Pat Buchanan - The Making of a President

The Making of a President

Pat Buchanan
Dec. 10/2010

If the Pelosi-Reid liberals are in a hissy fit over the tax-cut deal negotiated by Barack Obama, they have only themselves to blame.

With their three-to-two majorities, Nancy Pelosi and Harry Reid could have forced the Republicans to vote again and again during the election for "tax cuts for the rich."

They never did. Now, what else could Obama do after his own party left him with lousy field position and the clock running out?

"He could have fought!" the left howls. "He could have told the Republicans, 'No way do I sign a bill that gives tax cuts to the rich.'"

Had Obama thrown down that gauntlet, Republicans would have blocked all action in the Senate until Dec. 31. The lame-duck session would have ended in deadlock. There would have been no extension of tax cuts for the middle class, no START treaty on nuclear weapons, no extension of unemployment benefits, no vote on the DREAM Act for amnesty for illegal aliens, no vote on "don't ask, don't tell."

Obama's defiance would have accomplished -- exactly nothing.

In January, a Republican House and more conservative Senate would have passed an extension of all the Bush tax cuts, and Obama would have had to veto the bill and let them all expire. The resulting tax surge would have caused chaos in the economy and been a disaster for the president who is supposed to be running the country.

But the Republicans would have caved, claims the left.

Don't bet on it. Mitch McConnell and the GOP senators know -- after what happened to Charlie Crist, Arlen Specter, Michael Bennett and Mike Castle -- that the retribution of the Tea Party is the threat they face, not the anger of Barack Obama.

Republicans won the battle because they were united. All 42 senators agreed nothing moves in Harry's house until the tax cuts are voted on. And they took that stand because they truly believe you do not raise taxes in a recession and because they were willing to let all the tax cuts expire on Jan. 1 rather than abandon a principled position.

If liberals thought the GOP would crack, Obama knew better.

And considering the deal he came out with, when he walked in with not even a small pair, his party should be congratulating him, not cussing him out.

True, the tax cuts are extended for all, even those earning more than $250,000. But only for two years. If liberals believe ending tax cuts for the rich is a winning issue, why are they screaming? They will have a chance to make that case in the middle of the 2012 election, when all the tax cuts will be up for renewal again.

On the estate taxes, Obama agreed to exempt the first $5 million for an individual and $10 million for a couple, and impose a 35 percent top tax rate.

This is a relief for small businessmen and farmers who want to deed all they have built up to their kids. This is a compromise between what the left wants and what some of us believe should happen: elimination of the estate tax.

Death taxes do not raise enough to justify the IRS agents working on them and the accountants and lawyers who spend careers helping seniors put together wills and trusts to protect wealth on which they have been paying taxes all their lives.

Obama also won a 13-month extension of unemployment benefits, twice what Democrats had pushed for.

Obama won a 30 percent cut in payroll taxes for workers in 2011. The Social Security tax falls from 6.2 percent of wages to 4.2 percent. This will put tens of billions in the pockets of consumers.

Businesses will be allowed to "expense" investments in equipment such as computers. This means they can write off the entire cost on their corporate income tax in the first year. This will spur job-creating new investment.

With this deal, Obama is conceding that the Pelosi-Reid stimulus approach did not work, that tax cuts must be tried to get the economy moving, that, for the next two years, he must make his deals with Republicans.

The Obama-McConnell pact is a recognition of reality and a sign of maturity.

In these negotiations, Obama acted like a president. He went in with a weak hand and came out with half the pot. He got something, where the Democrats now berating him got nothing.

If the left hasn't realized it yet, Obama has: Liberals have lost the country. The liberal hour is over in America and the West.

With these deals, however, comes one big problem. None of these tax cuts or spending hikes is paid for. A trillion dollars is being added to the long-term deficit and debt. And the plunge in the bond market is signaling that the money power thinks that the United States' credit rating is heading south.

The clock on the debt bomb has just been moved a few minutes closer to midnight.

Pat is completely wrong on a couple of points here, first there are no "tax cuts" in this bill - there is only an extension of the current tax rates. Second, extending these tax rates will cost NOTHING to the federal government. He really should know better than this.

That said, I actually hate to say this, but I agree with Pat on one thing... this is NOT a good deal for the Republicans. It does add billions because the extension of the unemployment benefits is not paid for. Not only that but it is now being said that the Democrats are trying to work into this deal an extension of the ethanol subsides, cash payments to wind and solar companies, and subsidies for energy-efficient appliances and mass-transit benefits for employees. None of these things are paid for, and none of them benefit the economy in any way. Not only that, but a mere 2 year extension of the current tax rates is not enough to actually stimulate additional economic activity on any significant scale as I have already stated here.

I think the Republicans should hold out for a better deal, or wait until the new congress is seated next year to craft a better deal for all Americans.

Yeah, it might take till January 3rd for them to get something that will benefit the economy.

But then there's those who would ask why the economy never took off with the current rates. Well.... business has tons of money they're sitting on. They have been doing OK in the last few months. But looming tax increases stifle business.

TexasBlue wrote:Yeah, it might take till January 3rd for them to get something that will benefit the economy.

But then there's those who would ask why the economy never took off with the current rates. Well.... business has tons of money they're sitting on. They have been doing OK in the last few months. But looming tax increases stifle business.

And it's not just looming tax increases. There are massive unknowns buried in the 2700 page "health care reform" bill that are just waiting to go off in business owners faces, as well as in the "finance reform" bill - you know, the one that did NOTHING about the two biggest culprits in our financial meltdown, Fannie and Freddie - these unknowns are also acting like an anchor on our economy.

Look, it's not like this is rocket science for crying out loud. Faced with uncertain tax and regulatory burdens (which costs businesses money to comply with), businesses are not going to take on more employees, even if they see a slight increase in the amount of business they are doing. Keeping the tax rates the same as they've been for the last decade is NOT going to stimulate business, particularly given the regulatory environment we are in right now. And we have no chance of changing the regulatory environment in any significant fashion for the next two years, because Democrats still hold the Senate and the White House.

Again... more regulations/taxes via those two bills.

Our European friends always wonder why we make a stink of this HC bill here. Something tells me that it's not even close to being as complicated as the Democrats made this bill (and stifling to boot).