Jobless benefits vs. taxes: deal or no deal?

Paul Krugman is one of the most influential writers on the left. Perhaps the most influential, depending on how one defines "left." He says "no" to the just concluded deal with the Republicans, where the Bush tax cuts for the rich do not expire this year as stipulated in the original legislation.

He admits the deal has some improvements over expectations in the area of tuition credits and the two-year postponement of the wealthy tax cut expiration, and a payroll tax cut. Even though turning down the deal and instead letting all the Bush tax cuts expire means income tax rates for working people would rise 3 percent to 5 percent, and perhaps more for those workers with any capital gains, he still votes "no."

Even though saying "no" also imperils a deal on extending unemployment benefits (the most immediate requirement) - now held hostage to Republican demands to extend tax cuts for the rich - even though, as he admits, doing so is "politically risky," he still says "no".

Risky? I'll say! Proposing not probable but definite cash pay cuts for jobless workers in the middle of this phony "unemployment-is-still-rising" recovery is very risky indeed, and a tall order for millions of workers to swallow.

Krugman's reasons for taking on the risk now are: 1) the budget really cannot sustain the loss of revenue from extending the tax cuts for the rich; and 2) he argues that conceding to Republicans now will guarantee even more fierce attacks on Social Security and Medicare and other "entitlements" (read: rights) later. (Not to mention the DREAM Act, START and many other matters stalled by the blockade of Republicans insisting that their big campaign contributors are rewarded with the Christmas present they asked Santa to bring.)

Krugman, in effect, says: Let's go on strike now (everyone makes a sharp short-term sacrifice toward a longer-term right or security). Let working people suffer the tax rise and postponed unemployment extension in a soldierly way, regardless of the stress; and let this sacrifice be over higher taxes for the rich and the implications of failure there for the future.

My education on strike-related matters from my time with the United Electrical Workers (UE) emphasized that carefully calculating relationships of forces prior to a strike was always key in determining whether the union would survive, never mind prevail, in the ensuing struggle. That lesson applies here as well.

I say "yes" to the tax and unemployment extension deal, though strong protests at the utter hypocrisy of the Republican and Blue Dog forces should be heard across the land. But having a showdown fight, where the workers have to take a big hit at the get-go, on the tax question is suckers' bait, right now. It's an invitation to greater divisions. Not because the risks of letting the rich off the hook are not as Krugman states. They are indeed high. And extending the cuts for the rich is fundamentally wrong. The president, however, correctly pointed to the additional sacrifice by American working people that would result if all the tax cuts expire, which is the outrageous extortion the Republicans have been trying to pull. Obama said, explaining the compromise:

"I am not willing to let working families across this country become collateral damage for political warfare here in Washington. The American people didn't send us here to wage symbolic battles or win symbolic victories."

I agree, although Krugman is correct in pointing out that the issue is more than symbolic. Further, the president's promises here I think overstate what the tax cuts and unemployment insurance can accomplish on their own. He said, "It's not perfect, but this compromise is an essential step on the road to recovery. It will stop middle-class taxes from going up. It will spur our private sector to create millions of new jobs, and add momentum that our economy badly needs."

It will take MUCH MORE to "create millions of jobs." Hopefuly that speech is code for the point that "millions of jobs" and "momentum" in that direction are indeed the guiding objective and focus. There is not much time to be tarrying on the subject.

If indeed we are all going to go on strike, and win, I think it has to be on the MOST important question. That question is jobs. If we are going to defeat the "austerity" campaign of the Republicans and financial forces it will be directly on jobs. Significantly reducing unemployment is also the acid political test, in my opinion, that will determine if the president will be re-elected.

It's better to get unemployment extension and tax cuts for workers passed, even if dirtied, and then use the latest unemployment numbers to completely restart the jobs debate. The much stronger jobs-first alternative budget reports of the Citizens' Commission, as well as several positions of members of the president's deficit commission who were not in agreement with co-chairmen Alan Simpson's and Erskine Bowles' austerity positions, provide excellent opportunities, and good platforms from which to make a much more united and broader stand. It is a solid foundation on which to defeat the phony deficit diversions. If the right wing is determined to paralyze the government's response to the economic crisis, let it all come to a grinding halt on the most important question - job creation.

