Obama Faces Liberal Revolt over Tax Cut Deal

AP Photo/Pablo Martinez Monsivais

The battle over extending the Bush-era tax cuts has emerged as a defining moment for liberals disenchanted with President Obama, who they increasingly see as unwilling or unable to back up his campaign promises.

Mr. Obama vowed as a candidate to extend the Bush-era tax cuts for incomes below $250,000 for a couple or $200,000 for an individual - but let the cuts, which lapse at the end of the year, expire for incomes above those thresholds.

Republicans want the cuts extended for all income levels, including the wealthiest Americans. Though the American people favor Mr. Obama's position according to the latest CBS News poll, the White House and congressional Democrats appear poised to accept a temporary extension of all of the cuts this week.

The White House's apparent willingness to give in to the GOP on the tax cut issue - despite Democrats' large majorities in both houses of Congress (at least for a few more weeks) - is striking many on the left as emblematic of a president who they say has repeatedly failed to fight for what he believes in.

Liberal New York Times columnist Frank Rich this weekend explained "the baffling Obama presidency" in part by arguing that Mr. Obama "has seemingly surrendered his once-considerable abilities to act, decide or think." The president's attempts to seek out compromise instead of holding fast to a position, he wrote, has rendered him "indistinct" and "weightless."

Over at the liberal Huffington Post, meanwhile, the talk has turned to rallying around a serious primary challenge to Mr. Obama. While such a challenge is unlikely to materialize, the discussion reflects the level of disenchantment with Mr. Obama among the activist left.

"You don't have to be a rocket scientist nor have a PhD in political science and sociology to see clearly that Obama has abandoned much of the base that elected him," wrote Clarence B. Jones Sunday in a column calling on liberals to consider rallying around someone else in 2012. "He has done this because he no longer respects, fears or believes those persons who elected him have any alternative, but to accept what he does, whether they like it or not."

Daniel Roche, a 2008 Deputy Field Organizer in Nevada for Mr. Obama, is quoted in an email from the Progressive Change Campaign Committee saying that if the president "capitulates on this, there really is no point in voting for him in 2012."

"The difference between voting for a Republican and voting for someone whose default negotiation strategy is rolling over and dying whenever the Republican Party says mean things is marginal," he said. "This should be a ridiculously easy fight to win."

For liberals, the first half of Mr. Obama's term has been a long and so-far unfulfilled wait for something to rally around. The so-called "public option" never made it into the health care bill; "Don't Ask, Don't Tell" remains as military policy; immigration reform efforts have barely moved forward; the Guantanamo Bay prison facility remains open. Now comes the fight over the Bush-era tax cuts, which, barring a surprise outcome, marks one more disappointment for those who want to see the president fight for what he believes in.

CBS

"Like the public option, which enjoyed similar bipartisan consensus among voters, progressives are pushing President Obama to fight for both a policy winner and a political winner," Adam Green of the Progressive Change Campaign Committee said. "...President Obama has shown a complete refusal to fight Republicans throughout his presidency even when the public is on his side -- and millions of his former supporters are now growing disappointed and infuriated by this refusal to fight. Obama is demobilizing the troops and demoralizing the public right before he seeks re-election."

What liberals want to see is for Mr. Obama to stand firm on the issue, in part by arguing (perhaps in a holiday primetime address) that an America drowning in debt can't afford to give a handout to the richest Americans. As the Times noted Sunday, the $60 billion per year that would be saved by not extending the cuts for high earners would save as much as the elimination of earmarks, a federal pay freeze, a ten percent cut in the federal workforce and a 50 percent cut in foreign aid - combined.

From the White House's perspective, however, drawing the ire of what Robert Gibbs once dismissed as the "professional left" may well be worth it. The Republicans, after all, hold most of the cards: With the help of a handful of Democrats and the filibuster rule, they can (and have) blocked Senate Democrats' efforts to extend the cuts only for those making less than $250,000 (or, in a separate vote, less than $1 million). Lacking the votes to push through their position through the Senate, the White House and Democrats are left to either let the cuts expire for all Americans - which they see as bad for the economy, not to mention potential political suicide - or accept the GOP's terms, at least for a year or two.

And, the White House is stressing to reporters, it's not like they won't get anything for their trouble: The deal being negotiated between the White House and members of Congress will likely include a vote on extending long-term unemployment benefits (which expired last week) as well as some tax cuts important to the White House. The negotiation reflects the compromise necessary to get things done in Washington, they argue (behind closed doors, anyway) - and what's so bad about acknowledging political reality?

According to liberal Times columnist Paul Krugman, what's so bad is that Mr. Obama is essentially giving into GOP blackmail - and "if Democrats give in to the blackmailers now, they'll just face more demands in the future."

