Legal Commentary

Tax Policy Will Drive Fiscal Policy

By Big Tent Democrat

While I have previously written about what Obama can do as President (especially regarding tax cuts), there are of course things he can not do alone. Ezra Klein focuses on a couple of them - extending UI benefits and raising the debt ceiling (Obama can block tax cuts for the rich):

Getting rid of the tax cuts for the rich is not as important as extending unemployment benefits or protecting the Affordable Care Act. [. . .] The right outcome here is not the end of the tax cuts for the rich, though that might be nice. It's an extension of unemployment insurance and an increase in the debt ceiling. Democrats shouldn't vote with Republicans to extend the tax cuts -- which is, of course, the only way the tax cuts can be extended -- unless Republicans will simultaneously vote with them to extend UI and lift the debt ceiling.

This is a TERRIBLE idea. Ezra seems to think that the $700 billion given up for tax cuts for the rich will not be taken out of programs for the less well off down the line. It is an old problem with Beltway bloggers - they never understand how important tax policy is. It is why they have spent the past 2 years denigrating the Clinton tax plan of 1993 and pretending the ACA was the greatest progressive achievement in a generation. UI extension is of course critical, but this is a matter of political bargaining imo. Tax cuts for the rich is too high a price. As for the debt ceiling extension, I can see trading THAT now (it is in the GOP's interest that it happen now, not in February contrary to Ezra's bizarre belief to the contrary) in exchange for extending UI benefits. Ezra seems to think raising the debt ceiling now should be a Dem priority. That makes no sense. Does the GOP REALLY want to shut down the government in February, 2 months into their control of the House? No way.

Speaking for me only

Full post as published by TalkLeft on November 19, 2010 (boomark / email).