Dance Completed

Looks like the Obama team either acquiesced to Democratic lawmakers or allowed themselves to look like the serious bipartisan centrists while orchestrating the whole thing:

Bowing to widespread Democratic skepticism, President-elect Barack Obama will drop his bid to include a business tax break he once touted in the economic stimulus bill now taking shape on Capitol Hill, aides said last night.

Obama suggested the $3,000-per-job credit last week as one of five individual and business tax incentives aimed at winning Republican support. He proposed $300 billion in tax relief in a bill that could reach $775 billion, and he resurrected the jobs-credit proposal from the campaign trail as one of his main provisions [...]

"We've always said we're open to other ideas. This was never set in stone," said a senior Obama adviser of the decision.

Whether it was all kabuki or not, the perception that this President listens to the other major actors and arrives at a compromise without anger or territorial concerns is probably the kind of tone they wanted to strike. In addition, they are signaling a responsiveness to pressure from within the Democratic caucus that is a good portent for progressives, who must keep pushing. Sirota has a good post on the best strategies moving forward.

While I totally agree that now is simply not the time to seriously discuss deficits or entitlement "reform" when a crisis is afoot, it's important to recognize that there are progressive solutions to that hurdle, when we get to it. Bob Herbert discusses this today.

Well, there’s a good idea floating around that takes its cue from the legendary Willie Sutton. Why not go where the money is?

The economist Dean Baker is a strong advocate of a financial transactions tax. This would impose a small fee — ranging up to, say, 0.25 percent — on the sale or transfer of stocks, bonds and other financial assets, including the seemingly endless variety of exotic financial instruments that have been in the news so much lately.

According to Mr. Baker, the co-director of the Center for Economic and Policy Research in Washington, the fees would raise a ton of money, perhaps $100 billion or more annually — money that the government sorely needs.

But there’s another intriguing element to the proposal. While the fees would be a trivial expense for what the general public tends to think of as ordinary traders — people investing in stocks, bonds or other assets for some reasonable period of time — they would amount to a much heavier lift for speculators, the folks who bring a manic quality to the markets, who treat it like a casino.

“It raises money in a way that comes primarily at the expense of speculation,” said Mr. Baker. “The fees would be a considerable expense for someone who is buying futures, or a stock, or any asset at 2 o’clock and then selling it at 3. The more you trade, the more you pay.

“For the typical person holding stock, who is planning to hold it for a long period of time, paying the quarter of one percent on a trade is just not that big a deal.”

Making the people most responsible for this mess pay for it? The devil you say!

Rather than cede the argument, progressives must engage at all levels. You want to talk about the deficit? Here's a remedy. You want to talk about entitlements? Cost controls through universal health care. Obviously, there's a balance to this, and prioritizing the problem is important. But let's not forget that there are plenty of ways to deal with these challenges beyond the usual right-wing off-the-shelf solutions.