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Posted at 9:40 AM ET, 12/14/2010

Senate tax deal vote wasn't even close

By Jennifer Rubin

Okay, this was sort of embarrassing for the tax agreement critics. The Senate's final vote was 83-15. That's the kind of margin you rack up for recognition of National Girl Scout Day. And it suggests that hardliners on both sides weren't able to convince their colleagues that a vote in favor of raising taxes (e.g. a no vote) was defensible. In the end, only a handful of Republicans -- Jim DeMint, Jeff Sessions, John Ensign, Tom Coburn and George Vionovich -- voted against the measure. Considering one of these is retiring and another may well need to retire, that's not much of a showing for the purist camp.

You want winners here? Senate Minority Leader Mitch McConnell, who brokered an excellent deal; Reaganomics; employers; unemployed Americans; and, yes, the president. He showed that when all other options are eliminated, he will chose the right course.

The loser: House Speaker Nancy Pelosi. Good luck to her trying to change a comma in this bill. Eighty-three senators, including such ultra-liberals as Sen. Barbara Boxer (D- Cal.) voted for it, and it's still not good enough for Pelosi? Hmm. Don't think so.

Not surprisingly, McConnell issued a statement praising the results:

Today a wide bipartisan majority in the Senate has shown their commitment to the economic security of millions of American families and hundreds of thousands of small businesses across the country by protecting them from a job-killing tax hike at the beginning of the year. We now urge the House leadership to bring this bipartisan agreement to a vote without political games or partisan changes designed only to block this bill's passage in the House. If the House Democratic Leadership decides to make partisan changes, they will ensure that every American taxpayer will see a job-killing tax hike on January 1st.

In other words, the House better not mess with the Senate's handiwork.

As for Pelosi, one Capitol Hill insider offered this take: "She is a pretty shrewd operator. She is showing liberals why they need her -- she is the only one who can and will stand up for the left, even at the expense of her own president." That, of course, is a recipe for Pelosi's survival, but not for the liberal agenda.

My own take matches that of Keith Hennessey, a conservative economist and former advisor to George W. Bush. Hennessey writes:

Given a Democratic President, this is the best possible deal that could be reasonably expected. For the next two years, through the remainder of President Obama's first/only term, tax rates won't go up on anyone except dead people. (OK, actually their heirs.) That is a total and complete policy win.

With almost no political effort and very little public discussion, capital tax rates aren't going up. I had expected Congressional Republicans to get two years on all the individual rates but was nervous about the capital tax rates. That is a slightly surprising and complete policy win.

The estate & gift tax deal ends up at the Kyl/Lincoln compromise levels, as most anyone could have guessed for a while. While this isn't a complete victory, it's darn good.

The stupid Making Work Pay credit, which the President mislabeled as a tax cut, is now a true payroll tax cut. That's a marginal improvement.

Unlike many Congressional Republicans, I support extending extended unemployment insurance benefits when the unemployment rate is this high. My back-of-the-envelope suggests that, at a 9.8% rate, between four and nine people who would like a job but cannot find one are getting more generous UI benefits for each person who is getting those same benefits and choosing not to take a job. I'm OK with that ratio.

Unlike sports, politics offer no complete victories. But this is as close to one as conservatives will get so long as Obama is president. They should savor it while it lasts.

By Jennifer Rubin  | December 14, 2010; 9:40 AM ET
Categories:  Senate GOP, Taxes  
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Comments

Unlike sports, politics offer no complete victories. But this is as close to one as conservatives will get so long as Obama is president.

$900 Billion in new debt,unfunded,what a victory,and what a weird Conservative you are. This is the kind of loss the Liberals will take to the bank,24/7.

Posted by: rcaruth | December 14, 2010 10:21 AM | Report abuse

Somebody ought to throw a bucket of water on Nancy Pelosi.

It may be the only way to get rid of her.

Maybe a wreath of garlic and wolfbane for good measure.

Posted by: battleground51 | December 14, 2010 10:32 AM | Report abuse

RCAR,

You make a good point about our host. Jennifer is too interested in calling winners and losers, and not interested enough in the content of the bill.

That this bill does not curtail even a relatively small boondoggle like ethanol, which even Al Gore admits is not good policy, shows that Republicans are not serious about reform.


Posted by: Inagua1 | December 14, 2010 10:37 AM | Report abuse

Good points, Inagua1 and rcaruth.

As for Pelosi changing a comma, I can envision the House throwing in a few more goodies. As long as the new pork is idealogically distributed and the House doesn't get too greedy, there may well be some changes.

The thing is smelling more like Capitol Hill bidness-as-usual all the time.

