Note: I'll be on Nicole Sandler's show sometime between 10:30 and 11 a.m. EST today to discuss this agreement.
Senior administration officials talked to bloggers tonight after President Obama addressed the nation on the results of the
extortion negotiation with the Republican leadership, and I have to tell you, I'm not all that unhappy with the results. This is an actual compromise deal. (And, as I've said before, giving tax cuts to the rich is the best insurance policy we can get for Social Security.)
First of all, the unemployed who are still collecting benefits get to heave a sigh of relief, because they're covered for the next 13 months. (I did ask about the 99ers. Sorry, nothing. Apparently we're still invisible. I also said if they were still in negotiations, they might want to considering exempting unemployment benefits from the income tax, the way they used to before Reagan.)
But that's not all. The package includes a shiny new one-year 2% payroll-tax cut for employees, which will stimulate the economy because the people who get it are the ones most likely to spend it. Thumbs up on the payroll-tax cut, which by the way, will be revenue-neutral for Social Security via a credit for the amount that would have been otherwise collected.
It also includes a fix to the Alternative Minimum Tax.
The aforementioned millionaires and billionaires do get their tax cuts -- but only for two years. (That will cost us $95 billion, by the way, and will be financed by borrowing from China.) But they'll have a merry Christmas anyway, because of the jingle in their pockets from (you knew this was coming) reinstating the estate tax with a $5 million exemption. (The officials said that issue will be fought again at a later date.)
If the president had his way, one of the officials said, they would only be making the middle-class tax cuts permanent, but it "wasn’t possible to get through. If there was a compromise, though, he wanted lots of other pieces included."
Bottom line, as the officials pointed out, if he didn't deal with the Republicans, they would have dragged this out for "months and months and months," and there was a good possibility they wouldn’t get any UI extensions at all.
Honestly, I don't care that he promised not to raise these taxes. With a gun to his head, he didn't have much choice. But Obama needs to learn that an occasional piece of cheese from the Republican rats doesn't mean a new era of understanding.