President Obama has been dragged kicking and screaming to a Stimulus package that works. Earlier today, he finally came to an agreement with Republicans to extend the Bush tax cuts. He now has his liberal buddies mad at him.
During the Presidential campaign he ran on eliminating the Bush tax cuts. Instead he spent more money than George Washington through George W. Bush combined.
The day after Presidents Day in 2009, less than one month after he took office, he signed into law his stimulus package which paid out billions of dollars calling them shovel ready jobs. A problem he had was that apparently, nobody owned any shovels. The stimulus failed. He tried cash for clunkers. It too failed.
He then moved to health care reform and plowed in tax increases and government intervention into the health care reform plan. The American people were against these initiatives and more not mentioned. This was shown with the elections of Chris Christie in New Jersey as Governor and in Virginia with the election of now Governor Bob McDonnel. Both Republicans. As the health care reform was nearing a vote, the House was held by Democrats and only a simple majority was needed to pass their plan.
In the Senate 60 votes were needed to pass it and they had the 60 when they passed their version. However, Senator Ted Kennedy died and a special election was held. The Republican, Scott Brown won and promised to be the 41st vote in the Senate against health care reform which would then stop the health care takeover.
However, the Democrats had already passed health care reform in the Senate when they had the 60 votes. So the only way to get health care through was to have the House vote on the Senate plan as it was. It couldn't be changed or it would have to be voted on in the Senate again and it would have lost with Brown's vote.
So without any markup between the two Houses, to prevent the Republicans from stopping a flawed health care bill which they were not included in, they passed the Senate version to keep Senator Brown from putting an end to that plan.
The American people were livid and in November, the Democrats were kicked out in massive amounts. At last count 64 House seats went to Republicans. The Republicans gained seats in the Senate as well and they also gained in massive amounts around the country in Govenorships and state houses.
Obama then changed his tune somewhat and the Republicans warned the Democrats. They will not allow any bills to pass until the tax cut extension was handled. The Democrats already shut down both Houses in September to go and campaign. So they were obviously not interested in fixing the problem of taxes increasing on January 1.
Following the Republican overwhelming victories in November and with the majority of seats up for re-election in 2012, not to mention Obama's own job, he had no choice but to give in on the tax cut extension debate.
This is interesting because for years the Democrats have been claiming that the only ones that got a tax break from Bush was the rich. Now they've had to admit that everyone's taxes would increase after the first of the year. For 18 months, prior to the election of 2010, Obama didn't even meet with the Republican leader of the Senate, Mitch McConnell, one on one.
They continued to fight to increase taxes (as Democrats do) on the rich. They apparently don't believe that all men are created equal. The rich were apparently created as better Americans and the Democrats wanted to punish them. In the meantime, not knowing what was going to happen with tax rates after the first of the year, the rich kept their money on the sidelines. They weren't hiring, they weren't investing.
Today, Obama had to give in. He's now come to an agreement with the Republicans, albeit for only two years. This will stimulate the economy. Following the first of the year, the Republicans, if they follow the voice of the people, will start cutting spending. That too will stimulate the economy.
When Bush signed these tax cuts back in 2001 and 2003, revenue to the government set new records. So why did the deficit increase? Because the Republican Congress spent the additional money. The Democrats continued to spend when they took over in 2007.
Why was job growth slow during the Bush years? Because for the first six years, the average unemployment rate was 4.5%. Full employment is considered at 5%. How do you have higher employment numbers when everyone is already working?
Why did the tax cuts expire at the end of 2010? Because the Democrats that voted for the tax cuts wouldn't vote for them unless there was an end to them.
In 2007, Democrats were elected and took over both houses of Congress because Republicans spent as though they were Democrats with all of that extra income created by the tax cuts.
Just this agreement alone, should decrease the unemployment rate over the next two years. If they Republicans are actually successful at cutting spending, the economy could come roaring back even faster.
This will make the 2012 election very interesting. Will Obama get credit for the pickup in the economy or will the American people realize that Obama had to cave on this?
It will also be interesting to see if the Republicans follow through on their attempt to repeal health care reform, and if they do, will enough Democrats get on board to override an expected veto. Or will Obama realize that he blew it with health care and sign a repeal to health care to get himself re-elected next time around.
I've been flipping between Fox News and CNN since this announcement came out. Fox News is upbeat that a deal was reached. CNN and their "best commentators on TV" are all nailbiting and saying that this tax deal is not paid for and the deficit will have a hole blown in it, and saying that Obama has lost his Democrat base.
I've said it before and I'll say it again. Tax cuts don't cost money. These aren't even tax cuts. These are maintaining the current tax rate, although they are apprently giving a one year payroll tax cut.
The money does not belong to the Government. It belongs to the people that earn the money. The goverment only confiscates some of those earnings when they tax us.
Obama was dragged kicking and screaming to agreeing to extending these tax cuts. I'm now hoping that the Republicans can drag him kicking and screaming to cutting spending and to repealing health care.
The beneficiaries of this deal are the American people. While it won't be an immediate effect on unemployment, and economic growth, it won't be a long delay before we start seeing this deal working for everyone.
It is nice to see that Obama now agrees that Americans don't need a tax hike next year and that it would be bad for the economy and for the people.
You're welcome to comment.
Brett
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