Previously, I reported the startling news - by Banksy
Previously, I reported the startling news - Obama to Change Party. That was satire, at least on November 14. Just three weeks later, satire becomes reality. In the past few days, President Obama has traded away $620 billion in tax revenues in order to get a $56 billion, 13 month extension of unemployment benefits. Of course, the lost $620 billion will make any further unemployment benefits, or for that matter, any other productive social programs pipe dreams as the deficit explodes over the next two years. (Image: Banksy)
The Obama deal is a long way from the original position of ending Bush tax cuts for the highest earners and simply extending unemployment benefits, as called for by economic and social circumstances.
It started when President Obama sent his vice president to negotiate with Republican leaders on Capitol Hill. Since the president still has a majority in both chambers of Congress, you might wonder why he's negotiating. The House Democrats are ready to rock to show that they're not to blame for the past two years of inaction. There are enough Democratic Senators with either the inclination or the compromised background to strong arm a majority.
If Obama has forgotten how Chicago politics work, he could certainly find someone from the windy city to show him how it's done. Edward ("fast Eddie") Vrdolyak has some free time on his hands for a consulting gig.
So why did Obama come up with such a ridiculous deal? The outcome was an extension of unemployment in return for a two year continuation of the Bush era tax cuts.
"Lieberman noted that as part of the deal that extends the Bush-era tax rates for all income brackets, Democrats got a 13-month extension of unemployment benefits, a payroll tax cut and extensions of the childcare tax credit and the college tuition tax credit." The Hill, Dec. 7- Advertisement -
The finances are ugly if you're a budget balancing president who demands revenue neutral legislation. The Obama deal will cost $500 billion in lost revenues as a result of extending the Bush tax cuts, $120 billion in lost payroll taxes (dropping from 6.2% to 4.2% for employees/employers); and $56 billion to extend unemployment for 13 months.
During the Reagan years, David Stockman and his crew slashed away at taxes in hopes of starving programs like Social Security and Federal discretionary spending on social welfare and health programs for the poor. Obama has joined the cult of Reaganomics. Why is this surprise? He spoke glowingly of Reagan during the primaries.
Here's how bad it is
Here's what Louisiana Senator Mary Landrieu said about the deal. Landrieu is a conservative Southern Democrat with big energy agenda. She represents a very conservative state. Even she knows this deal is a disaster.
"He's enthusiastic about this new arrangement dealing with the Republican caucus that stated, according to their leader, their number one objective is to unseat him. I can understand trying to appeal to independent voters. I do that myself. I think it's very important. But this sort of enthusiasm for caucusing with Republicans -" and he didn't even, literally, didn't even speak to the Democratic caucus. Not any of it. Not the liberal group, not the moderate group, not the conservative group," said Landrieu. Senate Democrats Openly Upset with Tax Cut Deal
When Mary Landrieu opposes your strategy on tax cuts for the rich, you know you've gone too far. But Obama is just doing his job, the one he signed up for - an elegant, charming functionary for the ruling class who could fool people just long enough to allow the Bush bailout looting to continue in full force.
The Real Obama - The Real Money Party
If you're still surprised at Obama's betrayal, it's time to expand your horizons and see the facts. He's a made man in The Money Party. For those with an empirically justified cynical attitude, this all makes sense.
Obama was a blank slate when he took up his campaign for change in the primaries. He faced a daunting task. He had to defeat the standard bearer for the Clinton clan, Hillary, the future undiplomatic Secretary of State. How do you do that? Make a deal.
Obama's primary campaign relied on huge anti-Bush sentiment and a well run internet fund raising operation. He also relied on bundling - the gathering of maximum individual contributions by bundlers inside major corporations and industry groups.