"So Mr. Obama should draw a line in the sand, right here, right now," he writes in his column today. "If Republicans hold out, and taxes go up, he should tell the nation the truth, and denounce the blackmail attempt for what it is. Yes, letting taxes go up would be politically risky. But giving in would be risky, too -- especially for a president whom voters are starting to write off as a man too timid to take a stand."

Such a potentially cathartic move would indeed be high risk, however - another promise Mr. Obama made during the campaign was not to raise taxes on the middle class. Republicans have been effective in blaming Democratic policies for the still-struggling economy, and while it's hard to know exactly how it would play politically if Mr. Obama let taxes for everyone rise, it's clear the GOP would aggressively cast the situation as the latest example of financial mismanagement by the party in power. The GOP is the stronger force in American politics at the moment, and it can be particularly difficult to enter a duel when it feels like the other side has all the momentum.

And despite the criticism from the "professional left," the White House knows that the perceptions of pundits like Krugman and Rich don't necessarily translate to the general public. According to the latest NBC News-Wall Street Journal poll, 90 percent of blacks still approve of the president, as do 82 percent of Democrats and 79 percent of liberals. That's not exactly the numbers one might expect for a man whom voters - at least in the Democratic base - "are starting to write off."

Still, there is a danger in the opinions of so-called "opinion makers" eventually trickling down to the general public. In his column Sunday, Rich compared Mr. Obama to Republican New Jersey governor Chris Christie, who is popular in his state despite its blue tint. (It should be noted that Christie has more executive control than Mr. Obama does, which makes it easier to stick to your guns.)

"...the core of Christie's appeal at home is that he explains passionately held views in concrete, plain-spoken detail," he writes. "Voters know what he stands for and sometimes respect him for his forthrightness even when they reject the stands themselves."

That's a quality sorely lacking in Mr. Obama, Rich and others say - even when he has the public on his side. And, they say, it has fed into the notion that the president is a wishy-washy Washington politician instead of a true champion of the middle class.

Perception is not necessarily reality, of course. The White House can point to financial reform, the health care bill, and the stimulus package as important liberal achievements, and Mr. Obama said even as he made his campaign promises that he was open to compromise in order to move forward. But for a president who has over the course of two years yet to deliver a single clear victory for the Democratic base that got him elected, the debate over tax cuts looks like the latest in a string of missed opportunities.

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Brian Montopoli is senior political reporter for CBSNews.com. You can read more of his posts here. Follow Hotsheet on Facebook and Twitter.

[thetruthwillout]

Has anyone ever heard of the working poor? Just curious. How many hardworking people are out there but still can't make enough to make ends meet without some kind of help. Why is it that the word "poor" brings up images of people with signs that say "Will work for food." This country is full of the working poor So what should we do with them? Remember, you can't have capitalism without an underclass.

[maeema12]

those rich republican and democratic take a lesson from the lady who gave up her job to save her employers they should stop fighting with the
President and give up their salary we see how far that go to help the
middle class and poor.Let them put that in thier pipes an think on that.

[KWiedemer]

Senator Bernie Sanders (I-VT) is threatenin?g to filibuster the President'?s proposed 'tax cut compromise?', which will extend the Bush tax cuts for all Americans - including the wealthiest?, top 2 percent income earners - in exchange for an extension of the federal Emergency Unemployme?nt Compensati?on program (EUC) for a period of 13 months.

This deal is not only obnoxious and unbalanced?, it will not help 4.5 million 99ers (those who have exhausted all UI benefits. Based on the way the President addressed the nation last evening, this proposal will extend the filing deadline for EUC benefits only - meaning it will help the millions of Americans who have not yet reached the end of the UI benefit payments. In addition to the 4-5 million 'existing' 99ers, there are another 4 million unemployed Americans who will exhaust their benefits in the next few months. for a total of more than 8 million unemployed workers with no remaining unemployme?nt insurance compensati?on.

Rep. Alan Grayson is also looking for informatio?n. Here is a legitimate link to immediatel?y send feedback to Rep. Grayson:

PLEASE GET INVOLVED IN THE FIGHT TO HELP 4.5 MILLION 'EXISTING' 99ERS - AND 4 MILLION WHO WILL BECOME 99ERS IN A FEW MONTHS...

For informatio?n on how to respond how to get your letters/em?ails to be HAND-DELIV?ERED to, please see my article:

http://www?.examiner.?com/unempl?oyment-in-?denver/99e?rs-letters?-to-sen-sa?nders-rep-?grayson-re?garding-ta?x-cut-comp?romise

Denver Unemployme?nt Examiner

[Amusedbyitall]

For those that look to rewrite history, the most recent time of sustained prosperity was when the rich were taxed 90% of their income. We grew in our economy and prestige. We built an interstate highway system, upgraded transportation in airlines and trains, built a first class military, and sent men to the moon, which advanced everything from computers to communications, even clothing. And the wealthy continued to get wealthy by investing in America, for which they received tax deductions, reaping the benefits from a financially strong America.

