Barack Obama won the great tax-cut showdown of 2010 - and House Democrats don't have a clue that he did. In the deal struck this week, the president negotiated the biggest stimulus in American history, larger than his $814 billion 2009 stimulus package. It will pump a trillion borrowed Chinese dollars into the U.S. economy over the next two years - which just happen to be the two years of the run-up to the next presidential election. This is a defeat?
If Obama had asked for a second stimulus directly, he would have been laughed out of town. Stimulus I was so reviled that the Democrats banished the word from their lexicon throughout the 2010 campaign. And yet, despite a very weak post-election hand, Obama got the Republicans to offer to increase spending and cut taxes by $990 billion over two years. Two-thirds of that is above and beyond extension of the Bush tax cuts but includes such urgent national necessities as windmill subsidies.
No mean achievement. After all, these are the same Republicans who spent 2010 running on limited government and reducing debt. And this budget busting occurs less than a week after the president's deficit commission had supposedly signaled a new national consensus of austerity and frugality.
Some Republicans are crowing that Stimulus II is the Republican way - mostly tax cuts - rather than the Democrats' spending orgy of Stimulus I. That's consolation? This just means that Republicans are two years too late. Stimulus II will still blow another near-$1 trillion hole in the budget.
At great cost that will have to be paid after this newest free lunch, the package will add as much as 1 percent to GDP and lower the unemployment rate by about 1.5 percentage points. That could easily be the difference between victory and defeat in 2012.
Obama is no fool. While getting Republicans to boost his own reelection chances, he gets them to make a mockery of their newfound, second-chance, post-Bush, Tea-Party, this-time-we're-serious persona of debt-averse fiscal responsibility.
Grumpy columnist Paul Krugman thinks the opposite, but all of his columns are like A Few Minutes With Eeyore.
I'll side with grumpy Krauthammer this round. The details of the deal are, increasingly, showing it was a typical Washington Christmas tree- everybody gets some presents. But the GOP ceded some valuable talk-show real estate: they actually negotiated with the President. They got the thing they most wanted. They gave up on trying to screw the poor for a year or so, especially on unemployment compensation.
It'll also be harder to them- or at least the Crazy Eyes side of their conference- to argue the President is an illegitimate leader.
They just made a deal with him to spend $858 billion.
You don't make deals with people who don't hold office legitimately- an illegitimate leader has no legal authority to hold up his end of the deal.
And, regrettably, the GOP turned into the Wizard of Oz when it comes to being serious about deficit reduction. You just can't campaign for years against deficits, then pivot and add another trillion bucks to the ledger just in time for the debt ceiling vote.
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