Political Highlights, December 7, 2010: Obama Press Conference Discussing Bipartisan Agreement on Bush Tax Cuts Extension with Republicans

By Bonnie K. Goodman

Ms. Goodman is the Editor / Features Editor at HNN. She has a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University.

OBAMA PRESIDENCY & THE 111TH & 112TH CONGRESS:

President Obama News Conference

THE HEADLINES….

  • Democrats demand changes in Obama-GOP tax deal: Disappointed Democratic congressional leaders demanded changes in the White House’s tax deal with Republicans on Tuesday despite a spirited argument by President Barack Obama that concessions were preferable to higher taxes for millions of Americans.
    In a remarkable political role reversal, Republicans lined up to support the package, while lawmakers of the president’s party said they were prepared to oppose it. Liberal Sen. Bernie Sanders, I-Vt., pledged to “do everything I can to defeat this,” including a filibuster to prevent a final vote.
    The deal includes an extension of expiring Bush-era tax cuts for all income levels — not just for lower and middle-income taxpayers, as Democrats wanted. It also contains a renewal of jobless benefits due to expire in a few weeks, and a one-year cut in Social Security taxes paid by workers.
    Other elements would loosen the estate tax and provide breaks for businesses to spur hiring. Officials said that overall, the proposal could add $900 billion to the federal deficit over two years.
    Democratic opposition focused chiefly on two parts of the deal that marked concessions to Republicans — the decision to let expiring tax cuts remain in effect for people in upper incomes, and a change in the estate tax that the GOP has long sought…. – AP, 12-7-10
  • Obama defends tax deal at news conference: One day after announcing a framework for a deal that would preserve the very tax cuts for the wealthy that he promised would be allowed expire, a fiery President Obama today defended the agreement, saying that he did not want to hurt the American people or the economy with a protracted political fight.
    Under the agreement — which has angered many Democrats, especially in the House — the Bush-era tax rates would be extended for two years for people at all income levels, unemployment insurance would be extended for 13 months, and payroll taxes would be decreased by 2 percentage points for one year. According to a fact sheet provided by the White House, the deal would allow a typical working family to avoid a $3,000 tax increase next year.
    At a hastily convened news conference in the press briefing room, the president vowed to continue the debate over tax cuts for the rich, saying he would fight to end them when they expire again. In a nod to his pragmatic governing philosophy, Obama said a refusal to compromise on any issue would lead nowhere and he asked members of his own party to remember “this is a long game, not a short game.”
    “This country was founded on compromise,” Obama said. “I couldn’t go through the front door at this country’s founding. And, you know, if we were really thinking about ideal positions, we wouldn’t have a union. So my job is to make sure that we have a North Star out there: What is helping the American people live out their lives?”… – MSNBC, 12-7-10
  • Obama urges Democrats to support tax cut deal: President Obama on Tuesday defended the deal he reached with Republicans on extending a broad range of expiring tax cuts, saying he did not want Americans to be harmed while he engages in a long-term political fight with the GOP. Obama held a hastily arranged news conference to answer questions on the agreement struck late Monday. Vice President Biden went to Capitol Hill to sell the agreement to Democrats who played no part in reaching a compromise Obama said he struck because Republicans would not budge.
    “The deal we struck here … gives us time to have a political battle,” Obama said, adding that he was unwilling to see millions of Americans “immediately damaged at a time when the economy is about to recover.”…
    “To my Democratic friends, what I’d suggest is let’s make sure that we understand this is a long game. This is not a short game,” Obama said….
    “In order to get stuff done, we’re going to have to compromise,” Obama said. “This country was founded on compromise.”… – USA Today, 12-7-10
  • Tax Deal Suggests New Path for Obama: President Obama announced a tentative deal with Congressional Republicans on Monday to extend the Bush-era tax cuts at all income levels for two years as part of a package that would also keep benefits flowing to the long-term unemployed, cut payroll taxes for all workers for a year and take other steps to bolster the economy.
    President Obama, who on Monday visited Greensboro, N.C., announced from the White House his deal with the Republicans. The deal appeared to resolve the first major standoff since the midterm elections between the White House and newly empowered Republicans on Capitol Hill. But it also highlighted the strains Mr. Obama faces in his own party as he navigates between a desire to get things done and a retreat from his own positions and the principles of many liberals.
    Congressional Democrats pointedly noted that they had yet to agree to any deal, even as many Republicans signaled that they would go along.
    Mr. Obama said that he did not like some elements of the framework, but that he had agreed to it to avoid having taxes increase for middle class Americans at the end of the year. He said that in return for agreeing to Republican demands that income tax rates not go up on upper-income brackets, he had secured substantial assistance to lower- and middle-income workers as well as the unemployed.
    “It’s not perfect, but this compromise is an essential step on the road to recovery,” Mr. Obama said. “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.”… – NYT, 12-6-10
  • Payroll Tax Holiday Discussed in Talks on Bush Rates: The Obama administration proposed a year-long reduction in payroll taxes of 2 percentage points as part of a broader compromise to extend Bush-era tax cuts temporarily, a congressional aide said. The proposed reduction was offered as an alternative to renewing the “Making Work Pay” tax credit, a creation of President Barack Obama that expires Dec. 31 along with lower income-tax rates enacted in 2001 and 2003, the aide said, speaking on condition of anonymity. Some Senate Republicans oppose the credit.
    Negotiators also are discussing including Obama’s proposal to allow a full deduction for equipment purchases that currently must be deducted over time, an administration official said. The proposal would accelerate $200 billion in tax savings for companies in the first year and benefit 1.5 million companies and several million individuals who run businesses, according to White House estimates…. – Bloomberg, 12-6-10
  • Source: White House presents proposed tax deal to Democratic leaders: President Barack Obama presented congressional Democratic leaders Monday with a proposed deal with Republicans that would extend Bush-era tax cuts for two years and unemployment benefits for 13 months while also setting the estate tax at 35% for two years on inheritances worth more than $5 million, a senior Democratic source told CNN.
    The deal also includes a temporary 2% reduction in the payroll tax to replace Obama’s “making work pay” tax credit from the 2009 economic stimulus package for lower-income Americans, the senior Democratic source said.
    As currently crafted, the deal would prohibit amendments by either party, according to the source, who spoke on condition of not being identified by name…. – CNN, 12-6-10

