President Obama might be afflicted with the "Premature Capitulation" disorder.

[Better Believe It]

Weekend Edition
December 10 - 12, 2010

Yet Another Pyrrhic Victory for Obama
Premature Capitulation
By MICHAEL WINSHIP
Michael Winship is senior writer at Public Affairs Television in New York City


Ladies and gentlemen, I give you President Barack Obama, providing needless aid and comfort to those who would do him wrong, handing over his own head without a fight, afflicted with a curious syndrome we men of science have decided to call Premature Capitulation.

Backing away from myriad campaign promises, giving in to health care, economic stimulus and financial reform compromises -- in some ways these were par for the course, the unfortunate price of governing and politics in a polarized America. But in the few weeks since the midterm elections, the affliction of Premature Capitulation has become more and more endemic, whether it's dissembling on our policy in Afghanistan or backing away from a moratorium on settlement building in the West Bank, announcing a Federal workers' wage freeze or the continued kowtow to the moneyed interests who, if they pat him on the back, do so only to find the place to insert their knives.

And now this deal to extend the Bush tax cuts for two years, continuing breaks for the wealthiest Americans, as well as a similar extension of the capital gains top rate – 15% -- and a raise of the estate tax exemption to $5 million per person, with a maximum rate of 35%. In exchange, Obama is supposed to get a 13-month extension of unemployment benefits for the long term jobless, an expanded earned-income tax credit, equipment purchase write-offs for businesses, a reduction in the Social Security payroll tax and continuation of the college tuition tax credit.

Not so bad, you may think; in fact, many are viewing what Obama has gotten as a de facto second stimulus, but chances are Republicans would have yielded to public pressure on unemployment, especially during the holiday season, and as James Kwak points out on The Baseline Scenario website (which he founded with economist Simon Johnson).

Read the full article at:

http://www.counterpunch.org/winship12102010.html

The Baseline Scenario
Tax Cut Ironies
By James Kwak
December 6, 2010

"The Bush tax cuts were always bad policy. After the last election, President Obama will be able to accomplish precious little. But he could easily have killed the Bush tax cuts and thereby done more good for our nation's fiscal situation than anyone will be in a position to do for many years to come. Killing the tax cuts would alone reduce the national debt by roughly as much as the deficit commission's entire proposal. And killing the tax cuts was the path of least resistance. Obama could have done it by doing nothing. Or he could have done it by taking a strong negotiating position and being willing to walk away from the table…

"Instead we got a two-year extension as part of an overall package that adds $900 billion to the debt… And Obama will no longer be able to say the tax cuts were a mistake made by President Bush that he was letting expire. Now he owns the mistake."

http://baselinescenario.com/2010/12/06/tax-cut-ironies/