Tax Cut Deal: Dean, Ex-Obama Advisers Lament President's Plan

Dean, Ex-Obama Advisers Lament President's Tax-Cut Deal

WASHINGTON -- Obama's decision to craft a deal with Republicans on the Bush tax cuts may have been, as administration officials insist, the product of economic and political necessities. But it has created deep reservoirs of distrust with the president's ability to handle high-stakes negotiations and has compelled even former staffers to level blunt criticisms about the White House's politics.

"I think the president made a huge mistake in supporting any extension of tax cuts," said Steve Hildebrand, the deputy national director of Obama's presidential campaign and a strategist who has long grown sour on Washington. "We can't afford it as a country, and we should recognize that. We need his leadership and bipartisan congressional leadership on it. And the whole idea of negotiating with Republicans who won't negotiate in good faith, it is not the direction the president should be taking."

Hildebrand -- while hesitant to discuss politics over policy -- was reacting to the deal reached Monday evening that would extend the Bush tax rates for two more years in exchange for a 13-month extension of unemployment benefits and other tax cuts provisions the president has long favored. He wasn't the only former Obama hand to speak critically about such an exchange, but the first since the administration announced the deal.

That none of the measures would be paid for was a major problem, Hildebrand and other Democrats stressed. Writing hundreds of billions in tax cuts was simply incompatible with supporting long-standing safety net programs, let alone protecting the country's long-term fiscal security.

"We clearly have to deal with the deficit; it is probably the biggest problem facing the country," said former DNC header Howard Dean. "But you can't deal with the deficit from a political point of view if you say to Democrats, we are going to cut Social Security and Medicare and, by the way, give tax cuts to those who make a million dollars a year."

Antipathy, however, was saved as much for the process of securing the final tax cut package as for the substance of the package itself. Suggesting that the deal could die in the House, Dean echoed a question other Democrats offered in the hours after Obama's announcement: Was enough secured in return?

"I'm not so sure you can get the House to agree to this in conference committee," he said. "And what about the president's other priorities: Don't Ask Don't Tell, START, DREAM Act? I mean, do we not get anything for the $700 billion?"

Certainly, Democrats got something, perhaps even more than expected. Discussing the arrangement with the Huffington Post, senior administration officials stressed that even the labor federation "AFL-CIO did not think...we could keep" the 13 months of unemployment insurance. The actual cost of the provisions that the White House secured, meanwhile, was pricier than the cost of extending the Bush tax cuts for the rich -- $215 billion (including UI) versus $95 billion, all over two years.

And so it wasn't entirely surprising that some more progressive-minded columnists and economists opined favorably (albeit with caveats) about the final package.

As Ezra Klein noted, "the end result is between $200 and $300 billion more in tax breaks, tax credits and unemployment insurance" that is, effectively, a stimulus.

And yet, for skeptical lawmakers, it was hard to ignore how bungled the entire process seemed to be. What could the president have gotten had he stood a bit firmer in negotiations?

"I don't like this at all," Rep. Jerrold Nadler (D-N.Y.) said. "The president has not put up much of a fight."

Moreover, why should the caucus trust the White House to re-litigate this same battle when the tax rates expire two years from now?

"My view is that if you've got a problem, deal with it now and you don't kick it down the road for later," Rep. Peter Welch (D-Vt.), who is whipping members to oppose the deal, told the Huffington Post. "Two years from now, we are going to have the reality of a Republican majority in the House, and we know their point of view on this. They will be for more tax cuts and higher deficit...this was our best chance."

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