Senate Passes Tax Relief, Unemployment and Jobs Act

Senate Passes Tax Relief, Unemployment and Jobs Act

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The overwhelming 81-19 Senate passage of the tax cut deal today is an indication that, for the moment, the White House enjoys enough bargaining chip influence on the Hill to pull off difficult legislative feats.  And, the last minute support of Sen. Sherrod Brown (D-OH) offered hope to Administration officials that their progressive base wasn’t all lost.

On a number of levels, the White House probably found some comfort in the devil of the deal’s details.  Technically, there was some give and take, with the president indicating a potential coming-to-Jesus-moment, so to speak, in 2012 when there is a realization that permanent tax cuts for the upper-middle class to upper class could not be justified with deficits ballooning.  Much focus is already on the added $800 billion in red after this deal is set.  Yet, comparing the scoreboard, Democrats appeared to get more out of it than Republicans: avoiding a virtual social meltdown, the White House managed to snag $56 billion in a 13-month extension of unemployment insurance, something Republicans and their base is stubbornly opposed to.  That was the big ticket save of the week for 2 million jobless Americans this holiday season.  Beyond that, Democrats also get:

  • Another $40 billion in combined Earned Income, Child and Education tax credits;
  • An additional $120 billion of cuts in the payroll tax, with many Americans seeing an additional $1,400 in their paychecks this year;
  • From $30 billion (over 10 years) to $200 billion (over 2 years) of investment incentives for businesses, with a focus on small operations in an effort to encourage hiring.

“If you look at the numbers alone, the tax cut deal looks to have robbed Republicans blind,” Ezra Klein writes in his Washington Post blog.  In comparison, Klein notes that “[t]he GOP [only] got around $95 billion in tax cuts for wealthy Americans and $30 billion in estate tax cuts.

Some Republican lawmakers, along with a band of prominent conservative pundits and thinkers, are beginning to think that.  As the realities of the deal settle in, the chorus of conservative advocates and GOP fiscal hawks could grow louder.  And although most observers say that the GOP can’t muster enough votes to successfully oppose the legislation in the House during this lame duck session, the numbers of opponents could grow with each passing day.

Ultimately, the president’s top priority in making the deal was avoiding what some in the White House could see as imminent social meltdown had unemployment benefits lapsed or families experienced significantly reduced disposable income in the winter.  Some observers began talk of doomsday-like scenarios in which unemployed families without heat and food would either starve and die from hypothermia – or resort to open civil disobedience that would turn violent.  Insiders familiar with the deal say the president, simply put, “didn’t want that blood on his hands.”

Rep. Chaka Fattah (D-PA), in a clear break with his Congressional Black Caucus colleagues, said as such when he issued a statement supporting the President’s plan.  Citing the nearly 80,000 Philadelphians, many in his district, who are on unemployment insurance, Fattah urged speedy House passage as there were too many Americans who had no time for Congress to sort out the “perfect solution.”

With the Senate having delivered the bill to passage, President Obama acknowledged that the ball is now in the House’s court:

Today, the Senate passed with strong bipartisan support a bill that’s a win for American families, American businesses, and our economic recovery.  This vote brings us one step closer to ensuring that middle class families across the country won’t have to worry about a massive tax hike at the end of the year.  It would offer hope to millions of Americans who are out of work that they won’t suddenly find themselves without the unemployment insurance they need to make ends meet as they fight to find a job.  And it would offer additional tax relief to families across the country and encourage businesses to grow and hire.

I know that not every Member of Congress likes every piece of this bill, and it includes some provisions that I oppose. But as a whole, this package will grow our economy, create jobs, and help middle class families across the country.  As this bill moves to the House of Representatives, I hope that members from both parties can come together in a spirit of common purpose to protect American families and our economy as a whole by passing this essential economic package.

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