Can Obama Meet the GOP in the Middle on Tax Cuts?

Thursday, 02 Dec 2010 10:21 AM

By Matt Towery

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As the week unfolded, it appeared that the last days of the lame-duck session of Congress might well end in gridlock. Many issues had been left to the last days, but certainly the biggest issue was whether the so-called "Bush tax cuts" would be extended for not only the "middle class," but for those fabulously wealthy individuals who have the audacity to earn more than $250,000 a year — the "wealthy."

The Democratic leadership remained steadfastly unwilling to realize that most of the "wealthy" are not Bill Gates-like billionaires, but instead owners of small businesses whose wealth is tenuous. That means, of course, that the jobs of their employees are tenuous, too.

Democrats in the House scheduled a vote only on extending the tax cuts, set to expire at the end of this year, for those under the $250,000 threshold. This ploy was designed to place Republican members in the position of appearing to be against the middle class (a term I despise but use like everyone else). Not surprisingly, Republican leaders said they wouldn't fall for the ploy.

In the Senate, stalemate also appeared likely. GOP members increasingly leaned toward refusing to take up any other legislative matters until the Bush tax cuts and federal spending were addressed.

We all know that so much of what we have seen over the years have been political games and maneuvers played before the public while legislative leaders and whatever administration that occupies the White House hashed things out in the eleventh hour. But sometimes that just doesn't happen. And while it can look messy, such standoffs can have significant benefits later on.

In 1995, Newt Gingrich and his Republican majority in the House not once, but twice forced the temporary shutdown of "nonessential services" of the government. The reaction among the general public was fairly negative — almost as negative as what was portrayed of their mood by media. It was a bold stand for Gingrich to take and one that made him out to be "the Grinch Who Stole Christmas," given that the second shutdown was about this time of year.

The fact is that no one really suffered. The federal workers who had days off received furlough pay. But the shutdown sent a powerful message. It said that the Republicans in the House wanted to move toward a balanced budget and did not mind suffering some temporary bad public relations to prove it.

What Newt and the Republicans accomplished in late 1995 proved fruitful just a few years later, when President Bill Clinton, recognizing the resolute nature of the GOP House majority, chose to move in the direction of cooperating with the Republicans and establishing budgets that were designed to balance the federal budget by 2002.

I give Clinton great credit for having the good political (and common) sense to see that by working with the Republicans he might likely see benefits to the nation's economic health, as well as to his own popularity.

Imagine this: The federal deficit in the last year of the Clinton-Gingrich era was only $25 billion. Compare that to the dreaded world of "trillions" that we face just 13 years later, and there can be little doubt that the nation was headed in the right direction back then.

Gingrich said that he never regretted the shutdown because it made it clear to Clinton and the Democrats that he and his members meant business.

The Republicans, should they dare to buck the Democratic ploys by "shutting down" the legislative process if they don't see a reasonable extension of the tax cuts for all Americans, will surely be labeled as "obstructionists" by many in the press.

But the GOP should remember that they have the power of drafting their own legislation that's designed to provide tax relief to the middle class, by which I and the Republicans mean relief for all of us. Then it will be the Democrats who will be the obstructionists. And we would find out if Barack Obama is as smart as Bill Clinton.


Matt Towery is author of the new book, "Paranoid Nation: The Real Story of the 2008 Fight for the Presidency." He heads the polling and political information firm InsiderAdvantage.

© Creators Syndicate Inc.

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