On Tax and Unemployment Insurance Deal, Obama Chose Jobs and Working Families

On Tax and Unemployment Insurance Deal, Obama Chose Jobs and Working Families

Progressives need to be clear and honest about what just happened on taxes and the economy. Since the midterm election, it has been clear that the Congressional Republican Leadership was perfectly prepared to see middle and working class tax cuts expire and extended unemployment insurance end unless millionaire tax cuts were extended. All the talk about decoupling and extending middle class tax cuts from the cuts for millionaires was wishful thinking at best and just political talk at worst and no strategy could have produced it during the lame duck.

So President Obama was faced with a choice: he could trade a few more years of unnecessary and wasteful tax breaks for the rich in exchange for assistance to the unemployed, additional targeted tax relief for working families through the refundable earned income tax credit and child credit, and keeping tax rates low for 98 percent of Americans; alternatively he could allow taxes to rise on everyone starting in January. At the end of the day, President Obama decided he couldn’t abandon the millions of Americans who are struggling to keep their families afloat, who are diligently searching for work, and who simply cannot afford higher taxes right now, even though the Congressional Republican Leadership was more than happy to do so if we wouldn't pay their ransom.

It was a steep price, but this deal will mean about 2 million jobs saved or created over the next two years. On balance, I think the President was right to choose helping working Americans over a December conflagration. But the question hanging over Washington and the country today is how will he avoid repeating the same scenario being played out again and again for the next two years? That’s a question that is keeping me awake at night.

John D. Podesta is President and Chief Executive Officer of the Center for American

Compromises are just that. The part of this compromise which is difficult to impossible to accept is the backdoor attack on Social Security.