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.