 

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  • This issue reminds me so much of the fight of steelworkers when the co. declared bankruptcy. The Intrnatl. leadership (who I've generally supported) negotiated a package that actually did help some workers, while also basically giving up on the fight to save jobs, even the fight over our real pensions. While some, good union folks, argued that "the union was able to gain benefits for the workers that we weren't legally even able to negotiate on!"

    Others argued that the price was too high, because we failed to even show any fight, that, politically, we will lose (at least) a generation of workers. Unfortunately, both proved to be true. While it was true that there were some positive benefits to the workers, the workers never understood a logic of "you were at 10, now you're at 5, but without the agreement to give up the jobs, we'd be at 3!" What also occurred is that an entire generation of workers, and more, politically turned against the union, blamed the union for the losses and became demoralized, giving up the fight!

    What I find so depressing at this point is how the party has forgotten how to fight, or that "when the workers will fight, want to fight, you must fight!" As Wm Z Foster also said (as a medifor, not a literal truth), there has never been a strike that has been lost. Of course strikes have been lost, and Foster certainly understood that. His meaning, which we've lost in the modern era, is that 'POLITICALLY' working folks will learn tremendous lessons in struggles, which they may never learn in discussions, forums, etc.

    To understand that this tax deal is a horrible one, one need only look at the response of the people, of the key forces in the people's movement. Leaders of org'd labor and allies, the progressive sector of elected democrats and regular folks, supporters of Obama who want him to succeed, are unanimous in their condemnation!

    The point, for the overall class struggle, is NOT a mathematical totally up of benefits for which side (although I do not think this favors the agreement, for us, either), it IS about what it has done to the people's fighting spirit! The angry, spirited, insurgent people's majority that elected Obama and a Democratic majority is now demoralized, disspirited, disgusted and hopeless, not only as result of this latest agreement, but in what they've seen as a pattern of timidity, caving in and an overall refusal to fight by the present majority. That is FACT!!

    Worst even than that is that the failure to draw a line and conduct a principled fight on this (or anything) means that regular, suffering and confused working folks are not exposed to any principled argument over issues and have no chance to understand the real causes of this crisis.

    Being an apologize for Obama is NOT supporting him. The recent election showed that. Truly supporting this administration would be to build a fight below them, giving them the progressive ground to stand on.

    Posted by bruce bostick, 12/11/2010 4:26pm (4 years ago)

  • Too bad most of the stuff about the Obama/GOP tax compromise got dropped off the front page, because it's really starting to heat up.

    Today, Sen. Bernie Sanders (Socialist Independent, VT) held the Senate floor in a nearly nine-hour filibuster against the proposed tax compromise, during which he spoke in detail about the harsh conditions confronting the American working class. Most bourgeois media tried to ignore the senator for as long as they could, but with #filibernie and #berniesanders becoming the two most popular hashtags on Twitter for much of Friday, it is clear that the message has gotten out to millions of people.

    Also today, the Congressional Black Caucus have announced that their members will not support the current Obama/GOP tax deal, on the grounds that it is -- in the words of Rep. Donald Payne (D-NJ) -- simply unfair. Rep. Payne said that CBC members want a better deal for their beleaguered constituents, and he referred to the Roosevelt New Deal as a model.

    Posted by Trailer Trash, 12/10/2010 10:06pm (4 years ago)

  • Even most House Democrats think the deal is a sellout.

    Posted by Sean Mulligan, 12/10/2010 9:35pm (4 years ago)

  • Sorry, John, not even close. How about this. Obama tells the repugs’ “No tax break for the super rich. Period.” He lets the tax cuts expire, lets the repugs block UI extension and then spends the first of the year hammering on the repugs and exposing them for what they are and what they are doing. I think it used to be called fighting back. Its not that different from when Clinton allowed the government to shut down rather than give in. That was a political nightmare for the GOP.

    As Patti Smith once asked “Can‘t you show me nothing but surrender?”

