Class war politics
Posted: Tuesday, February 21, 2012 7:00 pm
By DOUGLAS COHN
and ELEANOR CLIFT
WASHINGTON — Critics assail President Obama’s budget as a political document. They’re right, and in an election year, that only adds to its importance. Obama wants to scale back on deficit reduction and preserve investments in education, social programs and clean energy. He wants to raise taxes on the very rich to somewhat even the playing field after three decades of the folks at the top seeing their incomes climb while wages for everybody else remain stagnant.
Republicans greeted the Obama budget with their usual opposition, dubbing it “Debt on arrival,” a play on “Dead on Arrival,” for those who might have missed the humor.
The problem for the GOP, nobody is really laughing. Their presidential candidates are locked in a nasty battle for the nomination, and Republicans in the Congress are feeling the heat from voters tired of partisan bickering.
With a whimper and not a bang, Republicans caved on extending the payroll tax cut, along with unemployment insurance benefits and the so-called “doc fix” that spares doctors from taking a big cut in fees paid by Medicare. The GOP is still hanging tough against boosting the tax rate on the highest bracket of taxpayers, returning it to where it was during the Clinton years.
Republicans nixed a surcharge on millionaires and billionaires, but Obama hasn’t given up the fight. He’s included in his budget the so-called Buffet Rule, named after billionaire investor Warren Buffet, who says his secretary pays a higher rate on her much lower income than he does on his fortune. Republicans counter that is because much of Buffet’s income comes from investments, and that he should pay his secretary more. Still, they are feeling the pain from an election-year debate that’s not going their way.
Obama takes a run at the practice known as “carried interest,” which allows executives at a hedge fund to pay a much lower dividend rate on their income. Mitt Romney benefited enormously from this provision in building his fortune, and it makes no moral or economic sense to continue this preferential treatment for a select few at the very top of the income pyramid.
If you lay out Obama’s budget plans and put them next to the 59-point economic plan that Romney proposes, the differences are visually stark. Romney would have the taxes of people at the lower and middle end of the income scale rise until about $250,000, and then the line goes down. Obama’s budget would do the reverse, with the lowest income people seeing a reduction in their taxes while the line moves up for the highest-income earners,
The numbers tell the story. One party favors the rich, the other the common man. For history buffs, it’s a replay of the fight between the Democratic-Republican Party and the Federalists in the election of 1800. The Federalist Party, which was started by Alexander Hamilton, a wealthy banker, favored a strong central government and advocated only white men who owned land have the right to vote. It was the original party of the rich, and a forerunner of the Republican Party.
The Democratic-Republican Party, founded by Thomas Jefferson and James Madison, wanted less federal government and more state freedoms that would benefit what they called “the common man,” mostly farmers at the time.
It became the Democratic Party, and with Andrew Jackson’s election in 1828, the Democrats solidified their image as the party of the common man, a description Democrats still embrace though a fair share of the votes from working men and women go to the Republican Party, often on the basis of cultural and social issues instead of economic interests.
It is these voters that Obama’s budget seeks to reach, and Republicans couldn’t be doing a better job of making the president’s case. Published in The Messenger 2.21.12