The Nation: Obama Caves on Tax Cuts

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Ari Berman is a contributing writer for The Nation magazine and an Investigative Journalism Fellow at The Nation Institute.

During the 2008 presidential campaign, Barack Obama said over and over that he was running to "put an end to the Bush-McCain philosophy." Campaigning in Colorado just days before the election, Obama clearly stated his opposition to Bush-era economic policies and ridiculed the idea that "we should give more and more to millionaires and billionaires and hope that it trickles down on everybody else. It's a philosophy that gives tax breaks to wealthy CEOs and to corporations that ship jobs overseas while hundreds of thousands of jobs are disappearing here at home."

Now Obama, in a blatant reversal, is preparing to do just that, agreeing to extend the Bush tax cuts for the wealthy, which my colleague Chris Hayes accurately calls the "single defining domestic policy of W."

In 2008, Obama presented himself as a clean break from the Bush and Clinton dynasties and a fresh face for the nation and the world. Yet once in office he packed his White House with holdovers from the Bush and Clinton administrations and continued or even accelerated key Bush-era policies, whether in the realm of counterterrorism, Afghanistan or offshore drilling. The latest "compromise" on the Bush tax cuts, extending the upper-income tax cuts for two years in exchange for the continuation of unemployment benefits, is simply the latest in a series of capitulations from the Obama White House.

Obama and Congressional Democrats bungled the tax debate from the start, even though it was clearly a winning issue for the president and his party. Even though everyone knew the Bush tax cuts were set to expire at the end of this year, Democrats failed to develop an overall strategy for this issue last summer or force a vote in the Congress before the election -- at a time when even Republicans like John Boehner said they'd vote to extend only the middle-class tax cuts if that was their only option. Yet Democrats refused to put the GOP on the spot or talk about the tax cuts during the campaign, blurring what should have been a core distinction between the parties; Democrats for the middle class, Republicans for the rich. As former Ohio Governor Ted Strickland said recently: "If we can't win that argument we might as well just fold up."

Once Democrats finally decided to vote on only the middle-class tax cuts, last week, Republicans had all the momentum and the issue had become mere political theater. Even as Congress was voting on the Democrats' plan, Obama signaled to Republicans that a more favorable deal was just around the corner, giving the GOP no incentive to side with Democrats. The Obama administration's posture on the tax cuts is eerily similar to its stance on the public option during healthcare reform -- the president says he wants the policy, but does absolutely nothing to fight for it, either through his own bully pulpit or on Capitol Hill. Last week, Organizing for America asked Obama supporters to phone bank in support of the DREAM Act, repealing "don't ask, don't tell," and a pay freeze for federal workers (yet another concession to the GOP), but did nothing on the tax front.

So now Obama is planning to spend $60 billion a year on tax cuts for millionaires and billionaires rather than, for example, a national infrastructure plan that would rebuild America and put people back to work. It's hard to see how the president will benefit either politically or substantively from this latest reversal of policy -- caving on the tax cuts will only embolden GOP leaders, who already see Obama as weak and unprincipled, and will further deflate restless Democratic activists and Obama supporters. If this is how Obama plans to govern in the future, we're in for a rough next two years.

UPDATE: Five major progressive groups--MoveOn, Democracy for America, TrueMajority, Credo Action and the Progressive Campaign Change Committee--are now urging the Senate not to ratify the imminent Obama deal. Says DFA chair Jim Dean: "Voters - and activists - are not buying the notion that tax cuts for high income earners are the only path to extending the middle class tax-cuts. As for any Democratic members of Congress who are going along with extending the tax cuts for high income earners -- this is the stuff that primaries are made of."