From MSNBC:
President Obama is open to the idea of discussing an extension of Bush-era tax cuts for all income levels, which one trader said could prevent massive year-end tax selling by investors…
The thing to keep in mind here is “2012 Democrats”. These are Senate Democrats who were elected in the 2006 Democrat victory and now face the music in 2012…with the economy likely to still be sluggish (at best) and Obama likely engaged in (once again, at best) a difficult fight for re-election, these Democrats will want to bring home some “TEA Party” votes to insulate themselves from the Democrat party, as a whole. The reality is that even though there will be only 42 Republican Senators in the “lame duck” session there are enough “2012 Democrats” to put an extension proposal over the top. If Obama is serious about this, he’s just acknowledging harsh reality.
As it is, this the best thing we can do immediately for the economy – give people and businesses the certainty that in 2011 their taxes will not go up. That, in and of itself, will inject a bit of confidence and might even get us back on a genuine growth track by the second half of 2011. Strong growth – ie, growth good enough to get unemployment down to 8% or below – probably can’t come before 2012 (we’ve a very deep hole to dig out of), and won’t come even then unless the new House GOP can force through additional tax cuts, as well as very large spending cuts.
This, however, is the first fruit of victory – there will be more, provided we don’t compromise with Obama and his Democrats. It is Democrats and their liberal, Big Government programs which are supplicants before us – they have to give, and give in a lot, on taxes and spending and only after they do that can we consider going along with anything they might desire. To the victors go the spoils – and in this case, the spoils of political war is getting to set the legislative agenda.
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