What’s Plan B?

~ susie

Steve Benen asks:

I don’t mean this to sound snarky and this isn’t a rhetorical question; I’m genuinely interested in understanding the back-up strategy. When I posed this question yesterday to some Capitol Hill aides I know, they said they’d recommit to fighting even harder for the original Obama tax plan — permanent breaks for those under $250k, Clinton-era top rates for those above $250k. If/when this week’s compromise goes down, Republicans, they said, would likely cave and accept the Democratic approach. They’d be out of options — it’d be a choice between the Dem plan and higher taxes for everyone. Dems would regain the leverage they lost before the midterms.

And that could work. The plan came seven votes shy of 60 the other day, but when push comes to shove, maybe those seven additional votes would come together, and Dems would win this fight over taxes.

But what then? How would extended unemployment benefits pass for the millions of jobless Americans who need them? What happens to the economic stimulus? What’s the strategy for getting quick approval for an expanded earned-income tax credit and the continuation of a college-tuition tax credit? With almost no time left on the clock, after winning the fight on tax policy, is the plan to simply punt on New START ratification, DADT repeal, the DREAM Act, food safety, and health care for Ground Zero workers, hoping for the best in the next Congress?

I understand very well what opponents on the left want to do to the tax deal, and why. I’m less clear on what happens next.

Nice to know I’m not the only person who see’s Obama’s plan as a clear win for the jobless. Not many people seem to care — except the unemployed, of course. “Oh, we’ll take that up in January.”

January? They really have no idea how close to the edge people are living.

UPDATE: David Dayen’s response.

Published by susie

10 thoughts on “What’s Plan B?”

  1. Many people care about the unemployed. Many. To say otherwise is terribly unfair. However, is one year more of unemployment benefits (or two or three) worth losing your Social Security? Because that’s the plan. And it’s right on track.

    Their trick is to divide us. They may even repeal DADT to divide the gays from the women. Don’t fall for it. Most of us are one paycheck from where you are. We can’t sacrifice one group for another. We are in this together.

    Let all tax cuts expire. Extend unemployment benefits separately. Let the Repubs block it and suffer the consequences. If this thing passes now, you’ll be losing whatever you think you might be getting in short order with the Repubs in charge. It’s all a mirage.

  2. It was a trade off this time rather than a complete give away: we lose $400 billion in revenue by not taxing the uber-wealthy, and we gain $300 billion in new stimulus directed mostly at the long term unemployed. Taxing the rich could have paid for the stimulus and paid down the deficit, but we’ll just add this to our Chinese credit card and worry about the balance later. I still think we should just give them Texas and call it even.

  3. I care deeply about the unemployed. It affects my neighborhood and my quality of life. But I also think the president should have gotten a better deal. Why were 99ers like you left out? And wtf, Social Security?

  5. What can you really do when you are dealing with absolute gangsters who have no remorse in burning down your house or killing somebody in your family to get what they want? We are being ruled by organized crime syndicates with corporate charters.

    Read about these gangsters in the Ukraine and what they are willing to do. “Some [men] will rob you with a six-gun and some with a fountain pen.” – Woody Guthrie

    http://nataliaantonova.com/2010/12/04/kushchevskaya-massacre-why-it-happened/

  6. According to Yve Smith, the GOP made an unconditional demand to Obama (granted, of course) on not renewing a special bond program for states called Build America Bonds program (BABs). She sees it as their Hurry Up and Go Bankrupt Already — And Kill Your Unions ASAP plan the GOP has been working on for a long time.

    I hadn’t been aware of this program, but the implications are clear for states which do not have the ability to run deficits: Austerian Delights!

    Except for the knock on effects if a state actually goes belly up….

    I’d love input, evaluations from other readers here.

  8. Susie, guess whose taxes will actually INCREASE? Individuals earning below $20K and families earning below$40K. Obama sure knows how to kick people in the shins when they aren’t big earners.

    That’s a whole lot of people. Looks like many below the median US income will get the Barry touch on their wallets. Way to go, Obama. From NYTimes:

    The proposal does not include an extension of Mr. Obama’s signature tax cut, the Making Work Pay credit, which provided a credit of up to $400 for individuals and $800 for families of low and moderate income. Instead, the plan creates a one-year reduction in Social Security payroll taxes, which are generally levied on the first $106,800 of income. For an individual earning $110,000, that provision would reduce payroll taxes by $2,136.

    Although the $120 billion payroll tax reduction offers nearly twice the tax savings of the credit it replaces, it will nonetheless lead to higher tax bills for individuals with incomes below $20,000 and families that make less than $40,000. That is because their payroll tax savings are less than the $400 or $800 they will lose from the Making Work Pay credit.

    “It will come to a few dollars a week,” said Roberton Williams, an analyst at the nonpartisan Tax Policy Center, “but it is an increase.”

    But, wait! There’s more! If your’re not feeling sick to your stomach yet, this Obama/McConnell/Boehner plan will give even more money to the rich!

    … the tax benefits will flow most heavily to the highest earners, just as the original cuts did when they were passed in 2001 and 2003. At least a quarter of the tax savings will go to the wealthiest 1 percent of the population.
    SNIP
    The wealthiest Americans will also reap tax savings from the proposal’s plan to keep the cap on dividend and capital gains taxes at 15 percent, well below the highest rates on ordinary income.

    …. …good news for hedge fund managers and private equity investors, who appear to have withstood an effort to get them to pay more by eliminating a quirk in the tax code that allows most of their income to be taxed at just 15 percent.

    This is a pouring salt in the wounds of the poor and lower middle classes. Good grief, Charlie Brown! What’s wrong with this guy?

    Oh, yeah: All together now –“Because he’s a conservative!”

  9. I hate that Obama would not go to bat for those unemployed beyond 99 weeks. I hate that he increases taxes on the poor and lower middle class families. I hate that he coddles the Uberwealthy, the hedgies, the Republicans.

    I’m worried that he’s giving the Repubs things which will be very dangerous, such as the BABs issue.

    I can’t believe the Repubs would not have actually been moved to come around on unemployment comp. I can’t believe they wouldn’t even have finally settled for a higher estate tax, raising taxes on the Uberestwealthy.

    I never dreamed I would see this under a Democratic administration. I deeply fear what Obama will do with Repubs in his final two years.

    The only good thing is that some unemployed people will have some peace of mind for 13 months. Or the remainder of their 99 weeks….

  10. Re: BABs — I would think it’s even more necessary this coming year or so for many states. The layoffs are going to come like blizzards this January and February.

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