President Obama is taking credit for tax legislation that has yet to reach his desk, and that’s okay. He wants people to know he is interested in tax cuts, and it’s an election year ... well, you get the idea.
However, we need to remember a few things. First is that the bill contains nothing new. It’s merely an extension of payroll tax reductions which were pushed by none other than those old grouches, the Republicans. They are the same tax cuts that just a few months ago were the subject of great angst — the Republicans wanting to “pay” for the tax reductions with commensurate reductions in the federal budget.
The bill extends a two-percentage-point reduction in the tax that funds Social Security. It’s estimated the cut will cost the government $143 billion in uncollected funds.
Obama also wanted to celebrate the bill because the Republicans were essentially silent on it, not wanting to seem like the Nasties in an election year.
In other words, Obama is behind the bill because of Republican reticence, not because he has any real use for tax cuts.
That’s okay, too. The outcome is the same: You and I will have a little more money in our take-home pay, and will spend that money, presumably creating an economic pass-through that will have a positive effect.
While Obama is taking credit for this, however, he should thank the Republicans as well, for their cantankerous insistence in wanting tax cuts. The president is not by nature a tax cutter. He is a tax raiser.
But for the purposes of this legislation, he is behaving as a Republican, even if he isn’t paying for the cuts in taxes with cuts in spending.
An important question is, how would he behave if he didn’t have to worry about re-election? Obama often has spoken against tax cuts, and remains determined to push through tax increases on the successful and hard-working. Or, as Obama says, the rich.