“Obama Announces ‘Framework’ for Deal With Congress to Extend Bush-Era Tax Cuts.” That was the lead headline at this morning’s FoxNews website. It’s an eye-grabber, for sure.
The article explained that the "framework" outlined on Monday evening by President Obama calls for a two-year extension of the Bush tax cuts in all income brackets. Yes, all of them. Even the rate on the estate tax—the centerpiece of Democratic Party class-warfare rhetoric—would be renewed; in fact, at a slightly lower rate than during the Bush administration.
For Obama, this is a clear compromise with Republicans, one that liberals in his own party will not like, and, in fact, are condemning. For that matter, Obama himself did not seem pleased, announcing his decision with a discernible degree of discomfort, signaling a change dictated more by politics than personal ideology. Nonetheless, it was a significant shift.
"I have no doubt that everyone will find something in this compromise that they don't like," stated Obama, but "we cannot play politics at a time when the American people are looking for us to solve problems."
That’s a very telling statement. Obama explained that allowing taxes to increase on all Americans—no matter what income bracket—would have a negative effect on the economy.
Of course, it would. That’s common sense, basic economics. But to witness Barack Obama saying so is stunning, a jolting concession completely contrary to what Obama argued not only throughout his first two years as president but during the presidential campaign. I’ll never forget the moment during one of the presidential debates when John McCain looked at Obama and said incredulously (I’m paraphrasing), “I can’t believe you’d want to raise taxes on anybody during a recession!”
Indeed. And yet, Obama persisted with that message—until now, apparently.
I’m surprised, and pleased.
Just a couple weeks ago, I was interviewed by NPR. The reporter asked my opinion of how Obama had managed to lose his gigantic liberal majority in the House of Representatives. I responded that Obama had governed from the far left. Why? Because that’s what he believes. Further, I argued, if Obama were not such a leftist ideologue, he would have learned from Bill Clinton and compromised with Republicans months before the November 2010 election, when the political writing was on the wall—when it was clear he was facing a political tsunami that would cost him and his party Congress, one poised to wipe out his rising “progressive” agenda.
Alas, I assured the reporter, Obama didn’t do that, and wouldn’t do that going forward, because he’s a man of the far left, incapable of governing from the middle like Bill Clinton. He is no Bill Clinton.
The reporter asked where I’d advise Obama to compromise. I pointed to extending the Bush tax cuts. “But he won’t,” I predicted. “Again, he’s no Bill Clinton.”
Well, it looks Barack Obama may have just done a Bill Clinton.
Of course, if he was truly an astute politician—never mind someone who truly understood economic freedom—Obama would have made this move months ago, possibly saving his congressional majority, or, at least, not losing so many seats. Better late than never, I guess. If I were a Democrat, I’d be furious at Obama for being so politically tone-deaf.
As for Republicans, set to assume majority control of the House in January, they are understandably happy. John Boehner, incoming House speaker, remarked: "It’s encouraging that the White House is now willing to stop all of the job-killing tax hikes scheduled for January 1. We look forward to discussing this proposal with House Republican members and the American people."
The Democrats are shell-shocked. Congressman Peter Welch of Vermont bitterly lunged for the class-warfare playbook: "We oppose acceding to Republican demands to extend the Bush tax cuts to millionaires and billionaires." In a fuming letter to the leader of the liberal faithful, outgoing House Speaker Nancy Pelosi, who in just two years dynamited the Democrats’ massive majority, Welch insisted that Obama “should not back down”—“nor should we."
The Democrats’ Senate leader, Harry Reid, is scrambling, telling the press only that he and his colleagues would “caucus tomorrow" to discuss their president’s action.
A political fight will now ensue. Make no mistake, however: this is a seismic shift at the White House, at least politically.
It could be Bill Clinton (1994) all over again. Barack Obama’s move should not only help the economy dramatically, and spare taxpayers more ludicrous levels of obscene taxation to bail out a profligate federal government, but, in the end, it could save his presidency.