Democrats ‘got a better deal’ than Republicans on tax agreement, Gibbs says

Jon Ward Contributor
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White House press secretary Robert Gibbs said Friday that the tax deal passed through the House early Friday morning was not a bitter pill to swallow because it had more in it that President Obama wanted than stuff Republicans did.

“We got a better deal on this than the other side did,” Gibbs said.

Such pronouncements will balance the broader message sent later Friday when Obama holds a public ceremony to sign the tax deal into law.

The deal is regularly referred to as a tax cut deal even though its main component is an extension of the current tax rates, which went down in 2001 and 2003 by virtue of a series of tax cuts passed by Congress in conjunction with former President George W. Bush.

So while the image of Obama signing “tax cuts” into law will dominate the TV airwaves, Gibbs’ comments — made at an off-camera briefing at the White House — are aimed at mitigating the anger of the president’s liberal base, which does not like the extension of tax rates for the highest earners.

Republicans weren’t letting Obama have the image all to himself. Senate Minority Leader Mitch McConnell, Kentucky Republican, is attending the ceremony as well, a spokesman said.

“As you may know, he’s a big fan of preventing tax hikes,” said McConnell spokesman Don Stewart.

Obama is also meeting with organized labor leaders at the White House Friday. Labor has been among the most vocal opponents of the tax deal.

There are also some grounds for Gibbs’ comments, as evidenced by the mixed reaction to the deal on the right. Former Alaska Gov. Sarah Palin was the latest high-profile conservative to criticize the agreement on Friday, calling it “a lousy deal” in an interview with ABC’s “Good Morning America.”

Former Massachusetts Gov. Mitt Romney, who like Palin is expected to run for the Republican presidential nomination in 2012, came out against the tax deal several days ago, before the Senate or House had voted.

Romney argued that a two-year extension of current tax rates did not provide enough certainty for businesses to expand at a rate that would negate the deficit impact of a series of other measures in the package.

The price tag for the package, according to the Congressional Budget Office, is $858 billion. And though some conservatives say that the stimulative impact of extending tax rates, lowering the amount of the estate tax increase from its scheduled 55 percent to 35 percent, and extending tax deductions will mean increased growth and higher revenues, Romney and Palin’s argument is that a two-year extension rather than a full one limits that stimulative impact.

Conservative columnist Charles Krauthammer has been vocal in expressing his opinion that the deal was bad for the GOP for both policy reasons and political ones.

Conservatives are also unhappy with $60 billion in pure spending on a 13-month extension of unemployment benefits, which is not paid for and is being added to the debt.

And a two percent reduction in the payroll tax is being taken out of the 6.2 percent paid toward Social Security, lowering that rate to 4.2 percent for two years, while employers will continue to pay the full rate. That, too, Democrats claim as a win, even though it was put in the deal to replace a pure tax refund — or cash payment — to Americans below a certain income level that was part of Obama’s massive stimulus in 2009.

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