The Making of a President

By Patrick J. Buchanan

If the Pelosi-Reid liberals are in a hissy fit over the tax-cut deal negotiated by Barack Obama, they have only themselves to blame.

With their three-to-two majorities, Nancy Pelosi and Harry Reid could have forced the Republicans to vote again and again during the election for “tax cuts for the rich.”

They never did. Now, what else could Obama do after his own party left him with lousy field position and the clock running out?

“He could have fought!” the left howls. “He could have told the Republicans, ‘No way do I sign a bill that gives tax cuts to the rich.’”

Had Obama thrown down that gauntlet, Republicans would have blocked all action in the Senate until Dec. 31. The lame-duck session would have ended in deadlock. There would have been no extension of tax cuts for the middle class, no START treaty on nuclear weapons, no extension of unemployment benefits, no vote on the DREAM Act for amnesty for illegal aliens, no vote on “don’t ask, don’t tell.”

Obama’s defiance would have accomplished — exactly nothing.

In January, a Republican House and more conservative Senate would have passed an extension of all the Bush tax cuts, and Obama would have had to veto the bill and let them all expire. The resulting tax surge would have caused chaos in the economy and been a disaster for the president who is supposed to be running the country.

But the Republicans would have caved, claims the left.

Don’t bet on it. Mitch McConnell and the GOP senators know — after what happened to Charlie Crist, Arlen Specter, Michael Bennett and Mike Castle — that the retribution of the tea party movement is the threat they face, not the anger of Barack Obama.

Republicans won the battle because they were united. All 42 senators agreed nothing moves in Harry’s house until the tax cuts are voted on. And they took that stand because they truly believe you do not raise taxes in a recession and because they were willing to let all the tax cuts expire on Jan. 1 rather than abandon a principled position.

If liberals thought the GOP would crack, Obama knew better.

And considering the deal he came out with, when he walked in with not even a small pair, his party should be congratulating him, not cussing him out.

True, the tax cuts are extended for all, even those earning more than $250,000. But only for two years. If liberals believe ending tax cuts for the rich is a winning issue, why are they screaming? They will have a chance to make that case in the middle of the 2012 election, when all the tax cuts will be up for renewal again.

On the estate taxes, Obama agreed to exempt the first $5 million for an individual and $10 million for a couple, and impose a 35 percent top tax rate.

This is a relief for small businessmen and farmers who want to deed all they have built up to their kids. This is a compromise between what the left wants and what some of us believe should happen: elimination of the estate tax.

Death taxes do not raise enough to justify the IRS agents working on them and the accountants and lawyers who spend careers helping seniors put together wills and trusts to protect wealth on which they have been paying taxes all their lives.

Obama also won a 13-month extension of unemployment benefits, twice what Democrats had pushed for.

Obama won a 30 percent cut in payroll taxes for workers in 2011. The Social Security tax falls from 6.2 percent of wages to 4.2 percent. This will put tens of billions in the pockets of consumers.

Businesses will be allowed to “expense” investments in equipment such as computers. This means they can write off the entire cost on their corporate income tax in the first year. This will spur job-creating new investment.

With this deal, Obama is conceding that the Pelosi-Reid stimulus approach did not work, that tax cuts must be tried to get the economy moving, that, for the next two years, he must make his deals with Republicans.

The Obama-McConnell pact is a recognition of reality and a sign of maturity.

In these negotiations, Obama acted like a president. He went in with a weak hand and came out with half the pot. He got something, where the Democrats now berating him got nothing.

If the left hasn’t realized it yet, Obama has: Liberals have lost the country. The liberal hour is over in America and the West.

With these deals, however, comes one big problem. None of these tax cuts or spending hikes is paid for. A trillion dollars is being added to the long-term deficit and debt. And the plunge in the bond market is signaling that the money power thinks that the United States’ credit rating is heading south.

The clock on the debt bomb has just been moved a few minutes closer to midnight.