businesses will be able to keep their employees and hopefully hire new ones, and the unemployed can still qualify for federal benefits for at least another full year. Who then can possibly complain? I am not at all upset about the cuts not being made permanent. We have to be realistic, and that simply isn't going to happen unless a conservative wins the White House in 2012. Even then, Republicans would have to maintain their majority in the House and gain the majority in the Senate. The fact that the tax cuts will at least last through 2012 gives us hope of achieving this goal in the end.

So now the question for the House is this: "Deal or no deal?" President Obama has obviously pushed Nancy Pelosi to get the required votes to pass the bill. But as I write this blog post, several lawmakers have just decided that they want to bicker over procedural issues, forcing the vote to be delayed. With the tax deal stuck in limbo, what does that mean for us as Americans? To me, if the tax deal is not approved, then it would mean that those in the House who helped kill it will have committed the most egregious of acts toward the people they are supposed to serve. All of us, whether middle class or upper class, small business owners or unemployed, will suffer greatly. Our economy will suffer even worse. I am still holding out hope that the procedural wonks will save the day by working out a creative solution to this problem. If they don't, then 2011 will not be a good year...for anyone.