GOP Wins Bush Tax Cut Fight

As I write this, President Obama is on the air announcing a deal on the Bush tax cuts: They all stay alive for 2 more years, while unemployment gets extended for another 13 months.  The latter was bound to happen anyway; the former was what all the fuss has been about.

Extending the Bush tax cuts is good policy and, for the Republicans, good politics.  Why did the president give in?  Presumably, because he can read a poll as well as anyone.

It should be noted at this point that the Bush tax cuts would have been permanent from the beginning if not for Democratic obstinacy when they were first passed.  Now, businesses and families will have some clarity on the tax environment over the next couple of years.  With taxes not set to rise at the stroke of midnight on January 1, 2011, businesses and families can plan.  They'll have more of their own money at their disposal, thanks to this deal.  That's a win for families on policy, and the Republicans were on the side that won.

From a communications point of view, the Republicans clearly won the debate and have set themselves and their presidential candidate up to win the debate again in two years.  Though President Obama agreed to the deal, he gets little credit for anything called the "Bush tax cuts," which was among the things he campaigned against in 2008.  In 2012, the Bush tax cuts will be part of the economic debate again.  Assuming that the economy is stronger by then, which is not a safe assumption at all, he will benefit from that, but the expiration of the Bush tax cuts will again endanger the economy.  If he stands in the way of extending them in 2012, he will lose that debate.  If he jumps to extend them, then his own left-wing base will howl and scream, as it's doing today.  The Bush tax cuts, and their impermanence, have put President Obama between the proverbial rock and hard place.

The GOP held strong and won here.  Elections do have consequences.  It's tough to see them making such a strong stand, and winning it, if the 2010 mid-term "shellacking" hadn't happened.