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Monday, January 05, 2009

Obama tax-cut proposals: $300 Billion?

This was a surprise to wake up to this morning.

Might not be change the people who voted for Barack Obama were expecting, but it is a pleasant surprise to me and I am betting to many others.

President-elect Barack Obama and congressional Democrats are crafting a plan to offer about $300 billion of tax cuts to individuals and businesses, a move aimed at attracting Republican support for an economic-stimulus package and prodding companies to create jobs.

The size of the proposed tax cuts -- which would account for about 40% of a stimulus package that could reach $775 billion over two years -- is greater than many on both sides of the aisle in Congress had anticipated. It may make it easier to win over Republicans who have stressed that any initiative should rely more heavily on tax cuts rather than spending.

The Obama tax-cut proposals, if enacted, could pack more punch in two years than either of President George W. Bush's tax cuts did in their first two years. Mr. Bush's 10-year, $1.35 trillion tax cut of 2001, considered the largest in history, contained $174 billion of cuts during its first two full years, according to Congress's Joint Committee on Taxation. The second-largest tax cut -- the 10-year, $350 billion package engineered by Mr. Bush in 2003 -- contained $231 billion in 2004 and 2005.

Read the whole Wall Street Journal piece, but the premise Obama is going with will garner Republican support should the proposal keep these tax cuts in.

It looks like Obama doesn't just want a few Republican votes but is going for a legitimate bi-partisan passing of the bill and looking to get lawmaker from both sides of the aisle behind it.

I have seen a few critical of this, mostly from the left, but overall, many bloggers and pundits are just surprised at this initiative.

Jules Crittenden (right):

Dawn over Obamalot. OK, he’s surrendering on foreign policy and economic policy. Health care is under advisement. It’s the kind of change you can hope for, but when he hasn’t even taken office yet and everything he believes in is just the latest thing to get thrown under the bus, it’s not exactly change you can hang your hat on.

Corrente (left) states "Obama's package is sucking up to insane people, since it's going to be 40% tax cuts, which provide less stimulus than spending."

Firedoglake (left):

I said the other day that predicting what would happen economically this year would be harder than predicting economic matters in the Bush era, because presumably the Obama administration wouldn't be so ideologically blind and stupid as the Bush administration.

I hope I wasn't wrong, but after reading this, I'm beginning to think I may have been. As I've said for a long time, personnel matters, and Summers and most of the key economic advisers simply are not liberals and do not understand liberalism any more than Obama does. Even when they try and do something liberal, like a large stimulus, they wind up acting like half-baked Chicago school acolytes.

Tennessee Guerilla Women points out some more "change" not making the left very happy at the moment:

President-elect Obama has chosen anti choice, pro abstinence education, anti embryonic stem cell research, anti labor, anti union, anti same-sex marriage and anti civil union Tim Kaine to chair the DNC.

Bottom line here is that despite rhetoric on the campaign trail, it seems Barack Obama is starting to see and deal with the realities of the situation that faces him over the next four years and is not willing to let the far left dictate his actions and take him over the edge of the cliff.

Like I said at the beginning, a pleasant surprise to wake up to even though the plan isn't without pitfalls, it shows a level of bi-partisanship offers from Obama to try to get as many behind his decisions as he can.