Louisville Courier Journal Editorial Bemoans POTUS Barack Obama's "White Flag". I Prefer To Call It: CAPITULATION. Republicans Win!

Obama's white flag

President Obama says that the tentative deal he worked out with congressional Republicans on taxes is “not perfect.” For that, he deserves an award for understatement of the year — but not much else.

Far from perfect, the accord is deplorable. For starters, it's not really a deal at all — it's closer to abject surrender to the Republicans.

The problem isn't an absence of praiseworthy elements in the arrangement. They exist. Extending Bush-era tax cuts for middle- and lower-income people for two years and lowering payroll taxes for all workers for a year will pump badly needed money into the retail economy and help families meet basic needs and lower their levels of debt. A 13-month extension of jobless benefits to unemployed Americans will alleviate hardship during the holiday season and next year. There are other features that are generally useful — continuation of some college-tuition tax credits, new cost write-offs to encourage businesses to expand, adjustment of the alternative minimum tax to decrease exposure to those rates and expansion of the earned-income tax credit.

To prevent a threatened Republican filibuster in the Senate, however, the President felt compelled to agree to continue Bush tax cuts for households making more than $250,000 a year and to cut a deal on federal estate taxes that provides an exemption of $5 million per person and sets a maximum rate of just 35 percent.

Yielding on these points represents a complete retreat from positions Mr. Obama took while running a victorious presidential campaign, and they are an affront to the principles of many of his strongest supporters.

In the aftermath of the announcement of the deal, it was left to Democrats on Capitol Hill to provide the backbone that the President lacked. Sen. Mary Landrieu, D-La., a conservative, lashed out at “the nonsensicalness and the almost, you know, moral corruptness” of providing tax cuts even for people making more than a million dollars a year. House Speaker Nancy Pelosi condemned the estate-tax deal as one that will add about $25 billion to the deficit while benefitting only 39,000 of America's richest families.

Furthermore, the bargain doesn't even make good tactical sense for the President. By agreeing to extend the tax cuts for two years — instead of for one or three years — he ensured that the same argument will be back as a political football during a presidential election year. And if compromise was necessary, surely he could have insisted on some sort of higher cutoff for tax breaks for the wealthy — such as raising the threshold from $250,000 to $500,000 or $1 million. What rationale exists for giving Wall Street multi-millionaires — some of whom triggered the economic crisis and received taxpayer bailouts — continued tax cuts during a time of soaring deficits and national debt?

Mr. Obama said that he isn't prepared to let middle-class households get hit with higher tax bills because of the impasse over tax rates for the wealthy. But a tougher political leader would have let the deadline approach and forced the Republicans to justify letting all the tax cuts expire and allowing jobless benefits to run out because of their insistence that the interests of the rich be given top priority. For good measure, such a president could have pointed out the chasm between GOP insistence on lower taxes for the wealthy and their phony posturing as deficit hawks.

Perhaps congressional Democrats can derail a bad deal, though that's a longshot. But whatever happens in Congress, it's clear that the President must regroup and find the resolve to fight for core values against a bullying and obstructionist Republican opposition.

Otherwise, it's going to be a very long two years.