It’s been one of those weeks in Washington. Just a few days ago, it appeared the tax deal between the president and Senate Republican leader Mitch McConnell had broken the lame-duck session logjam, resolving the stickiest problem and paving the way for late-session action on issues like DADT and START.
Now votes on the tax deal have been pushed into next week amidst a resolution of disapproval by House Democrats, and the DADT repeal has lost a key Senate floor vote once again.
It’s hard to say whether the President’s very early signals that he’d be willing to strike a deal to avoid the expiration of Bush’s tax cuts made the ultimate liberal backlash more understandable or puzzling. The only surprises in the final deal were the inclusion of a payroll tax holiday, the one stimulative proposal with significant support in both parties; extension of the enhanced EITC and child tax credits created in the 2009 stimulus package, a total concession to Democrats; and revisions in the resurrected federal estate tax—which didn’t exist in this calendar year—to create lower rates and higher exclusions than was the case before the Bush tax cuts first took place.
Some progressives (though not many) profess to oppose the payroll tax holiday on grounds that it’s part of a collateral attack on Social Security. Some also express moral outrage over the proposed estate tax concessions, pointing out (quite properly) that they will have zero positive impact on investment and growth. But the main complaint is that Obama never really went to the mats to defend the consensus Democratic opposition to high-end Bush tax cuts and their extension, and the main beef seems to be retroactive as much as prospective.
The tax-deal rebellion reflects gradually building liberal anger towards the Obama administration on topics ranging from the public option in health care to the unwillingness to pursue prosecution of Bush administration figures over civil liberties violations and treatment of terrorism suspects; the expansion of the U.S. troop commitment in Afghanistan; and above all, the President’s continuing protestations of bipartisanship. Furious injunctions to the president to “fight” for progressive principles, regardless of the legislative consequences, have spread far beyond the blogosphere to a wide array of congressional Democrats.
What’s unclear at the moment is whether the House Democratic action represented just a symbolic measure that won’t get in the way of House approval of the tax deal next week, or a more serious protest that will require some sort of modifications in the package that progressives can claim as a trophy. The latter contingency, of course, will give conservative Republicans a new excuse to walk away from the package and try to impose their own tax policies in the next Congress with their enhanced numbers.
In any event, the intra-Democratic rhetoric has grown so strong that it’s revived the immediate-post-election chattering classes talk about a primary challenge to Obama in 2012, with journalist Robert Kuttner being the most outspoken about dumping Obama lest he become the “Democrats’ Hoover,” and with anyone who defends the tax deal getting a lot of heat as a sell-out.
The most certain thing about the tax deal is that it has obliterated the attention that was being given to the Bowles-Simpson commission report and a variety of other deficit reduction proposals, even as the two parties appeared poised to approve measures that would create added deficits in the neighborhood of a trillion dollars. The lack of resistance (so far) by Tea Party Movement figures is as good a sign as any that its alleged total focus on debts and deficits is, like that of the Republican Party it dominates, a mirage that quickly fades once high-end tax cuts are on the table.
In other words, deficit-talk seems most useful in Washington as a way for partisans to excoriate their opponents’ priorities—i.e., the Democratic resistance to “entitlement reform” and the Republican resistance to progressive taxation and restrained defense spending. Actual concern on the topic, however, is harder to find, even at the end of a year where it’s rarely out of the headlines.
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