Politics & Policy

A Capitulation on Taxes

President Obama bows to reality.

The Bush tax cuts exist in the liberal imagination somewhere in a ring of hell between “torture” and the Iraq War.

For Pres. Barack Obama to endorse their across-the-board extension is a betrayal on par with getting John Yoo’s advice on interrogation policy or bringing back Don Rumsfeld as secretary of defense. In deed, if not in word, Obama will refudiate a decade’s worth of Democratic rhetoric about the unaffordable, ineffectual, and unjust Bush tax cuts.

News that Obama and the Republicans were on the verge of a deal to extend all the tax cuts temporarily came on the heels of painfully futile Democratic votes in Congress to extend them only for households making less than $250,000. Massachusetts senator John Kerry maintained on Meet the Press that Obama wasn’t caving, minutes after Minority Leader Mitch McConnell — apparently better plugged in with the White House than the former Democratic presidential candidate — signaled a compromise.

#ad#On taxes, it’s as if Obama is saying, “Let’s put away childish things,” even as his party and his own base demonstrate their incorrigible attachment to the childish.

For all the pounding Democrats have administered to the Bush tax cuts through the years, they embrace most of them. The total estimated cost of the tax cuts over the next 10 years is $3.7 trillion. In extending them for everyone making less than $250,000, Democrats wanted to keep a full $3 trillion worth. They weren’t so much against the Bush tax cuts as three-quarters in favor of them.

Everything they said about the unacceptable cost of the Bush cuts applied more to the portion they wanted to extend than to the portion they wanted to let expire. Is the statement “$3 trillion > $700 billion” really that complicated? So eager were Democrats to extend the cuts they liked that they exempted them from congressional rules requiring countervailing tax increases or spending cuts.

Democrats could have gotten this partial extension easily if they had acted earlier this year, before moderate Democrats sensed the brewing anti-Democratic tide and before the “recovery summer” stalled out. They dithered, distracted by semi-nationalizing health care and passing incomprehensible financial regulations. Now their tactical fecklessness is forcing a liberal president to accept, for the time being, one of the most hated domestic initiatives of his predecessor.

For Democrats, the cuts on the upper end are a grotesquerie. For them, letting people — especially rich people — keep their income is a favor granted by a government that has a presumptive right to their earnings. For them, “investment” is always a euphemism for government spending and never a risky activity undertaken by people who respond to incentives, including tax rates.

It’s a sign of the passion with which Democrats hold these views that they wanted to act on them even during a tenuous, jobless recovery. In one of the last great acts of reverse bipartisanship of the Pelosi-Reid regime, the leaders of the House and the Senate engineered partial extension votes that split their party; 20 House Democrats and 5 Senate Democrats voted with the Republicans.

It may turn out that Obama considers going down in a blaze of glory as admirable only from afar. It is one thing for Nancy Pelosi to lose her speakership in a fit of foolhardy courage; it’s quite another for him to do the same with his presidency. Since the election, Obama has endorsed an earmark ban and a federal pay freeze, finalized a trade deal with South Korea that will require a bipartisan coalition to pass, and executed a humbling capitulation on the Bush tax cuts.

All of these acts either separated him from elements of his congressional party or angered his base, or both. The tax-cut bargain is the most significant, but it’s also bowing to the inevitable. Whether it’s the beginning of a trend or an anomaly will define the rest of his term.

— Rich Lowry is editor of National Review. He can be reached via e-mail, comments.lowry@nationalreview.com. © 2010 by King Features Syndicate.

Rich Lowry is the editor of National Review. He can be reached via email: comments.lowry@nationalreview.com. 

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