Ed Schultz of MSNBC had his shorts in a knot last night. He wanted the President to “fight” and “hang tough” on negotiations with Republicans over the extension of the Bush tax cuts. Schultz may not have noticed that the Senate failed on Saturday to vote for the specific policy proposal he favored. Nor did his angry guest, Sen. Bernie Saunders of Vermont, who also seems not to have noticed last month’s election results.
To be clear. The Republicans are wrong on the merits. They maintain that given the weak economy, it is the wrong time to raise taxes on the wealthy, that the tax increase would adversely affect small businesses that create the most jobs. The fact that the Republicans are essentially lying was proven on the Senate when they rejected a different compromise that would have extended the tax cuts for anyone making less than $1 million per year. If you are a small business and you are earning, net taxable income, $1 million per year, your business may be small but you are way past rich enough to be doing hiring.
Of course, what President Obama proposed did include a tax cut for zillionaires, but only on the first $250,000 of income. After that, the rate went up to the – oh, my God, - rates that the wealthy paid during the Clinton years, which as memory serves, were pretty good economic times especially for the well-to-do. If the Republicans wanted to stimulate the economy and create more jobs, there are plenty of better, more effective, ways to do that. But, they dug in their heels and, most importantly, every time I have seen a Republican member of Congress on the television the last month, they have repeated the same mantra: Now is no time to raise taxes on small businesses. Every time, the same mantra. It may be a lie, but after awhile, people believe what they hear.
There are other issues that goofie lefties like Schultz ignore. The Republicans have blocked an extension of unemployment benefits as well, and as part of the current compromise on tax cuts, they have agreed to extend unemployment benefits. Had this compromise not been reached, real people in real trouble would be hurting. Mr. Schultz can nurse his anger in a warm MSNBC studio and in the warmth of the limousine that drives him to work. His desire to “fight” was unlikely to secure the benefits for the unemployed that they need. In a related development, President Obama secured a one-year cut in payroll taxes that will do more to stimulate hiring than any tax cut for the super-rich, and, lest anyone forget, stimulating the economy is what this exercise is all about.
There is one other political fact that Schultz not only ignores, he also has exhibited the past couple of months. While Republicans were relentlessly on message, he has been all over the place. He has done nothing to change the debate on tax policy to something that might appeal to people. He just repeats the old leftie mantras that, alas, did not carry the day in November. None of the Democrats who lost in the midterms lost because they were not liberal enough. As E.J. Dionne suggested yesterday, the Democrats need to find a new approach to the tax issue because what they have now doesn’t sell but I don’t think our friends at MSNBC are likely to be forthcoming with new ideas.
One of the trickiest challenges facing the President in the next two years is deciding when and how to compromise with congressional Republicans. Here is a good rule of thumb: If you can denominate the difference between the two sides, that is where you look for compromise. To wit, the GOP wanted the tax cuts for the rich extended forever and the Democrats wanted them ended, so they compromised on a two year extension. Anytime you can express the difference between the two sides in numerical terms, that is the kind of issue on which you compromise. On a principle, say, no you can’t repeal the health care bill, there should be no compromise.
I suppose people like Ed Schultz and the House Progressive Caucus will make Obama’s re-election bid easier. By articulating their out-sized and out-of-touch ambitions, acceptable in 100% safe Democratic districts in the Bay Area, Massachusetts, and a few other locales, they show Obama to be positively moderate by comparison. But, until liberals shake off their own stale orthodoxies and begin finding new ways to address the outstanding socio-economic issues of the day, they deserve to be in the minority. And, there is no doubt the President was right to strike a deal.