Taken in isolation the "bipartisan" tax cut deal seems like a reasonable measure in the midst of a serious economic recession. But put in its wider political and economic context it is an unmitigated disaster. It's a disaster because it is based on "supply-side" premises that Obama appears to have fully embraced. And it's a disaster because the wrecking crew that's coming to Washington in January will point to the billions added to the deficit as yet another excuse to demand even deeper cuts in every federal program that might remotely benefit working people.
Any "gains" in income for most people the tax breaks might create will be more than nullified by the draconian cuts in health and human services, education, even infrastructure projects that are certain to follow. At the state and local level there will be more lay-offs of public employees, more shutting down of public sector institutions, more budget cuts, as the onslaught against any program that might improve the living standards of working people escalates.
Worse still, the tax deal drives a bulldozer right through the middle of the payroll tax stripping billions out of Social Security and Medicare that will be used to justify even more cuts. The Republicans will demand that the payroll tax reduction be made permanent -- and Obama will give it to them. Younger workers will be funneled into 401ks manipulated by Wall Street, the retirement age will go up, COLAs will be a thing of the past, and the monthly stipends of the elderly, the disabled, widows and orphans, will be reduced.
It's not surprising that the Democratic base is outraged and disappointed. Obama raised expectations to a new high in 2008 with his soaring rhetoric that sounded at the time to be a clarion call for a reaffirmation of core liberal-Democratic values (after so many years in the wilderness and the country suffering for it). People didn't put their faith in Obama, but their hope; and hope is a much more tenuous bond. They feel betrayed because they didn't think they were voting for business as usual in Washington, but business as usual is what they got.
Whatever President Obama accomplished during his first two years in office, with most of the heavy lifting thrown on Nancy Pelosi's shoulders, his decision to normalize the sweeping changes in American governance of the George W. Bush period will likely neutralize any lasting positive effects for Democrats.
Even George W. Bush conceded that Wall Street "got drunk." Yet somehow he passed the hangover onto us. It turned out to provide the perfect context of crisis for rolling back social programs the Republicans never supported. Sweet.
Bush was never a "conservative." A conservative would have repealed the tax cuts after 9-11 created new challenges from international terrorism sure to cost billions, as well as the need to rebuild New York City and the Pentagon and reform the national security institutions. The tax deal of 2010 is a bizarre "bipartisan" enshrining into law of Bush's fiscal recklessness of 2001.
Obama has normalized the Bush era by accepting his premises about the "war on terror," failing to close Guantanamo or hold anyone accountable (even John Yoo) for torture. He normalized the Bush era by escalating Bush's futile counterinsurgency war in Afghanistan, making it all the more difficult for the United States to disengage later on. And now, if the "bipartisan" tax deal goes through he will normalize (and even institutionalize) Bush's supply-side economics that never ceases in its drive to bestow boons to the richest people and corporations in the country.
Bush's tax trap set nearly a decade ago sprung right on schedule to ensnare a Democratic president. It's slightly ironic that a President who big corporations have targeted with hundreds of millions of dollars to destroy would turn around and give them and their CEOs everything they ever wanted. Stuffing more cash into the already bulging pockets of billionaires and millionaires, after a 30-year period that has created Gilded Age levels of inequality, is unwise public policy sure to come back to bite Obama later. Yet he skips happily into the mouth of the wolf.