Posted by: MsJS | December 14, 2010 10:59 AM | Report abuse

rcaruth:

A question for you. What do you make of the Chinese decision not to raise interest rates in the face of 5.1 inflation for November?

It's very, very puzzling, so I exited the long dollar trade. I may be leavig money on the table, especially if there's any kind of international issue before Christmas, BUT I have a long standing rule that when something puzzles me, and I have a profit, I get out!

Still short Treasuries, pending the results at 2PM today.

Posted by: 54465446 | December 14, 2010 11:03 AM | Report abuse

rcaruth:

A question for you. What do you make of the Chinese decision not to raise interest rates in the face of 5.1 inflation for November?
Posted by: 54465446

I have no interest in/knowledge of the tactics/mechanations of the Floating Currency Universe. I'm a hard asset money guy,so my only interest in Floating currency is to replace it with hard currency,or to allow competition among currencies,which is a false argument,because everyone,if they had a choice,would prefer gold backed money over non-backed money.

Posted by: rcaruth | December 14, 2010 11:40 AM | Report abuse

that we are discussing this at all is a good sign. The deal isn't perfect and the conservatives I heed are divided on it but I'm still in favor of the bill.

fundamentally it is an admission by Obama that tax hikes on anybody is a political quagmire. He may be arrogant and narcissistic, but he don't seem to be completely stupid.

As for the ethanol and what have you, I remain hopeful that the new house and senate will begin the arduous task of cutting government spending. Goring these sacred cows is a great place to start.

Posted by: skipsailing28 | December 14, 2010 11:42 AM | Report abuse

RC:

I thought you followed these things in the same way that the Yankee haters always know the score of their last game. LOL

Actually I would NOT prefer gold backed currency, because I and millions of others would not have access to any credit if there was, and the economy would have completely collapsed three years ago. However if I was ALREADY wealthy, and not a homeless guy typing this in a public library, yes I'm with you!

As always, enjoying the chat with you.

Posted by: 54465446 | December 14, 2010 11:50 AM | Report abuse

if there was, and the economy would have completely collapsed three years ago.
Posted by: 54465446

This is correct,but,we needed the collapse three years ago to have a great economy TODAY. We are procrastinating the collapse,like a doctor using gallons of antibiotics to treat a leg with gangreene,the leg is going to come off,no matter what. Default or adding enough assets to balance our liabilities are the only options,every business man knows it's that simple.

Posted by: rcaruth | December 14, 2010 12:16 PM | Report abuse

Would it have killed you to mention the other big winner in that vote? You know. The guy who actually brokered the deal and got 4 for 1. I'll give you a hint. He wasn't born in Kenya.

BB

Posted by: FairlingtonBlade | December 14, 2010 12:30 PM | Report abuse

RC:

That's what I enjoy about our chats. You're an honest man. Now of course we differ on whether that would have been good or bad for the economy. You do have an argument on your side though. I just don't believe that the chaos would have been worth the catharsis, and you do.

Posted by: 54465446 | December 14, 2010 1:00 PM | Report abuse

54465446/ I just don't believe that the chaos would have been worth the catharsis, and you do.

Not my point,we can't escape the chaos unless we start adding assets to the balance sheet,remember Napoleon,he had to sell us a big hunk of land because he needed cash,his credit lines were maxed out. Check it out.
http://www.ritholtz.com/blog/2010/12/the-illustrated-history-of-the-u-s-credit-collapse/

Posted by: rcaruth | December 14, 2010 1:33 PM | Report abuse

54465446/
FOR YOUR ENTERTAINMENT:
Will the Fed be able to survive Ron Paul?
Posted by Nin-Hai Tseng, writer-reporter
December 14, 2010 11:48 am
"The erstwhile presidential candidate and soon to be head of Congressional oversight of the Federal Reserve talks gold, jobs and the presidency with Fortune.
If there's anything to be said about U.S. Congressman Ron Paul, he sure is persistent. And lately, that inner flame that's helped him gain the reputation for sometimes being the "G.O.P. loner" appears to be paying off.
The soft-spoken obstetrician has represented the 14th District of Texas on and off since 1977, spending much of his political career arguing that the Federal Reserve is evil for America and far too secretive. He doesn't see why there's so much faith in paper money, including the U.S. dollar. If Paul had it his way, there'd be a return to the gold standard. He even laid out his case in his book, End the Fed"
http://finance.fortune.cnn.com/2010/12/14/congressman-ron-paul-end-the-fed/

Posted by: rcaruth | December 14, 2010 5:24 PM | Report abuse

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