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Blog Buzz: Tax cut reaction, day 2

Reflecting on the White House's tax cut proposal released last night, some liberal bloggers seemed to come around to the deal as an acceptable compromise. Conservative bloggers weren't thrilled with some of the deal's outcomes either, but overall seemed satisfied, not to mention heartened at the prospect of renewing the "raising taxes" debate again in two years.

The Washington Monthly's Steve Benen called the deal "not that bad."

The president secured a 13-month extension of aid for the long-term unemployed, reportedly his top priority. The deal also includes a reduction in the Social Security payroll tax, which will give workers a boost in their paychecks; an expanded earned-income tax credit; the continuation of a college-tuition tax credit; and new opportunities for businesses to write off the cost of some equipment purchases.

Obama was able to secure help for the middle class and the unemployed; Republicans were able to keep breaks for the wealthy. In other words, both sides got to fight for their natural constituencies.

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All things being equal, I suspected the deal to be worse. Call that the soft bigotry of low expectations if you will, but I'm actually feeling slightly relieved.

Balloon Juice's E.D. Kain also saw the agreement as necessary, but not devoid of political benefit if the president can use it to flaunt his fiscal credentials in two years.

This was smart politics from Obama even if it does mean he’ll have to fend off attacks from within his own party. Extending the tax cuts for the wealthiest Americans may be a bitter pill to swallow for many progressives, but it’s not that high of a price to pay for a serious shot of stimulus. I would actually like to see more stimulus in the form of direct payments to middle and low income Americans, followed by some long-term structural and tax reforms to shore up the long term deficit. But deficits, while important for our future, are a ways down the list during a recession. First comes economic recovery, then comes whatever necessary cuts and tax reforms necessary to get our fiscal ship in order.

Conservative blogger Francis Cianfrocca, writing at Red State, appeared largely satisfied with the proposal's outcome even if he believed the tax-cutting measures did not go far enough.

Political calculus: do not be surprised if this ends up playing as a win for Obama. He’s going to say that he’s really a moderate leader capable of making the compromises that it takes to govern. My guess is that by giving us so much of what we wanted, he strengthens his political position, not the reverse.

On the economic effects: YES. Removing the uncertainty surrounding tax rates will make a lot of businesspeople feel more confident about planning for growth and hiring. It doesn’t remove the fundamental drag on business performance in the US, which is poor final demand, but it helps.

NRO's Jim Geraghty listed all the items on which Obama has not made progress, in a post titled "The 2008 Obama Would Denounce the 2010 Obama."

The liberal outrage over the tax deal is warranted. They, too, are learning that all of Obama’s statements come with expiration dates, and that they labored, long and hard, throughout 2007 and 2008 to elect a man who will, in the end, ratify most of President Bush’s policy choices.

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Domestically, there will be no Card Check. There will be no cap-and-trade. There will be no amnesty, no DREAM act. The man who denounced Bush’s recess appointments now uses the tool regularly. Bill language isn’t posted online for five days before signed into law. NAFTA will not be renegotiated; new trade deals with countries like South Korea are signed instead. No “windfall profit tax” will be enacted. He has frozen federal workers’ pay. His deficit commission rejected a VAT and proposed a slew of spending cuts that liberals find unacceptable.

Obamacare? The GOP is hell-bent on repealing it. If Obama loses in 2012, it’s gone.

But hey, liberals, cheer up. You got the Lilly Ledbetter Pay Act.

Hot Air's Ed Morrissey wrote that one boon for Republicans would be their ability to set up the 2012 elections "as a debate on pending across-the-board tax hikes," and that none of the Democratic proposals in the deal will improve the economy to such dramatic effect that Democrats will reap political benefits.

The extension of unemployment benefits will expire in the 2012 primaries, which will create another debate on the wisdom of continued government interventions — but also will keep unemployment higher for longer, which won’t help Obama in 2012. The estate tax only goes up to 35% after the first $5 million, rather than 55% after the first $3.5 million, as Democrats demanded (and would have gotten had they bothered to deal with it in 2009 rather than wait until now). The payroll tax holiday and the tax rate extensions may help a little in economic growth, but tax rate consistency only gets us a little further down the road and won’t be a game changer. (Increases, though, would have been disastrous.)

Mostly, though, the deal and the Democratic furor over it shows that the Republicans came to lead and get things accomplished, not just act as obstructionists for the next two years. That will add considerable credibility to the GOP from the independents who flocked to Republicans in this past midterm cycle. That’s a good, not great, deal for the Republicans in an environment where they have limited bargaining power. If Democrats end up sabotaging this deal in Congress, well, so much the better. They will become the obstructionists instead, and will have made the argument for their own oblivion in the next election.