Sunday, December 19, 2010

Cautious Support For Tax Deal

By Kelly Sloan
The deal reached between President Obama and Congressional Republicans to extend the Bush tax cuts — and prevent an enormous tax increase in the midst of a recession — is far from perfect, though it is exceedingly difficult to recall anything that has ever come out of Washington D.C. that was; it does, however, make the decision of whether or not to support it also difficult.

There is no question the deal leaves a lot to be desired from a conservative standpoint. It adds yet more spending from the government's already well-overdrawn account, particularly in the form of an unfunded extension of unemployment benefits, which will have the unfortunate effect of extending current unemployment rates by about the same amount of time. It is also a repository of liberal handouts, such as tax credits to the left's favorite industries, and other gimmicks designed to placate the tempestuous left, irate at the thought of letting an economic crisis slip through their hands not fully exploited.

And yet, it remains a deal which Congressional Republicans cannot afford to turn down, for several reasons.

First, it represents a major concession on the part of President Barack Obama — that reductions in the marginal tax rates will result in economic growth — that is a marked departure from the ideological progress-to-destitution model employed since his administrations inception. This does not, of course, symbolize a true economic epiphany on the part of the president; he remains a committed liberal, who was simply forced by circumstance to accept economic reality on its own terms.

The president knows his agenda was irrevocably stopped dead in its tracks by an electorate which yanked the brake lever hard in November. His only chance to salvage any decent legacy is to do something to help improve the dire state of the nation's economy, which means swallowing what is, for him, an especially bitter pill — admit that what he tried did not work, and concede to expanding the limits of his philosophical compass just enough to permit conservative economic solutions that will.

The second reason to support this deal is because of the consequences of not — namely, allowing the Bush tax cuts to expire, resulting in a massive tax increase at perhaps the worst possible time. Countenancing hikes in the marginal rates, and a return to the 55% estate tax, should be unconscionable to any conservative, in so far as doing so cuts against the grain of all that fiscal conservatism stands for. Allowing these rates to go up will do nothing but dissuade growth and investment, resulting at best in continued stagnation, but more probably in further job losses, market sell-offs, and a shrinking economy. Permitting such an economic gut punch to occur in the hopes of securing a better deal is a gamble that should give Republicans serious pause.

Besides, what guarantee is there that they will get a better deal? It is true that Republicans will soon control the House, and gain seats in the Senate, but they still do not hold a Senate majority, and, most critically, still face a very liberal veto pen in the White House. Given the irate reaction from many in his own party, one cannot expect Obama's moment of relative clarity to last forever.

The very fact that the left despises this compromise so much should in itself serve as a reason to support it. This nearly comical level of ire exhibited by several Progressive Democrats reveals just where their priorities lie. Their contempt for the so-called “rich” apparently trumps all, including political survival. In contrast to the curious claims from the president and certain Democrats (citing, I presume, a Mother Jones poll taken at a leftist poetry reading in Greenwich Village) reputable polls consistently show the American people strongly in favor of extending ALL of the Bush tax cuts.

In order to accomplish what is needed in Washington, Republicans need to display some patience. They can do this without selling their souls. The fight does not end with the passage of this bill. Conservatives should cautiously support this deal, lock the current rates in for another two years, and use the time to pound away at the spending, expansion, and social engineering that has become the standard of the current government. As always, prudence and realism, well-aimed, are a conservative's most potent weapons.

This article first appeared in the Grand Junction Free Press on 12/17/2010. Reprinted with permission

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