Obama Buckles On Bush Tax Cuts Right After His Deficit Commission Recommends Cutting Social Security (UPDATED)

Posted by | November 11, 2010 10:01 | Filed under: Top Stories

By Yashwanth Manjunath

We have reached a critical tipping point with the Obama administration following the disastrous midterm elections. The early reports from the two co-chairs of Obama’s deficit commission are in and they don’t look pretty. The plan released by Democrat Erskine Bowles and Republican Alan Simpson recommends limiting yearly cost-of-living increases to the rate of inflation, instead of wage growth. The cut in annual increases would affect current retirees.  Their benefits would go down by about 3 percent after they’ve been retired for 10 years, and about 6 percent after they’ve been retired for 20 years. Their plan would also raise the retirement age to 68 around 2050 and 69 around 2075. But the madness doesn’t end there.

The plan released by the deficit commission would also cut taxes for the rich by cutting the highest tax bracket from 35% to 23%, and the corporate tax rate from 35% to 26%. That’s not a typo; the plan to cut the deficit is to cut taxes further for the rich. But we are just getting warmed up…

In order to pay for cutting taxes for the rich even more, the plan eliminates the Earned Income Tax Credit (EITC). EITC creates an incentive for the poor to work, while offsetting the punitive effects of the regressive payroll tax. This is literally a reverse Robin Hood scenario. Unlike the government, Robin Hood would not go around “robbin’ the hood'” (bad joke…). The plan also hurts veterans by adding co-pays to the Veterans’ Administration and TRICARE, while freezing the pay of noncombat military for three years.

Let’s step back for a second and remember why the national debt has more than doubled in the past ten years. In a excellent statement responding to this detestable plan, Bernie Sanders points out the obvious: “…the huge increase in the national debt in recent years was caused by two unpaid wars, tax breaks for the wealthy, a Medicare prescription drug bill written by the pharmaceutical industry, and the Wall Street bailout.” But rather than focus on the defense contractors, the drug industry, the Wall Street bankers, and the tax cuts for the wealthy that got us into this mess in the first place; the two co-chairs of Obama’s deficit commission have decided to target the poor, the middle class, the elderly, and the veterans. All of this came before the wonderful breaking news that Obama has just buckled on the Bush tax cuts for the wealthy, which will blow another $700 billion hole in the budget.

Enough is enough. It is time to go to war, it is time to fight back. This is not about cutting the deficit, or fiscal responsibility, or what is best for the country anymore. This is no longer about Democrats and Republicans or liberals and conservatives. This is about power and who really has it in Washington. If Obama follows through on the recommendations made by Bowles and Simpson, if Obama sells out the poor, the middle class, the veterans, the elderly, all to protect corporate America and the wealthy people who run it, if he slashes benefits that average everyday Americans suffering through this recession rely on for their survival, while still cutting taxes for the wealthy in the name of “fiscal responsibility,” it is time to make a change.

It might be time to start thinking about a primary opponent for Barack Obama and I know an ex-governor from Vermont and an ex-senator from Wisconsin who would make great candidates.

UPDATE: The White House denies that they’ve changed their position on tax cuts, reports Greg Sargent:

[White House adviser David] Axelrod emails:

There is not one bit of news here. I simply re-stated what POTUS and Robert have been saying. Our two strong principles are that we need to extend the tax cuts for the middle class, but we can’t afford a permanent extension of the tax cuts for the wealthy.

And White House comm director Dan Pfeiffer adds:

The story is overwritten. Nothing has changed from what the President said last week. We believe we need to extend the middle class tax cuts, we cannot afford to borrow 700 billion to pay for extending the tax cuts for the wealthiest Americans, and we are open to compromise and are looking forward to talking to the Congressional leadership next week to discuss how to move forward. Full Stop, period, end of sentence.

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