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White House Raising White Flag on Bush Tax Cuts?

November 4, 2010

Emerging from his midterm beat down, President Obama today instructed his cabinet to make a "sincere and consistent" effort to engage with Republican leaders instead promising "no compromise." But if the President is looking for an issue to dig in his heels, it's ending the budget-busting, Bush tax cut windfall for the wealthy. As the Tuesday's exit polls showed, this is a case where good policy is good politics. Nevertheless, the White House may be raising the white flag.
That possible retreat was signaled Thursday by press secretary Robert Gibbs. With Obama set to meet in two weeks with Congressional leaders of both parties, Gibbs suggested the president will be open to extending the upper-end Bush tax cuts for one or two years as part of a broader compromise with Republicans:

"He would be open to having that discussion and open to listening to what the debate is on both sides of that. Obviously... making those tax cuts for the upper end permanent is something the president does not believe is a good idea."

Neither do the same voters who produced a red tsunami two days ago.
As the national House exit polls revealed, only 19% of voters said cutting taxes was the highest priority for Congress. And only 39% felt the expiring Bush tax cuts should be extended for all voters. A 52% majority said they should either be continued for families earning under $250,000 a year (37%) or not at all (15%).
For months, Americans have been telling President Obama that his plan to end the Treasury-draining tax giveaway to the rich is a winning one. (Sadly, they seem unaware that Obama already delivered tax relief to 95% of working households, which at $300 billion was the largest two-year tax cut ever.)
That's the word from Gallup. Its September survey conducted for USA Today found that:

A majority of Americans favor letting the tax cuts enacted during the Bush administration expire for the wealthy. While 37% support keeping the tax cuts for all Americans, 44% want them extended only for those making less than $250,000 and 15% think they should expire for all taxpayers.

That level of support for bringing an end to the gilded class payday is reflected in other recent polling. The question posed by late July survey from Pew Research/National Journal Congressional Connection produced similar results. 58% supported either ending the Bush tax cuts outright or for just the top 2% of earners, compared to 30% who wanted to perpetuate the red ink - and staggering income inequality - they produce. Even Fox News showed majority backing the return of upper bracket tax rates to their Clinton-era levels. At the end of July, 36% favored continuing current rates for those earning under $250,000, while 14% backed allowing all of the Bush tax cuts to expire. As the Polling Report summary shows, a CBS survey conducted between August 20 and August 24 gave expiration this year for households earning about $250,000 a year or more a 20-point (56% to 36%) margin.
Yet on the same day that Senate Minority Leader Mitch McConnell taunted Barack Obama and repeated his objective of making him a one-term president, the White House seemed to suggest that it is willing to fold without a fight. With even more vulnerable Senate Democrats facing the reelection in 2012, temporarily extending the Bush tax cuts could be the same thing as making them permanent. Stopping the Republicans' $700 billion windfall for the wealthy, especially at a time of big budget deficits, is a winning hand for the President. Yet, the Obama White House seems determined to snatch defeat from the jaws of victory.


Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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