    Posted by Bob Patenaude, 12/10/2010 5:06pm (4 years ago)


  • Here's what Richard Trumka, the most influential labor leader on the left, depending on how you define "left" has to say about the Obama-GOP tax deal:

    "The gains for the middle class and jobless workers in the deal come at too high a price...

    "The issue we face today is not the lack of power or opportunity. The question we have to answer is this: How do we use our power to escape caving in to Wall Street and moneyed interests?"

    Posted by John Gallo, 12/08/2010 7:24am (4 years ago)

  • I sent the following to a workmate:

    Art
    Once again it appears Obama has caved to Republicans.

    But all is not as it seems. Only consider that at stake was the Republican caucus's real threat to stop unemployment checks to millions of out of work folks.

    The following is a response to Paul Krugman's call (it also appears here after John Case's remarks) for Obama to "Not Make A Deal" and lose benefits for those millions of desperate families.

    I believe Obama is correct not to play footloose with the lives of so many. Remember, it is the Republicans and the corporations who are the real economic terrorists here. Republicans, corporations, banks, Wall Street, investment houses and the rich are united in opposition to Obama's presidency and the movement behind it.

    With their combined power they are able to maneuver Obama into making hard choices, many that are of the "heads I win, tails you lose" kind.

    In a very real way, much of the criticism and loss of confidence by many of Obam's supporters shows how successful the right-wing's tactics are. They are succeeding in dividing the coalition that elected Obama.

    That coalition should be directing their anger at the actions of the right-wing and not playing into their hands by helping to weaken Obama's presidency.

    Posted by Bill Appelhans, 12/07/2010 5:43pm (4 years ago)

  • John Case is way off base in this article. This deal was concocted so that the Republicans, the Blue Dogs and the White House could support it against the opposition of the Democrats left (read: liberal) wing. It is flagrantly dishonest of the president to say that this is a matter of not "playing politics." There is nothing more political than the class struggle, and no more important question in the class struggle than "Who pays?" In this case, who pays for the state?

    The political consequences of this are disastrous in the medium term as well as the short (and in the long run, we're all dead). This is the last gasp of the Democratic majority in the House; by allowing the Republicans to play chicken with the middle-income tax rates, and by enabling them to hold the unemployed hostage in exchange for a multi-billion-dollar ransom payment to the very rich, the White House and the Democrats who vote for this deal are going to set the stage for the Republicans to pull this trick again in another couple of years, only next time the Republicans will have a House majority and a closer margin in the Senate.

    The effects of a Federal tax increase on middle-income earners in the near term are greatly exaggerated. The Bush "tax cuts" for this section of the working class were in fact miniscule, and for a decade they have been more than offset by increased taxes and fees and decreased services at the local and state level because budget-challenged state and local governments have been less and less able to fund basic services. The Bush tax "cuts" -- now extended by this deal -- were in fact a tax SHIFT, wherein the burden of taxation shifted from the wealthiest to everyone else.

    If you look out at the political landscape in the USA, the social movements are indeed anemic, but it is irresponsibly defeatist to say that we should abandon the field, when there are progressive-minded members of Congress who want to fight on. It would be different if the consequences of rejecting the deal were to lead to something worse -- the way rejection of the less-than-adequate health care bill, for instance, would have only meant the continuation of an even-worse status quo. That's just not the case in this situation. Krugman is correct when he says that the pain inflicted by the modest tax increases on the middle-income working class would be little compared to the pain we all now have to face with the extension of the tax giveaways to the very rich.

    And the fact remains: if the Republicans continued to vote against extending the lower tax rates for everyone because they wanted to continue the low tax rates for the very rich, then it would have been possible for a progressive political coalition with any gumption to put the blame for middle-income tax increases squarely where it would have belonged, on the Republicans. Here, this really is giving up without a fight, and sets a disturbing precedent for the future. The "relationship of forces" that John Case refers to here is only going to get worse in the near future, and we do nothing to combat that trend if we accept this.

    Posted by FD, 12/07/2010 3:31pm (4 years ago)

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