QUOTES

  • President Obama on the Middle Class Tax Cuts and Unemployment Insurance Agreement: “A Good Deal For The American People”:
    I’m focused on making sure that tens of millions of hardworking Americans are not seeing their paychecks shrink on January 1st just because the folks here in Washington are busy trying to score political points.
    And because of this agreement, middle-class Americans won’t see their taxes go up on January 1st, which is what I promised — a promise I made during the campaign, a promise I made as President.
    Because of this agreement, 2 million Americans who lost their jobs and are looking for work will be able to pay their rent and put food on their table. And in exchange for a temporary extension of the high-income tax breaks — not a permanent but a temporary extension — a policy that I opposed but that Republicans are unwilling to budge on, this agreement preserves additional tax cuts for the middle class that I fought for and that Republicans opposed two years ago.
    I’ll cite three of them. Number one, if you are a parent trying to raise your child or pay college tuition, you will continue to see tax breaks next year. Second, if you’re a small business looking to invest and grow, you’ll have a tax cut next year. Third, as a result of this agreement, we will cut payroll taxes in 2011, which will add about $1,000 to the take-home pay of a typical family.
    So this isn’t an abstract debate. This is real money for real people that will make a real difference in the lives of the folks who sent us here. It will make a real difference in the pace of job creation and economic growth. In other words, it’s a good deal for the American people.
    Now, I know there are some who would have preferred a protracted political fight, even if it had meant higher taxes for all Americans, even if it had meant an end to unemployment insurance for those who are desperately looking for work.
    And I understand the desire for a fight. I’m sympathetic to that. I’m as opposed to the high-end tax cuts today as I’ve been for years. In the long run, we simply can’t afford them. And when they expire in two years, I will fight to end them, just as I suspect the Republican Party may fight to end the middle-class tax cuts that I’ve championed and that they’ve opposed.
    So we’re going to keep on having this debate. We’re going to keep on having this battle. But in the meantime I’m not here to play games with the American people or the health of our economy. My job is to do whatever I can to get this economy moving. My job is to do whatever I can to spur job creation. My job is to look out for middle-class families who are struggling right now to get by and Americans who are out of work through no fault of their own.
    A long political fight that carried over into next year might have been good politics, but it would be a bad deal for the economy and it would be a bad deal for the American people. And my responsibility as President is to do what’s right for the American people. That’s a responsibility I intend to uphold as long as I am in this office…. – WH, 12-7-10TranscriptMp3Mp4 Video
  • President Barack Obama at December 7, 2010 Press Conference: At his hastily called news conference, Obama bristled at times, casting himself in the role of compromiser-in-chief with the best interests of the economy and public in mind.
    “I’m not here to play games with the American people or the health of the economy,” Obama said of his day-old deal, which is designed to avert a scheduled Jan. 1 expiration of tax cuts at all income levels. “This isn’t an abstract debate. This is real money, It will make a real difference in the lives of people who sent us here,” Obama said.
  • Senate Majority Leader Harry Reid, D-Nev: The compromise is “something that’s not done yet. We’re going to have to do some more work,” he said after a closed door meeting with Vice President Joe Biden and members of the Democratic rank-and-file.
  • Across the Capitol, Speaker Nancy Pelosi issued a statement that said: “Republicans have held the middle class hostage for provisions that benefit only the wealthiest 3%, do not create jobs and add tens of billions of dollars to the deficit…. We will continue discussions with the president and our caucus in the days ahead.”
  • Text Obama’s Remarks on the Tax Compromise: Following is a text of President Obama’s remarks on Monday in which he announced a tentative deal with Congressional Republicans to extend the Bush-era tax cuts, as released by the White House:For the past few weeks there’s been a lot of talk around Washington about taxes and there’s been a lot of political positioning between the two parties. But around kitchen tables, Americans are asking just one question: Are we going to allow their taxes to go up on January 1st, or will we meet our responsibilities to resolve our differences and do what’s necessary to speed up the recovery and get people back to work?
    Now, there’s no doubt that the differences between the parties are real and they are profound. Ever since I started running for this office I’ve said that we should only extend the tax cuts for the middle class. These are the Americans who’ve taken the biggest hit not only from this recession but from nearly a decade of costs that have gone up while their paychecks have not. It would be a grave injustice to let taxes increase for these Americans right now. And it would deal a serious blow to our economic recovery.
    Now, Republicans have a different view. They believe that we should also make permanent the tax cuts for the wealthiest 2 percent of Americans. I completely disagree with this. A permanent extension of these tax cuts would cost us $700 billion at a time when we need to start focusing on bringing down our deficit. And economists from all across the political spectrum agree that giving tax cuts to millionaires and billionaires does very little to actually grow our economy.
    This is where the debate has stood for the last couple of weeks. And what is abundantly clear to everyone in this town is that Republicans will block a permanent tax cut for the middle class unless they also get a permanent tax cut for the wealthiest Americans, regardless of the cost or impact on the deficit.
    We saw that in two different votes in the Senate that were taken this weekend. And without a willingness to give on both sides, there’s no reason to believe that this stalemate won’t continue well into next year. This would be a chilling prospect for the American people whose taxes are currently scheduled to go up on January 1st because of arrangements that were made back in 2001 and 2003 under the Bush tax cuts.
    I am not willing to let that happen. I know there’s some people in my own party and in the other party who would rather prolong this battle, even if we can’t reach a compromise. But I’m not willing to let working families across this country become collateral damage for political warfare here in Washington. And I’m not willing to let our economy slip backwards just as we’re pulling ourselves out of this devastating recession.
    I’m not willing to see 2 million Americans who stand to lose their unemployment insurance at the end of this month be put in a situation where they might lose their home or their car or suffer some additional economic catastrophe.
    So, sympathetic as I am to those who prefer a fight over compromise, as much as the political wisdom may dictate fighting over solving problems, it would be the wrong thing to do. The American people didn’t send us here to wage symbolic battles or win symbolic victories. They would much rather have the comfort of knowing that when they open their first paycheck on January of 2011, it won’t be smaller than it was before, all because Washington decided they preferred to have a fight and failed to act…. – NYT, 12-7-10

