Ryan’s proposal seeks to extend Bush tax cuts indefinitely and lower the highest individual and corporate tax rates from 35% to 25%, making up revenue by closing tax loopholes, eliminating special tax credits. The GOP maintains allowing individuals and businesses to keep more money will help grow the economy at a faster rate.
The tax proposal inspired a read-my-lips moment for Obama: “In the last decade, the average income of the bottom 90% of all working Americans actually declined. Meanwhile, the top 1% saw their income rise by an average of more than a quarter of a million dollars each. That’s who needs to pay less taxes? They want to give people like me a $200,000 tax cut that’s paid for by asking 33 seniors each to pay $6,000 more in health costs. That’s not right. And it’s not going to happen as long as I’m President.”
A number of Democrats and liberals cheered Obama’s performance as the president sought to gain ground with the independent voter bloc that embraces long-term deficit reduction. As expected, Republicans couldn’t wait to engage in some trash talking of its own. Ryan, who sat in the front row as his plan was being picked apart, said after the speech: “What we heard today was not fiscal leadership from our commander-in-chief. What we heard today is a political broadside from our campaigner-in-chief.”
So expect fighting across the aisle as well as intra-party clashes on spending bills. In a vote of 260-167 — 179 Republicans and 81 Democrats voted in favor; 59 Republicans and 108 Democrats opposed the measure — the House passed the six-month spending bill for fiscal 2011, which started on Oct. 1, 2010. Among those items that were eliminated or had dramatic funding reductions were areas championed by the White House like high speed rail development and energy efficiency programs. And House Minority Leader Nancy Pelosi complained Thursday her caucus was shut out of the negotiating process last week when congressional leaders and the White House cut the deal that avoided a government shutdown. The deal now goes to the Senate, which is expected to approval.
The House still must vote on two measures, one related to the possible defunding of Planned Parenthood and the other targeting health care provisions, before being sent to the Senate. Another vote has been scheduled on Friday for the Ryan plan but anticipate more fiery, partisan deliberations.
As Obama laces up his gloves, the question remains whether he will continue to go toe-to-toe with Republicans. In his dealings with Congress, he tends to be a pragmatic dealmaker instead of a all-or-nothing political brawler. Evidenced during the fight over health care and financial reform, his m.o. is creating policy guidelines and then allowing Congress to hammer out details. When inertia stymies the legislative process, he tries to serve as a bridge to compromise.
Although Obama was adamant he would not support extension of Bush tax cuts last year, he made a deal with Republicans in December to not let them expire until 2012. The president capitulated because he “felt that the middle-class tax cuts were being held hostage to the high-end tax cuts. I think it’s tempting not to negotiate with hostage takers, unless the hostage gets harmed.” And last week he agreed to a long-term spending bill that eviscerates $38.5 billion from current spending levels — once considered to be “draconian” by the Democratic leadership in the Senate — to avert a government shutdown. Liberals, however, were upset by his positive spin in which Obama cited the compromise as one that “invests in our future while making the largest annual spending cut in our history.”
During yesterday’s speech he left the door open to bipartisanship, encouraging Democratic and Republican leaders in both chambers to designate four members each to participate in negotiations led by Vice President Joe Biden, beginning in early May, to produce a legislative framework by the end of June as well as find “common ground.”
But many were still impressed with the collected but scrappy Obama they saw at the podium. He firmly communicated his values and made his case with energy and urgency. He appeared to display the resolve to fight for his progressive vision to transform a nation.
“To meet our fiscal challenge, we will need to make reforms. We will all need to make sacrifices. But we do not have to sacrifice the America we believe in. And as long as I’m President, we won’t.”
We all eagerly await round two.