Obama’s Tax Cave Is Worse Than Expected

Based on what The New York Times describes as President Obama’s “substantial concessions to Republicans,” Democrats in Congress have reason to fret. Not only did Obama agree to extend the Bush tax cuts for the wealthy, but he caved in to Republican demands to neuter the estate tax.

Republicans otherwise refused to extend unemployment benefits at a cost of $56 billion, because, you know, that would add to the deficit. Apparently a deficit hawk is someone who adds to the deficit — in this case $900 billion over two years.

Unemployment benefits will be extended as part of the compromise. — PZS

The New York Times:

Congressional Republicans in recent days have blocked efforts by Democrats to extend the jobless aid, saying they would insist on offsetting the $56 billion cost with spending cuts elsewhere. White House officials said they feared a long standoff that would see benefits end for millions of Americans over the holiday season and in the months ahead.

But Mr. Obama made substantial concessions to Republicans. In addition to dropping his opposition to any extension of the current income tax rates on income above $250,000 for couples and $200,000 for individuals, he agreed to a deal on the federal estate tax that infuriated many Democrats. The deal would ultimately set an exemption of $5 million per person and a maximum rate of 35 percent — a higher exemption and far lower rate than many Democrats wanted.

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