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Posted at 2:26 PM ET, 12/ 8/2010

Rep. Peter Welch: 'We don’t know whether we could’ve gotten a better outcome'

By Ezra Klein

peterwelch.jpg

Rep. Peter Welch (D-Vt.) is leading the charge in the House against President Obama's tax-cut deal. The problem, he says, isn't just the deal itself, but the process that led to it. We spoke this afternoon, and a lightly edited transcript of our conversation follows.

Ezra Klein: Tell me your concerns with the deal.

Peter Welch: The context for the House Democrats is that this was presented after the president made his deal with the Republican leadership. But in terms of policy, the central issue we should be focusing on is the economy. Ideally, our decisions, whether to borrow money or adjust taxes, should be based on where we get the most bang for the buck. If this is a stimulus bill, we have to ask whether we should have a stimulus where we’re borrowing money and using tax policy or where we’re building things. After this money is borrowed, we won’t have more broadband or bridges or roads.

And many Americans are skeptical about debt and borrowing. Even if economists can argue that the payroll cut, for instance, is a good thing, Americans are skeptical. Last night, I had a telephone townhall for my constituents back in Vermont, and we had 11,500 people on it. And I had people on Social Security saying if getting fewer benefits will help us on the debt, they’re for it. And I had a farmer saying that he’s had subsidies for 35 years but we can’t afford them anymore. And if you look at the bond market, it’s skeptical of this deal, too.

But isn’t there a tension between saying that jobs and the economy should be our top concern and saying that we need to worry about deficits? If the economists are right that recovery could be aided by more short-term deficits, wouldn’t making the economy our top priority suggest we should borrow more?

You are correct, there’s a tension there. I favor the extension of the middle-class tax cuts because in a recession they’re stimulative and they help with demand. And what the president is doing here is using tax policy to get more stimulus, to increase aggregate demand. And if you add up how much he gave and how much he got, he probably got a pretty good deal. But what the Democrats are saying is that to have reached this agreement without a fight, we don’t know whether we could’ve gotten a better outcome.

If the president had really fought for the Democratic position on this, if he’d given speeches around the country and gone on a whistlestop tour and hammered the Republicans and they just proved implacable on this, would the Democratic reaction be different if he made this same bill when the clock struck midnight on December, 31st?

I think a lot different. One of the things I give Nancy Pelosi a lot of credit for is that she’s able to get things passed and hold her members together because she shows us that she’s doing everything possible to get our views into these bills. I was a single-payer person, and I was disappointed in the health-care bill. But I supported the public option, and I watched as Nancy Pelosi fought and fought and fought to get the public option into the bill. But then it came back from the Senate without it. And I knew Pelosi had done every single thing she could possible do to get it in there. So I knew it was really the best we could get, and I had to decide whether to vote for it or not. And I think the president had the opportunity to do something similar here. This policy gets to a central question in economic policymaking, which is whether we’ll let the wealth transfer to the rich continue. And we should’ve engaged on it.

So your view is that the policy isn’t the only deliverable here, that moving the ball forward on the economic philosophy shared by most Democrats should’ve been part of the deal, and the president didn’t do that.

Yes. The president had a chance to engage America. He had the bully pulpit. And in politics, it’s important to engage in fights where you really show the American people the differences. What could’ve been a better opportunity than this? The polls back him up, the House votes for his bill, the Senate votes for this bill and gets stopped by the filibuster, and the president could’ve pushed the Republicans into the glare of the light to defend their position by taking vote after vote after vote. But we didn’t do it.

One thing you hear some in the Senate argue is that if they just let the Republicans filibuster till December, 31st, there’d be no time to try and pass the START treaty or DADT repeal or the DREAM Act. What do you think of that argument?

I don’t think much of it. The central issue for this country and this party is jobs and the economy. That’s more important than anything else. To the extent we let anything get in our way on that, we undo our ability to succeed on all issues.

Photo credit: By Alex Wong/Getty Images

By Ezra Klein  | December 8, 2010; 2:26 PM ET
Categories:  Interviews, Taxes  
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Comments

Two points:

1. If House Democrats were interested in a fight, they should have passed their version of the tax cuts prior to the election and made an issue for the voters. Was Rep. Welch in favor of this?

