The Republicans say that there will be no negotiations. They say that the Bush tax cuts must be extended for all income classes and many of them are pushing for the idea that the extension must be permanent. One might think that the President on behalf of the Democratic Party would insist on tax cuts for the middle class, but no tax cuts for those who earn more than $250,000. That after all is what he campaigned for and that has been a central argument of the Democratic Party: that is, the Republicans are shills for the rich.
Indeed moderate and liberal Democrats have been spoiling for precisely this fight. Instead of drawing a line in the sand, however, President Obama in an all too typical way has signalled his willingness to compromise creating the impression that he is wishy washy, that he is oblivious to the wishes of the American people (who overwhelmingly oppose extending the Bush tax cuts for the rich), that he fails to understand the necessity of strongly distinguishing the Democrats from the Republicans on this issue, and that he is prepared to join the Republicans in implementing enormously bad public policy. As has been much discussed, extending tax breaks for the wealthy will add approximately $200 billion over the next two years to the national debt and putting the money in their hands will do little to stimulate the national economy (since the wealthy unlike the middle class will not turn the money back into the consumer economy). Obama maintains that the Republicans will have to explain where the money will come from to fund this. It is hard to understand how this can possibly make sense. We redistribute wealth to the rich and cut $200 billion from the budget at a point when we badly need to creat jobs. No wonder moderate and liberal members of Congress are furious with the President.
Meanwhile Obama has spurred speculation about what his position will ultimately be. The initial speculation was that he will push to extend the tax cuts for two years. And Democrats are engaged in public negotiating with themselves. Senator Schumer, the representative from Wall Street (and the Senator from New York) suggests that the tax cuts be extended to all but those who make $1 million per year. Robert Reich suggests that the compromise should be at $500,000 per year (they are the top 1% of the wealthy; those who earn $250,00 are the next 1%). See here. If there must be a compromise, it seems to me that Reich's position is the next best place to draw a line in the sand. But Obama really should learn the basic negotiations principle that you do not negotiate with your self.
I voted for Obama and there were reasons to believe that he had a better chance of winning than Hilary Clinton. But is there anyone who thinks that she would have been such a weak-kneed negotiator. Not me.
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