Compromise fails to cut spending

Wednesday, December 8, 2010

When no one gets their way, does anyone win? That's the position Congress finds itself in this week as a compromise is announced that will extend the current tax rate while also extending unemployment benefits.

The GOP does not get the unemployment benefits paid for with previously-approved stimulus funds while the Dems don't get their way on the tax rate extensions to every working American.

If you're keeping score, I'm not sure what you would post.

But don't fret because the spin machines will be in full gear trying to convince you that one side won and one side lost. Don't buy it. The Obama administration just learned that there are indeed consequences to elections. But isn't that what the President said not too long ago?

Conveniently hidden deep within the Obama agenda was one other small provision during the recent discussions. The Democrats are insisting on yet another tax provision that would include a tax credit for lower wage earners, even if they don't make enough to pay federal income taxes.

Yes, you read that right. A tax credit for low wage earners who already pay no federal income tax.

The sole fault I have heard in this entire tax rate/unemployment debate is the manner in which the discussions were framed by the GOP.

The Republicans should have been more forceful in stating their position on the unemployment benefit extension. Even though unemployment benefits were originally designed for a 26 week period, they now stand at 99 weeks of benefits and will this week be extended again.

The GOP has not opposed the extension but rather the cost of that extension, yet they have not made that case as forcefully as they should.

The Republicans should have insisted that the extensions be paid for with reduced spending elsewhere. And they should have stuck to their guns.

But instead, the GOP allowed the Dems to portray them as opposed to the extension and insufficient voices were raised to address that all-important point.

It's all a somewhat moot point however because the decisions have been made - the tax rate will remain unchanged and the unemployed will receive additional benefits.

We'll wait until the new Congress is seated before we see progress on spending cuts.

The sooner the better.

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