2. Does Rep. Welch think they will get a better compromise in 30 days with the new Congress?

Posted by: jnc4p | December 8, 2010 2:58 PM | Report abuse

Excellent. It is just amazing how flat-footed Obama has been on the economy. Krugman reminds us today that he was saying that before the nomination. And it never got better. It's the one thing that really matters, and the thing that lost them the mid-terms. But reports say that the White House thinks what they really need to do is appeal to "independents". That's a crock.

Posted by: jtmiller42 | December 8, 2010 3:00 PM | Report abuse

I'm extremely disappointed to read Congressman Welch say that he's willing to let ratification of START, ending DADT, the DREAM Act, and other important votes die if it means denying Republicans a win with regard to extensions of the top two rates.

That said, given that Republicans promised to block everything until a budget agreement in passed, the implication was that up-or-down votes on legislation will not be blocked once an agreement goes through. So how about it? I haven't read any reporting on this (forgive me if I missed it).

Posted by: cjo30080 | December 8, 2010 3:05 PM | Report abuse

Do we really trust the Republicans to allow up or down votes to go through AFTER we let them have everything they wanted on the tax bill?

That would look like just another Lucy-pulling-the-football-away moment to me.

Posted by: SBGYPSY | December 8, 2010 3:32 PM | Report abuse

The default is a better deal. If Obama just vetoed any related bill that came across his desk, that would be a better deal.

Posted by: bcbulger | December 8, 2010 3:35 PM | Report abuse

Easy to say for a Congressman who represents a state with approximately 5 immigrants and no nuclear weapons pointed at them.

Seriously, the only time the country as a whole is riveted by political debate is during a presidential election. Pushing this fight off to 2012, independent of the obvious economic logic of doing so (which I'll note Rep. Welch didn't even address in the slightest), will give us a huge opportunity to highlight our side's economic philosophy. For now, the President comes off as Washington's chief defender of the middle and lower class, willing even to risk the ire of the left to ensure that no harm comes to them. For a dyed in the wool liberal such as myself, consider me impressed.

Posted by: reader44 | December 8, 2010 3:35 PM | Report abuse

The president had already engaged America on this one: the vast majority of Americans (and that includes Republicans) did not want the tax cuts on wealthiest Americans extended. There were only two people who needed "engaging" -- Mitch McConnell and John Boehner -- and you could beat your head against the wall all day and not succeed in moving them.

I'm getting a little tired of these Congress people who failed to "engage" with the people on this issue before the elections and bring it to a vote before November suddenly placing all the blame on "daddy." They're simply protecting their own failure to engage.

Posted by: JJenkins2 | December 8, 2010 3:38 PM | Report abuse

This is a perfect illustration of white liberal hubris. He represents a small state with 2 African Americans (correction: one is racially ambiguous), so of course the interests of Latinos and the rest of the nation be damned.

Posted by: NMP1 | December 8, 2010 4:06 PM | Report abuse

While I can at least understand the left's complaints ideologically, even if I dont agree with them, for CongDems to complain after their own failure to get their act together is laughable. It appears that Obama decided to negotiate with the GOP directly after finding that CongDems couldnt come up with a unified position that he could rely on(See today's article in the NYTimes)and that he got what he wanted from the GOP. This liberal is just as impressed as reader44.

Posted by: gregspolitics | December 8, 2010 4:13 PM | Report abuse

"Rep. Peter Welch: 'We don’t know whether we could’ve gotten a better outcome'"

Except nothing and the tax cuts expire, cutting $4 trillion from the debt over the next decade, and tens of trillions after that.

And then the Fed is more inclined towards adding stimulus.

That might have been better.

Again, the crucial thing is does this increase or decrease the odds of a President Palin in 2012. Willing to do an analysis and venture an opinion Ezra?

Posted by: RichardHSerlin | December 8, 2010 4:46 PM | Report abuse

I think if you heard from existing Social Security recipients that they're willing to tolerate a drop in their payments, that's honorable. But, the tax holiday threatens to restructure the Social Security revenue stream well into the future, potentially destroying the program entirely. Speaking as a future recipient, I'm not willing to risk that. I'd prefer paying more now.

Posted by: pacificmary | December 9, 2010 1:47 AM | Report abuse

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