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The Political Fights the President Chooses

Laurence Lewis

When a president tells Congressional members of his own party that his presidency depends on a bill's passage, said president is holding back nothing. He is laying himself bare. That President Obama reportedly did so for the extension of the Bush tax cuts, the first-ever reduction in Social Security funding, and but a year's worth of unemployment benefits, reveals his political desperation. It also puts the lie to the claim often made by some of the president's most ardent defenders that he is at the mercy of a broken Congress, that a president can't or shouldn't interpose in the process of legislating. A president can and should, and every president has. And this president does. As he just did. Now, for this bill.

This bill is not the saviour of the Obama presidency. It could be the beginning of its end. From the day of the inauguration, if any single bill was going to have the greatest impact on the success or failure of the Obama presidency, it was going to come early and it was going to be on the economy. Not this bill. The stimulus bill. The president's first opportunity to do something about the disaster he inherited from Bush and Reagan and Milton Friedman. That was when he should have used every means at his disposal to enact what would come to define his first, and possibly only, term in office. He was enormously popular. His predecessor was enormously unpopular. People were scared. They knew something fundamental was broken. They were ready for transformational change. They believed in change. They had the audacity of hope.

President Obama is not stupid and he is not weak. But President Obama also is not an economist, and the very smart economists he hired to try to cobble together a recovery package are not liberal. They are neoliberal. And by now we all should know that in politics a neo-ideology is a political con. The president had alternatives. The same few economists who had predicted the economic meltdown warned that the Obama stimulus was inadequate, that it would help prevent things from getting worse, but it wouldn't make things significantly better. The president could have used his popularity, his rare ability to move the public, the bully pulpit, and the available economic data to fight for a larger stimulus. He could have called Democratic members of Congress and told them that his presidency and many of their careers depended on their enacting a larger stimulus. He could have tried as if his career, their careers, and the future of this nation and this world were on the line.

Had the Democrats enacted a larger stimulus, we wouldn't be where we are today. Unemployment would be lower. We would be in a recovery that extends beyond Wall Street. Democrats would have had an agenda on which to run, and a Republican Party already on the verge of extinction would have had nowhere to run. Democrats wouldn't be so desperate to fund unemployment benefits that they are at risk of selling their political souls. The president wouldn't have been pleading with members of his own party to extend, perhaps indefinitely, one of the worst of the countless mistakes made by Bush. The president's approval rating would not bring his most ardent supporters false comfort when it has plateaued in what is traditionally deemed to be the danger zone below 50 percent.

The polls show support for the Obama tax package, but however much the bill's supporters tout them, the polls aren't really relevant. The polls show that a lot more people want to get rid of the top bracket tax cuts than want the package that includes them. Did the president try to make the case that the future of his presidency depends on passing the middle-class tax cuts without the high-end cuts? Did he try to make the case that his presidency depends on extending unemployment benefits by themselves, decoupled from tax cuts, as they should be? Did he tell Congressional leaders to remain in session as long as it takes to get middle-class tax cuts and unemployment benefits, and that if the middle class, the poor, and the unemployed don't get to enjoy their holidays neither should Congress? Would the public have rallied behind a president taking such a stand? We will never know. The president picks his fights. His more ardent defenders cannot credibly claim that it isn't his job to push legislation. He didn't fight for a public option, but he did fight for the final health insurance bill. He didn't fight for the stimulus we needed, but he is fighting for a bill that could spell the political doom of both him and his party.

There is so much wrong with the Obama tax plan that perhaps the worst single aspect is not getting the attention it deserves. The corporatist media dutifully pay little attention to it, and the polls therefore reflect little public awareness of it. And it's only a political paradigm shift of such magnitude as potentially to change the very nature of the Democratic Party. A week and a half ago, Ryan Grim explained:

Obama, as part of the Democratic package, secured a roughly 30 percent cut in the payroll tax, from 6.2 to 4.2 percent. Allowing it to expire in a year will mean that workers will see a nearly 50 percent jump in payroll taxes as the rate reverts back -- an event that will surely be described as a tax hike. The cut is estimated to cost $120 billion per year.

Democrats have never allowed the rate to be cut, even temporarily, in the history of the program, because payroll taxes feed the Social Security trust fund and create the political base of support for the program, said Nancy Altman, author of "The Battle For Social Security", a history of the program, and head of the advocacy group Social Security Works. Republicans have won a long-sought victory, even as President Obama hails it as a win for his party.

Republicans acknowledged that the expiration of the tax holiday will be treated as a tax increase. "Once something like this goes into place, a year from now, when it expires, it'll be portrayed as a tax increase," said Sen. Bob Corker (R-Tenn.). So in a body like Congress, precedents matter and this is setting a precedent. I think that certainly is going to create some problems down the road if it passes."

Filling the gap from the general fund is a temporary fix, but with the president himself buying into deficit worries, even as the economy screams for more robust Keynesian stimulus, and with a Republican House less than a month away, we all know that the temporary fix, unlike the tax cuts themselves, will in fact be temporary. So, the Obama tax plan carves a hole in Social Security funding, and with the president's Catfood Commission already having recommended cuts in benefits, the way this plays out is obvious. The president didn't fight the Republicans when he had a Democratic Congress, so it's not realistic or pragmatic to expect him to fight them when they control the House. And by passing the Obama tax plan, the majority of Congressional Democrats have joined him in what may turn out to be the beginning of the end of the New Deal. And a very credible Congressman says the president was on the phone to House Democrats telling them that his presidency depended on the bill's passage. The president may have been right. But not the way he thought. Because much more than his presidency is on the line and under open political assault; and in an unprecedented move, he and Congressional Democrats have just ceded them critical ground.

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