Anyone who expected the deal to keep tax rates from rising to sail through Congress and to the President’s desk may be in for a big surprise.
The deal, announced earlier this week to keep tax rates from rising for another two years, is under fire from the left and from the right.
Liberals, who claim to support an extension of the current tax rates for all but the so-called “wealthiest Americans,” are angry that the legislation the Senate will take up next week includes what they regard as “tax cuts for the rich.” Never mind that it’s not really a “tax cut” – just an extension of the current rates for two years. And never mind that, as they controlled the Congress for the last four years, that they could have passed a temporary or permanent extension of the tax rates for low- and middle-income families any time they wanted. The sad truth is that they want the rates to go up on everyone. [Read 10 Things You Didn't Know About the Bush Tax Cuts.]
Democrats in the House have gone on record opposing the deal, saying they may not even bring it up unless substantial changes are made, something MoveOn.org called a “huge breakthrough and a sign of real momentum for progressives.”
“Progressive members of Congress have been saying the phones are ringing off the hook with calls opposing the deal, and a growing number of Democrats are voicing their opposition, calling the deal ‘grossly unfair’ and ‘fiscally irresponsible,’" the group said in an E-mail Thursday.
But the deal is also attracting fire, surprisingly, from the right–which is complaining for a whole bunch of reasons.
TeaPartyPatriots.org, the largest and most effective of the Tea Party organizations, calls the tax deal “problematic” and says it “is a deal that needs to be opposed.” And columnist Charles Krauthammer wrote Friday that rather than being a victory for the GOP, that “Barack Obama won the great tax-cut showdown of 2010.”
“In the deal struck this week, the president negotiated the biggest stimulus in American history, larger than his $814 billion 2009 stimulus package. It will pump a trillion borrowed Chinese dollars into the U.S. economy over the next two years - which just happen to be the two years of the run-up to the next presidential election. This is a defeat?” Krauthammer asked.
There’s a lot in the deal to like–and there’s a lot not to like. The question now is which coalition–the coalition composed of those who like or the coalition of those who don’t--is bigger. It may just be that, like George H.W. Bush’s 1990 tax hike, that the left and the right together in opposition may be able to overcome the support for the deal that the center seems to have embraced. We’ll know next week, when the Senate votes.