Most of the supporters of the rich are just the spoiled offspring of America's wealth and have no idea how it was obtained. Use the internet to learn about history not to validate your delusions.

[YrWrongAgain]

It seems the simple minded are easily amused.

[g9rocks64]

Although I agree with your basic idea, I must argue that the middle class and even poorer families are somehow rallying their support behind the ultra rich, of which America has a dwindling population. The middle class is scared to death by the tactics of the right who portray poor people as having their hand out and wanting to take from them. The poor are being duped by the "patriotic" flavor of the tea party, oblivious to the damage they are doing to their own plight.

[Amusedbyitall]

Take the poll and see the results. 62% of those answering the poll are against the President. Only 11% support the President. 27% believe that the Republicans are right. This is more than a revolt by the liberals. This is a revolt of the fiscal conservatives like myself, as well. We believed in extending unemployment benefits to those families that need it. Sure their are some that are abusing the system. There will always be predators looking to cheat someone. This is a nation that does not attack victims to punish predators. But you have to raise revenues to offset spending. Raising taxes are always painful, but raising taxes on the wealthiest is the least painful means of raising revenues to pay for the spending for unemployment extensions.

This is a pox on both parties' leadership. The leaders in both parties agreeing to raise spending while cutting revenues. This is the same mentality the Republicans had when they started the downward spiral of deficits under Bush. We suffer through a financial disaster, and nothing changes. The only truly patriotic act left is to boycott both parties in 2012. This doesn't mean not voting, that is giving up, but voting for anyone other than a Republican or Democrat.

[1renegade]

By reading many of the posts here, I see there are a lot of losers out there. You want all the stupid entitlements that we can't afford to continue and raise taxes during a "recession". Maybe you libs,lefties, or whatever you call yourselves can't realize the small business owners will bare the brunt of a major tax increase and there goes the jobs.

[anthony_masciulli]

I'm an employed systems administrator making low middle class income, very often helping friends' friends' children because there is nothing to eat at home. All my friends earn less than I. I get this done by limiting my expenses, sometimes to my detriment, for instance, by living in a studio apartment when I can afford a one or two bedroom apartment. It's been two years since the near financial meltdown on Wall Street took place. So where are the jobs? Is small business on vacation? Most of them, at this time of the year, are making plans for the ski trails or Colorado or for the beaches of Florida, California, or the Caribbean. You want me to feel sorry for you and your rich friends and relatives. Get lost.

[thetruthwillout]

You are so not telling the entire truth here. Small business are not in the dire straits you make them out to be. Giving tax breaks to rich people will not solve the problem. If that were so then why are we in the situation we're in? Didn't Bush give tax cuts to the rich for the same reason ... to stimulate the economy. Well, look what happened. Calling people leftist liberals because they want what is fair for all Americans is hitting below the belt. Why do people resort to calling names? Because they can't back up their statements with facts. Name calling is their only weapon because the facts say otherwise.

[anthony_masciulli]

I am disgusted with President Obama because he does not pull for middle income earners and poor people as does Rep Nancy Pelosi and others do in Congress and is not addressing eliminating the national debt by making the people who created it pay for it with dollars - not blood. I voted for President Obama but will not in the primary. But I will vote in the primary and for some else for president.

Since Pres. Ronald Reagan, the rich and high income earners have had the poor and middle class income earners on the run. Rep Nancy Pelosi is hated vehemently by the rich and high income earners because she refuses to back off fighting for the poor and the middle class. The following will turn the tables on the rich and high income earners and eliminate the national debt.

1. Let the Bush tax cuts expire in 2010.

2. Eliminate all tax credits for all investments made outside the United States and tax all income earned outside the United States at the same rate as income earned in the United States.

3. Eliminate all favored income tax rates such as the income tax rate for hedge fund managers.

4. Pass a permanent tax cut for the middle class at the same rate as the Bush tax cut effective January 1, 2011 with an upper limit on income equal to three times the FICA taxable limit. Specifically, pass a permanent tax cut at the same rate as the Bush tax cut for Americans with income less than $320,400 (3 x $106,800) effective January 1, 2011. In subsequent years, as the FICA taxable limit is raised the upper limit on the annual income for this tax cut would go up by three times as much as the increase in the FICA limit.

5. Pass a temporary tax increase on income above one million dollars by twice the rate of the Bush tax cut retroactive to January 1, 2006 and call this "Temporary Tax Increase on Income Above One Million Dollars". The tax increase would expire at the end of the fiscal year in which we have both a national debt of zero and a projected balanced budget for the subsequent fiscal year. This temporary tax increase is both effective and fair.

