There has been a deal made in the tax-cut debacle that has been going on since November. The Republicans will get their tax-cuts for the rich. The Democrats will get their extension of unemployment benefits. Also part of the deal are many other Obama tax cuts already in place from the stimulus in 2008, a payroll tax cut, and a slight increase in estate taxes.
From my personal view this is a colossal cave-in on President Obama's part. The Republicans are getting everything they want, the Democrats are getting some but not all of what they want. When you actually look at the entire deal it is actually quite a moderate deal. That is probably the main reason this deal will fail. The TEA Party Caucus has already announced that it plans to vote against the deal as long as the extension of unemployment benefits is kept in. The Liberal Caucus has said that as long as the tax cuts for the rich remain they will vote against the deal. The numbers have been crunched on the House side and if these two caucuses vote together the deal will fail by eight votes.
As far as the Senate goes, well the Senate is a mess. If anything passes the Senate it will be a miracle.
There have been many arguments over extending or ending both the tax cuts for the rich and the unemployment benefits. Conservatives believe that the tax cuts will pay for themselves and create a trickle down effect. Liberals believe that unemployment benefits help the economy better because people on these benefits will actually spend the money on the economy.
Now my two cents: I believe this to be a horrible miscalculations and cave-in for President Obama. Americans, in poll after poll, have said that they do not want the tax cuts extended again to the rich. There has never been any definitive proof that tax cuts for the rich help the economy. I believe it actually works in an opposite manner. The people that are rich are rich for a variety of reasons. The ones that actually earned the money are rich because they knew how to save their money and invest it properly. They do not throw it back into the economy, but when they do spend their money it is indulgences.
The benefits that unemployed people receive while they are without work typically do not save that money or invest. They throw it right back into the economy, whether it be on gas, food. However they spend the money it does find it's way into areas that spur job growth.
The Republicans for their part played this game perfectly. The Democrats had the stronger hand. The people backed their plan and yet somehow the Republicans managed to block an extension of the unemployment benefits and suddenly they had the upper hand and they played the hand and forced Obama's
One thing for certain for all the harping we have heard from the Republicans about Democrats spending us into the ground and the cries of our grandchildren's grandchildren paying for all this spending. This deal will make anything the Democrats did look like chump change.
Over the years we have heard the Democrats described as Tax and Spenders while the Republicans have been described as being the Fiscal Responsible ones. The odd thing about these names is that the facts, as is often, do not actually back up these claims. When the Democrats are in charge spending drops and the deficit drops. When Republicans are in charge spending rises as does the deficit.
At the end of the day, one thing remains constant. Hardly any, if any at all, of this wrangling over taxes will create any jobs.
Where are the jobs President Obama, Majority Leader Reid, and Speaker Boehner?