President Obama seems content to extend all the Bush tax cuts for two more years, but at what price to the GOP's credibility. Republicans had historic gains on November 2nd because the country as a whole was tired of tax and spend and an entitlement mentality that was robbing our childrens' future and plunging us into a permanent high unemployment rate that rivals Europe's socialistic Utopian debacle. Of course extending the tax cuts would be stimulative, but making them permanent would be more so. And the extension of unemployment benefits to three years without paying for them does two very un-stimulative things. It perpetuates the high unemployment rate by reducing the incentive to look for work and adds to the expanding deficit. This is exactly what the American people were voting against this election. Also the death tax compromise to 35% above five million is not a compromise, but a huge victory for the redistribution of wealth advocates.
Did the GOP get the message from the midterms? Apparently many of them did not. Obama is in no position to demand anything, and the GOP should realize that their victory in November was a mandate to stop the vicious cycle and neuter this president and the left from damaging our economy any further. If they were to compromise on the unemployment benefit extension, they should have demanded it be payed for with un-spent stimulus money, and also reduce the extension to six months. Unemployment benefits have in effect become a welfare program with a higher yield then welfare itself.
Now Obama is in a position to take credit for reducing unemployment and bringing the economy back if in fact it does improve by 2012. He also can now blame the republicans for demanding an extension of the tax cuts to the highest earners if it doesn't and the deficit keeps rising. He can now claim bipartisanship which will do much to heal the divide with independents who were the driving force for his election. Meanwhile the GOP has done nothing to placate Tea Party Americans and grass root conservatives by making this compromise. Jim Demint, a Tea Party leader has already come out in opposition to the proposal, reminding others this is not what America voted for in November.
If the GOP would simply demand more, like a permanent extension of all the Bush tax cuts and paying for and reducing the time of unemployment benefits, Obama would be check mated. If he refused, then all the tax rates would increase in January, and the unemployed would be without benefits through the holidays and he would be blamed. The republicans could simply point to the election, and remind everyone of the message it sent. Then in January the house could pass a retroactive permanent extension of the tax cuts and allocate money from the un-spent stimulus to pay for unemployment benefit extensions. The senate would necessarily have to follow suit, especially when you consider how many democrats are up for reelection in 2012. Obama would have to sign it if he had any intention of positioning himself for reelection. If the GOP has goals of becoming a majority in both houses and winning back the White House, they should not compromise and listen to the lesson of the 2010 elections.
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