Tuesday, December 14, 2010

White House Entertainment

It's a close call. On Countdown (transcript here; video below, quote beginning at 2:56) yesterday, Keith Olbermann quoted President Obama telling Kevin Cooney of KCCI in Des Moines in an interview on December 13

I can confidently say that -- and I haven`t made an announcement, but if I ran for re-election, I could confidently say I would not extend the Bush tax cuts for the well-to-do beyond this two-year deal. I can confidently say that.

But was this the most ridiculous remark made by an Administration official in the last two days? Sure, the President evidently now has backed down to Republican demands with a House controlled by Democrats whom he knew would be unhappy with his deal. The Administration's supporters argue that Republicans, in the absence of such an agreement, would simply "run out the clock" till they take over the House in January. That would, of course, leave a Democratic Senate. In autumn of 2012, however, far more Democrats than Republicans will face re-election to the Senate and the chance that the Democratic Party will hold on to the chamber is fairly bleak. At best, in that lame duck session, Obama's party will be facing a diminished majority in the Senate.

The President did not stand firm for a return to the higher, Clinton-era tax rates, when his name was not on the ballot in 2010. When he himself faces re-election, in 2012, will he do so? The GOP knows the answer to that, as Howard Kurtz suggests:

But in Washington, where anything beyond last week’s news cycle is considered ancient history, the jury-rigged nature of the Bush plan—and the fiscal sleight-of-hand involved—have been all but forgotten.

“We knew that, politically, once you get it into law, it becomes almost impossible to remove it,” says Dan Bartlett, Bush’s former communications director. “That’s not a bad legacy. The fact that we were able to lay the trap does feel pretty good, to tell you the truth.”

But the President's was not the most absurd, or amusing, remark of the last two days from the inner circle. White House economic advisor Austan Goolsbee put in his claim (transcript here) on Meet The Press:

In 2012, that`s not going to be the circumstance. In 2012, I believe they will have to stand up and defend on their own merits that they think these high income tax cuts work. And they will not be able to do that, because they don`t.

Goolsbee, contending Republicans "will have to stand up and defend" their position, infers, as Obama maintained the next day, that the President will be pressing for an end to the high income tax cuts. But he does Obama one better, remarking the GOP will "not be able to do that, because they (i.e., the cuts) don't."

But how to determine whether the cuts, in Goolsbee's word(s), "work?" If the economy rebounds as the President hopes and probably expects, the GOP message will be simple: we cut taxes for everyone and now the economy is purring along. It may not be because of the cuts- probably won't be- but the GOP message will be short, easy to understand, and have the benefit of correlation: taxes down, economy up.

If, as is less likely, the economy is in the doldrums come fall of 2012, Republicans will not have to defend the decision- which they and the President took- in 2010 to let rates drop. The GOP will argue that the cuts were too small- or, perhaps, argue instead that as they are now- that it is a mere extension of rates which otherwise were going to be raised by the Democrats. Further, Republicans will argue that an economic slump is no time to raise taxes.

The GOP will at that time be in control of only one of the two legislative chambers. And who will be presiding over both of those and the country? That would be your Democrat, Barack Obama.

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