In October, President Obama signed legislation implementing free-trade deals with South Korea, Panama, and Colombia. Bet you probably hadn’t heard about that. The trade deals were the biggest since NAFTA—which President Clinton signed into law after a titanic fight. Guided by his silky-smooth U.S. trade representative, Ron Kirk, Obama’s deals glided through the GOP House and the Democratic Senate. No fight, no credit.
Republicans should have adopted the same strategy on extending Obama’s payroll-tax cut. Like free trade, tax cuts are completely compatible with Republican orthodoxy. Heck, they are Republican orthodoxy. When we had a surplus, the GOP’s answer was to cut taxes. When the surplus turned into deficit (in large part because of the Bush tax cuts), the Republicans supported more tax cuts. In time of peace they argued for (wait for it) tax cuts. When we were involved in two wars, costing billions of dollars a month, then–House Republican leader Tom DeLay said, “Nothing is more important in the face of war than cutting taxes.”
How on earth did the GOP maneuver itself into a position where it is opposing tax cuts for the middle class and Barack Obama is fighting for them?
Leading Republicans say they’ve taken this position out of principled opposition to “class warfare.” But come on: tacking an additional 1.9 percent tax on income over $1 million isn’t class warfare. It’s not even class spitballs. Don’t believe me? Twenty-seven Senate Republicans voted against the Republican version of the middle-class tax cut, which deleted the millionaires’ surtax and replaced it with a federal pay freeze and spending cuts.
So something else is going on here, and I’m starting to think the GOP just doesn’t like the middle-class tax cut. But why? Cutting the payroll tax for working people is good for the economy. The research firm Macroeconomic Advisers projects that the Obama middle-class tax cut will create 1.3 million new jobs by the end of next year and 800,000 more in 2013. Former McCain economic adviser Mark Zandi of Moody’s Analytics says the payroll-tax cut has prevented us from slipping back into a recession. If an extension of the cut does not pass, he told MSNBC, “at the very minimum, we’ll likely go into recession.”
Some Republicans raise the valid concern that cutting the payroll tax, which funds Social Security, could undermine the retirement plan. But that’s why the millionaires’ surtax is so important—to replenish the revenue Social Security would otherwise lose. Voters are coming to the conclusion that the GOP cares more about protecting tax breaks for millionaires than the benefits that millions of middle-class retirees depend on.
An alternative explanation is that the GOP is following the strategy of its intellectual leader, Rush Limbaugh, who famously said of the president, “I hope he fails.”
The Republicans seem to believe that if they tank the economy, they will be able to take down Obama and then rule over the ruins. Back in 2010, Senate GOP leader Mitch McConnell declared that “the single most important thing we want to achieve is for President Obama to be a one-term president.” And the single best way to defeat Obama is to sabotage the economy.
But there’s just one problem with that strategy: the Republicans have no choice but to pursue it in broad daylight. And the trouble is, if they kill Obama’s middle-class tax cut, and Obama’s American Jobs Act, and his extension of unemployment benefits, and everything else he’s advocating to revive the economy, then fair-minded voters will likely blame the Republicans, and not the president, for the catastrophic results.
I cannot think of a time when the economy declined but the president was not blamed—but this may be the first. If the Republicans were smart, they would do on taxes what they did on trade: quietly pass Obama’s proposals, knowing full well that even a million new jobs will not be enough to climb out of the hole Obama inherited. (Fourteen million Americans are unemployed.) The economy isn’t giving Obama enough jobs, but the Republicans are giving him the next best thing: a villain to blame for the poor economy. By killing Obama’s jobs agenda, Republicans may just save his presidency.