A Compromise That Must Pass
A presumptive compromise on the extension of Bush era tax rates and other issues struck between President Barack Obama and the emerging Republicans in Congress signals a definitive change in political course from what we’ve seen over the past couple of years.
First, it’s obvious that the midterm elections truly were substantive and not simply ceremonial. The nation opted for a different direction plotted by the president, soon-to-be former Speaker of the House Nancy Pelosi and Senate Majority Leader Harry Reid. That’s a given.
But what also was apparent was the precipitous drop in political capital the president enjoyed. His inauguration in January 2009 was met with great fanfare and burgeoning support of a majority of Americans. The luster remained until the reality of running a nation instead of running a campaign reared its head.
There are missed opportunities contributing to the diminishment of President Obama’s status.
The promise of closing Guantanamo Bay remains unfulfilled. The announcement of a drawdown and cessation of military offenses in Iraq was countered with an escalation of troops and commitment in Afghanistan.
The inordinate and unprecedented amount of spending and bailouts really divided the nation.
The meteoric rise of our deficit to almost $1.5 trillion shook even the most strident of fiscal liberals to the core. Our debt and deficits are spiraling out of control.
Unemployment is hovering just under 10 percent and doesn’t appear to be heading downward.
The limp and milquetoast response from the Obama administration to the WikiLeaks fiasco drew fire from many, even friends of the administration.
The saber-rattling by North Korea without a defined response, even as ordnance was being lobbed at our ally South Korea, caused some to question the president’s relevance in Asian foreign relations. The fact it’s in one of the most volatile areas of the world doesn’t help either.
Taken together, it’s clear the president has made decisions alienating some – many – who once ardently supported him.
It’s rare to see such a dramatic push back from those in your own party as we are seeing with the debate on the Bush tax rate extensions. As of this writing, there has been an effort by Senate Democrats to kill the compromise. The attempt by some left-leaning Senate Democrats to vote down the measure is one thing, but the vitriolic tone in opposition to Obama on this issue is uncomfortable, to say the least. U.S. Sen. Bernie Sanders and U.S. Rep. Anthony Weiner have relentlessly criticized the president for agreeing to “go from zero to compromise in 3.5 seconds.”
But the president did not appear to shrink from the criticism. He passionately defended his compromise by saying some in his party simply wanted to reflect “political purity” and they were “sanctimonious” in their blind rejection of a deal.
This type of intra-party exchange rarely happens, and when it does, only behind closed doors.
The reality is this compromise must pass. It will ensure a freeze on tax hikes on Americans for two years, including income, capital gains and dividend. This allows business administrators to update their withholding tables and get payroll out to employees expediently and accurately. This agreement also will allow businesses a 100 percent business write-off on equipment for a year, and there will be a 2 percent reduction in payroll taxes.
But the inheritance tax will live again. The adjusted rate on taxes your beneficiaries must pay will be 35 percent, as opposed to the previous 55 percent. I think it’s more of a moral question than one of rate. Is it moral for a government to tax your beneficiary when you have already paid taxes on the money in the first place? The short answer is no.
So, yes, this compromise does have some objectionable content, but it’s far from a deal-killer.
If the compromise brokered by the president and House of Representatives is signed into law, there should be a cheer emanating from all corners of the nation. It will show that the oft-invoked but rarely realized objective of bipartisan effort will have a specific and profoundly positive impact on taxpayers, regardless of political association.