Eh. I’ve changed my mind. [UPDATED, twice!]
I want to remove the post I posted this afternoon called “Harry Reid Throws Down the Gauntlet In Front of … Obama. Hurray.” I think Reid has done exactly that, and I think he’ll play a much larger role in the debt ceiling debate and other fiscal-policy debates going forward, as will the other Dem senators. Obama will have to get Reid’s approval before he caves on anything major. And I don’t think Reid will approve of any major cave. So it doesn’t matter that much whether Obama wants to cave. What matters is the extent to which Reid will let him cave.
The main point of my post was to say that the pol/pundit/news-analysis crowd seems to have missed this. But in my post, I also said I’m glad that the agreement was reached, and gave my reasons why I thought it was better than going over the cliff. I said I was concerned about the effect of failing to extend unemployment insurance, and some other things. And, although I didn’t say this in my post, I think Boehner would not have allowed an up-or-down vote on the $250,000 income-tax-hike floor, so some compromise probably would have come about then anyway.
But I’ve changed my mind–or, rather, I’m just not sure–that going over the cliff would not have gotten a better result on the Bush tax cuts. So … apologies to my hero. I agree with Paul Krugman, after all.
Whew. A return to normalcy.
That said, I don’t think this deal is the end on the issue of the permanence of the Bush tax hikes. I think that during the upcoming debt ceiling controversy, the public will come to realize that important expenditures will have to be cut, or the deficit reduced less, because of the loss of revenue as a result of the failure to end those tax cuts except for those with incomes above $450,000, and the failure to lower the estate tax floor (a real travesty).
But while Obama can’t seem to articulate this with any specificity or clarity, others–including Elizabeth Warren–in the new Senate will, I think. The public is paying attention. And Obama is no longer the only Democratic game in town. A recognition of this is what’s been missing from most of the commentary and analysis. But the next two years, and the 2014 campaign, will be playing out on a Dem-policy home field. The Republicans lost the home-field advantage when they lost the election.
To borrow a line from Ann Romney, it’s our turn now.
Should I leave the earlier post, or remove it, readers?
UPDATE: Oh, no! I’ve changed my mind again! I just read Matthew Yglesias’s take on all this, and he agrees with my first post. (Okay, my first post agrees with his take; he posted first.) And he’s completely convinced me that I was right the first time.
So, now the question is: Should I remove this post? OMG. This cliff thing is really stressing me out.
The good news, now that I’ve changed my mind again, is that Yglesias thinks Krugman agrees with my first post, not my second one.
SECOND UPDATE: Wow. A consensus is developing. I was right the first time!
Seriously, E. J. Dionne posted the definitive column on this. He’s right. This is a significant start to a progressive future. That was my immediate reaction. And it’s my final one.
this post makes less sense if you remove the previous one..
They are linked as a duet now…:)
One thing I have not seen from Krugman is that Obama really wanted to keep his promise to not raise taxes on income below $250K. Somehow he thinks that provides enough revenue. He was wrong to make the promise, he should have changed his mind, but he has followed the course he set over 4 years ago.
The end of the Politico article describes the ending that we probably would have seen under ANY bill passed by Harry Reid’s Senate: “After a frantic day that seemed likely to end with no deal, Boehner gave his members a choice. . . . kill the bill — and leave them shouldering all of the blame for the largest tax hike in American history. Or they could vote up or down on the Senate bill. They chose the latter.” Reid did not need 89 Senators to create this situation for Boehner. Thus, I conclude that Obama compromised more than necessary.
A duet? Uh-oh. Guess you’ve never heard me sing. Or try to.
well, i dont know about anyone else, but i feel sorry for all those millionaires who had their deaths shifted from January to December to save millions on estate taxes unnecessarily…
the democrats certainly could have made sure their deaths were justified…
That’s true, PJR. And, clearly, a comfortable majority of the public supports a return to Clinton-era tax-rates for incomes over $250,000. The election results and the private polls that have been polling on that issue make that clear.
But it was only the compromise in this bill that got the Senate Repubs to agree. Without the compromise and the surprisingly strong (if grudging) support for it by Senate Repubs, Boehner et al. would have opted not to bring it to a vote. And without a similar compromise next week or whenever, Boehner might not have done opted even then to bring it to a vote. It’s hard not to think that, with the stock market crashing and whatever else, the Dems wouldn’t have been pretty much forced to compromise. It always depended on whether Boehner would bring any Senate bill to an up-or-down vote. And he may well have been able to push off some blame on the Dems for not being willing to compromise; the pressure to compromise somewhat–despite the unpopularity of the Repubs’ position–might have been intense.
And the bottom line, in my opinion, is that this is only the beginning of Dem dominance on fiscal-policy issues. The public now understands what the Repubs are really all about. Game over.
No. don’t break up the set.
I’m not too concerned about $250K vs $400K, since I don’t take the deficit nonsense seriously.
I’m much more concerned that SS and medicare be protected, and we certainly can’t count on B. Hoover Obama to take care of that for us.
Still quite worried.
Ah. True, true, rjs. But some of them might return now. Don’t people like that use cryonics?
Jazz, I think the argument is ridiculous that higher taxes on the wealthy must be met with higher spending reductions. It should be pointed out that, actually, the reverse is true–that is, the lower the floor for the raised tax rates, the smaller–not the larger–the decrease in so-called entitlements. Pointing that out means less political pressure to cut SS and Medicare. If the goal is deficit reduction rather than entitlement reduction for its own sake, then higher taxes on more of the wealthy would allow less reduction in SS and Medicare. And that, I think, is what the next election will be about.
“…..and leave them shouldering all of the blame for the largest tax hike in American history.” as quoted by PJR from Politico.
This is media obfuscation. The fact is that Reid et al should now be given proper credit for terminating, finally, the biggest tax give away to the wealthiest minute fraction of our citizenry in recent history. It’s not a hike upwards when it was supposed to have been built in to the original Bush tax changes at that time. It’s a return to a reasonably moderate tax structure. One plays into the Republican rhetoric by choosing to use their frame of reference rather than the facts of the matter.
matt stoller has Eight Corporate Subsidies in the Fiscal Cliff Bill, From Goldman Sachs to Disney to NASCAR at naked capitalism…
and Kay McDonald at Big Picture Agriculture explains what’s wrong with the milk cliff fix…
Details, details, it’s all in the fine print. If you don’t read the two links posted by rjs, above, you can’t truly comprehend what tax legislation is all about. It now becomes clear to me why, for example, good old Chuck Schumer was so up front and center in the last week or two. What the individual wealthy tax payer may have to giveth, the corporate pirate taketh away. It is good to see that at least small portion of the wealthy may come to recognize that even their personal financial interests are subject to trade in favor of corporate interests. It would be interesting to know what the over lap of $400,000 income with corporate profit there is. I’m guessing that most high ,but not sky high, income tax payers are professionals such as doctors and lawyers who are expendable in the skirmish between personal wealth and the nation.
I soooo agree with you, Jack, about the absurdity of the phraseology. Reid, of course, was able to reverse the perverse only partly. But he’s still a hero, in my opinion.
As for Schumer, I;m not sure what role he played in any of it.
Beverly I agree that Reid looks good, given what we know. Re Social Security benefits, for example, he came through. Obama/Biden ended up compromising more than Reid wanted. And, I think, more than necessary. They could have gotten more, close to what Reid sought, although certainly not what Obama proposed when the talks began (seems like ages ago).
How much power Reid has is in no small part going to be related to which rules the Senate adopts this session.
If he doesn’t bring an end to the current voting rules, it’s evidence that nothing has changed.
there is a chart here that you should all see…