HISTORIANS & ANALYSTS’ COMMENTS

  • Krugman: Obama’s Tax Defense ‘Enormously Self-Indulgent’: President Obama used a White House news conference to make the case for a new tax cut compromise and appeal to supporters unhappy with the plan. Jeffrey Brown talks to Paul Krugman and Stephen Moore for reaction to the deal…. – PBS Newshour, 12-7-10
  • Julian Zelizer: Focusing on deficit a lose-lose move for Obama: The political pressure on the administration to tackle deficit reduction is mounting. Even before he began negotiations with Republicans last week, President Obama conceded ground by announcing a federal pay freeze. He has given indications that, like President Jimmy Carter in 1978, he intends to shift his focus from unemployment to deficits in response to the “message” from the midterms.
    Yet Obama should be extremely cautious before he shifts the focus of his agenda. Emphasizing deficits over unemployment threatens to carry huge political costs for Democrats. The latest unemployment numbers are a stark reminder of the terrible shape of the economy. Regardless of the conventional wisdom, moreover, the move won’t leave him in a stronger political position. At a time when many economists believe that the time is not right to move toward deficit reduction, given that the economy is still fragile and unstable, Obama is heading into a political trap.
    The major political problem for Obama is that making deficit reduction an immediate priority is unlikely to win over Republican support. The record since 2008 has been that even when Obama gives ground to the GOP on issues like health care and economic policy, Republicans have rarely offered their support in return. Rather, the GOP has demanded more from the president, while continuing to attack the administration as left-of-center….
    The moves will not win over Republicans and at the same time threaten to deepen the rift between Obama and congressional Democrats. All of this will happen and the levels of unemployment won’t abate. Like Carter, Obama can find himself in the worst of both worlds, angering his supporters and doing nothing to appease his opponents, thus becoming increasingly isolated as the 2012 elections approach. – CNN, 12-6-10
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