- Despite campaign pledges and President Obama opposing
extending tax cuts for households earning over $250,000, another promise
made was broken. At the same time, while supporting them for working Americans,
he said doing so permanently is unaffordable. Unsurprisingly, a December
6 White House press release issued a "Statement by the President on
Tax Cuts and Unemployment Benefits," saying:
- While "disagree(ing)" with Republicans, he
capitulated, arguing that "without a willingness to give on both sides,
there's no reason to believe (the current) stalemate won't continue well
into next year....I am not willing to let that happen....it would be the
wrong thing to do."
- "As a result, we have arrived at a framework for
a bipartisan agreement." Everyone will get a tax cut on income, capital
gains, dividends, and the Bush enacted federal estate tax that lapsed at
the start of 2010, including the super-rich (who deserve higher, not lower
taxes), Obama caving to Republicans and deep-pocketed donors who'd likely
give less if they paid more.
- In Obama-speak, we need to make "tough choices...to
secure our future and our children's future and our grandchildren's future"
- -- permanent wars;
- -- greater super-rich enrichment;
- -- temporary populist benefit extensions; as well as
- -- class warfare coming through neoliberal austerity
for working Americans, mainly middle class ones, targeted for elimination.
- Neither Obama or congressional allies explained it or
that both parties accelerated it in recent years.
- Super-rich Americans will be further enriched by greater
estate tax deductions. The exemption will be raised to $5 million for an
individual (up from $3.5 million in 2009) and $10 million per family in
addition to cutting the tax rate to from 45 to 35%. It matches levels not
seen since the Great Depression's onset, besides the current greatest ever
wealth gap disparity, obscene and unjustified by any standard.
- In the midst of a deepening Main Street depression, rich
and super-rich Americans never had it so good, thanks to Obama and congressional
Democrats governing like Republicans, signaling harder times ahead for
- In contrast, the administration and Congress initiated
no jobs creation programs or serious long-term relief for millions of unemployed,
including many who've lost homes through foreclosure. Instead, unemployment
benefits are extended grudgingly for limited periods. In prior downturns,
they were enacted routinely without expiration until recessions ended.
- Handouts to the Rich, Pay Freezes for Federal Employees
- On November 29, Obama froze pay for all civilian federal
employees, a White House press release saying:
- Deficit-cutting priorities take precedence. "Just
as families and businesses around the nation have tightened their belts
so must their government." As a result, "the President has decided
to propose a" two-year freeze through 2012, excluding military personnel
and employees getting promotions. The administration calls it shared sacrifice,
"another step in what (it's) done as part of its Accountable Government
initiative to cut costs, save taxpayer dollars and do more with less in
the federal government."
- Except, of course, for Wall Street, other corporate favorites,
imperial adventurism, war profiteers, tax cuts for the rich and super-rich,
and other privileged beneficiaries on the government dole. Only the little
people make sacrifices, collateral damage in Pentagon-speak. Others do
very well, thank you very much, including $30 billion more for businesses
that buy equipment in the next two years.
- Neoliberal Austerity Coming
- Other handouts will follow, generous ones if Obama's
deficit cutting commission proposals are adopted. An earlier article addressed
them, accessed through the following link:
- They include dramatically cutting income tax rates to
9, 15 and 24%, down from six brackets ranging from 10 - 35% for income
over $373,650. Also slashing corporate rates from 35 - 26%, combined with
eliminating some deductions easily manipulated around by clever tax lawyers.
At the same time, the following pain was proposed:
- -- ending or capping middle class tax breaks, including
deductions for home mortgage interest and tax-free employer provided medical
- -- deeper Medicare cuts, including higher co-pays and
other ways to make recipients pay more;
- -- "comprehensive tort reform," making it harder
for aggrieved patients to file malpractice suits;
- -- raising the Social Security retirement age to 69 by
2075 and reducing cost-of-living increases;
- -- by 2015, cutting the federal work force by 10%, adding
more to the unemployment rolls; and
- -- raising the federal gasoline tax by 15 cents a gallon
and imposing "user fees" on motorists to fund the federal transportation
and highway spending program.
- Congress Looks After Its Own
- In January 2009, Congress voted itself a $4,700 increase,
raising their pay to $174,000. It abstained in 2010 and 2011, the law requiring
both Houses reject it. Otherwise, it's automatic.
- According to the Office of Management and Budget (OMB),
Obama's announced freeze doesn't apply to "legislative-branch employees,"
including Congress able to raise, freeze, or cut pay for all government
workers at all levels.
- In 2011, military personnel will get a 1.4% increase,
the smallest one since 1973, OMB citing low inflation as justification.
Yet considering wartime hardships, including long deployments, high risk,
possible severe injuries and deaths, who more than combat forces deserve
more consideration on pay and other benefits. Next year and perhaps thereafter,
it will be grudgingly meager.
- A Final Comment
- Obama, congressional Democrats and Republicans back shared
sacrifice. The rich and super-rich share. Others most in need sacrifice
through growing poverty, lost jobs and homes, lower pay, and fewer benefits
"to bolster the economy," according to New York Times writers
David Herszenhorn and Jackie Calmes in their December 7 article headlined,
"Tax Deal Suggests New Path for Obama."
- Honest observers call it business as usual, new policies
like current ones plus painful proposed austerity. For Obama:
- "It's not perfect, but this compromise (read capitulation)
is an essential step on the road to recovery," for whom he didn't
say. "It will stop middle-class taxes from going up" while Washington
plans eliminating middle income households. "It will spur our private
sector to create millions of new jobs, and add momentum that our economy
- Few, in fact, have been created, showing labor force
stagnation, full-time jobs being cut. In the last six months, 1.6 million
have been lost. Those added are temporary or part time with low pay and
few benefits. Moreover, the broader household survey shows large declines
- 330,000 in October, another 173,000 in November, a pattern stubbornly
- Shadowstats reports true unemployment, including discouraged
workers and those wanting full-time jobs but can't find them at 22.6%,
not the Labor Department's jerry-rigged 9.8%. In a word, the job market's
sick, administration policies doing little to improve it.
- Obama's "compromise" does provide a two-year
expanded tax credits extension, including the Earned Income Tax Credit,
Child Tax Credit, and American Opportunity Tax Credit as well as a 2% cut
in payroll taxes in lieu of eliminating the Making Work Pay tax credit.
- It also extends unemployment benefits another 13 months,
gives some families a college tuition tax credit, and adjusts the alternative
minimum tax temporarily (indexing it for inflation), exempting 21 million
households from being hit.
- The cost, of course, adds hugely to the deficit, up to
$900 billion over the next two years, according to some estimates. Neither
party scrimps on lavish handouts to corporate favorites, wailing only about
crumbs to working households, even under Obama's so-called "compromise."
- Economist Paul Krugman opposes extending George Bush's
2001 "fast one, (his) irresponsible tax cut," largely benefitting
America's rich and super-rich. In his December 5 op-ed headlined "Let's
Not Make a Deal," he urged "just say no." Obama and congressional
allies didn't listen, capitulating instead to Republican "blackmailers."
- Stephen Lendman lives in Chicago and can be reached email@example.com.
Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge
discussions with distinguished guests on the Progressive Radio News Hour
on the Progressive Radio Network Thursdays at 10AM US Central time and
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