6. Require a minimum corporate income tax on gross income at twice the rate of the Bush tax cut with no exceptions. No Chapter S exception. No non-profit exception. No small business exception. No partnership exception. No exceptions at all.

7. Require a minimum income tax on gross personal income at twice the rate of the Bush tax cut for all income above the FICA taxable limit with no other exceptions at all.

In the past decade, more jobs and technology have been shipped abroad than the sum of all jobs and technology shipped abroad in all the previous decades in American history. What did we get back? No jobs in return. In the past decade, Americans were sold mortgages they could not afford, mortgages designed to fail, and securities on those mortgages with Wall Street betting the mortgages would fail causing Americans to loose their home, the down payment, the equity, and their retirement investments. In the past decade, Wall Street, banks, and other financial institutions gave us credit card rates that would make the Bonanno family and the rest of the Mafia envious, applied payments to the lowest interest bearing charges instead of applying payments in chronological order in which the charges were made, processed withdrawals before deposits so banks could charge a manufactured overdraft fee, and so on. In the past decade, Americans bailed out Wall Street, banks, and other financial institutions to keep the American economy from going into depression. They accepted the bail outs. What did America get in return? No new jobs. No loans to small business. But Wall Street is now making more money than it made in the past decade. And so why did all this happen in the past decade with no new jobs. For the rich to get richer. For the richer to get very rich. For the very rich to get filthy rich. And for the filthy rich to get obscenely rich.

I believe just the above justifies the Temporary Tax Increase on Income Above One Million Dollars being made retroactively only to January 1, 2006.

In closing, as the outlaws of the Great Depression would rob banks because that's where the money was, so should America tax the super rich to help eliminate the national debt because they have all the money and because the super rich created such a large national debt by not delivering on the promise that if we made them more rich we in turn would be financially better off with better jobs and more jobs and paying more taxes.

Anthony Masciulli, 138-162 MLK Blvd, Apt 902, Newark, NJ 07104

[Amusedbyitall]

You had me up to the last two. If your going to tax income for those making over $300,000.00, then eliminating S-corporations would create a double tax on income. In short, almost all profits made by the S-corporation is paid to its shareholders each year, and the shareholder pays income tax on the dividend. You need to refine rather than eliminate the non-profit corporations. If you pay your executives over $55,000.00 a year salaries, or in that neighborhood as I have not researched this area as much and am open to other suggestions, then the corporation loses the "non-profit" standing. The minmum gross tax should remain as it is to stimulate investment and employment. If you raise the minimum gross tax, you will force layoffs. The same would be true of your other tax eliminations, in my opinion. There will always be those that abuse any tax system. The answer is to stiffen penalties against these evaders to the same degree that the IRS prosecutes its detractors.

Another point you brought up, Rep. Pelosi, and anyone reading my postings know, I am no great fan of her, has at least taken a morale if not ethical stand on this issue. Her family will be one of the harder hit by allowing the Bush tax cuts to expire. Through her husband, she is one of the wealthiest people in congress. It's a shame that we have to look to Rep. Pelosi for moral guidance over the President.

[stephangoodwin]

I'm done voting for the Democratic party. If they can't even deliver the illusion of sanity that their own platform demands of them when they have super majorities, what good are they?

I'm voting Socialist or Green party from now on. Count me in as a liberal in revolt...and revolted at this President's actions. I never expected much from such a middle-of-the-road Democrat, but I didn't expect Bush the Third.

[thetruthwillout]

I agree with you; however, when it gets down to it they are the lesser of two evils. Unfortunately, voting outside the two parties is throwing your vote away, unless you can get more people willing to vote with you. Even if we don't win, we need to make our voices heard and the best way to do that is to get more people to vote outside the two-party system.

[Amusedbyitall]

The revolt against Obama is not limited to the liberals in the Democratic Party. Fiscal conservatives in the Democratic Party, like myself, depended upon extending the unemployment benefits without drastically raising the deficit b allowing the tax cuts for the rich to expire. Obama betrayed those who supported him on common sense fiscal grounds. There will be a Democratic primary battle in 2012.

[stephangoodwin]

<i>There will be a Democratic primary battle in 2012.</i>

Oh, I really really REALLY hope so!

[hhandyman]

Its past time that cbs got of the Murdock Bandwagon and startd reporting news not fox regergerated attenpt at news. if its in USA today The Wall street Journal or the many fox outlets it is non news it is propaganda and little more than that.
I like Katie Curic she knows how to report get off her case and let her dig into the news as she did the last time the cheerleader hunter x governer of alaska had an honest interview.

Whovever it is that tightend the leash on Katie needs to be fired.