After President Obama unveiled his much-ballyhooed jobs program last week, Republicans asked, reasonably enough, how the country was going to pay for it.Today, the White House provided the answer: tax increases on “wealthy Americans,” with a faster depreciation schedule for private jets and higher taxes on “carried interest” thrown in just for old time’s sake.
Two things spring immediately to mind.
One, President Obama’s American Jobs Act is now dead on arrival in the Republican-controlled US House of Representatives. Speaker Boehner and company could not possibly have been more clear that very large spending cuts had to precede tax increases before the latter would even be considered.
Two, President Obama and his political advisors knew that by “funding” the American Jobs Act with these tax increases, the plan would be doomed immediately.
So why did they do it? Why go through the whole month-long drama of building up expectations? Why the nationally-televised address to a special session of Congress? Why the subsequent campaigning for the plan after the speech? Why take us through all that, if you know that four days later you’re going to offer up a “pay-for” plan that renders the whole thing moot?
Politics, of course, is the answer. The Obama White House is a 24/7 polling operation. The one thing that keeps coming back from their endless surveying of public opinion is that tax increases on the “rich” are overwhelmingly popular across wide swaths of the electorate. The level of support nationally for such tax increases averages about 70 per cent.
The White House calculation appears to be that the “pay-for” provisions are worth the political gain even if they doom the much-ballyhooed plan. Republicans will have to defend “tax breaks for the rich,” tax breaks for “hedge-fund managers,” even tax breaks for “private jet owners;” all at the expense of the jobless and economic recovery and America itself. Obama fights for the little guy. Republicans fight for the fat cats. Etcetera, etcetera, ad nauseum.
Will this political posturing work? Who knows? But it bodes ill for any kind of economic stimulus arising from the American Jobs Act. But that’s beside the point. The point of the American Jobs Act wasn’t to pass it. The point of the American Jobs Act was to set up a (supposedly) winning political argument for the Obama re-election campaign.
There is an alternative explanation for how this all played out: the White House didn’t think it through. One sincerely hopes this isn’t the case.
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