Pushing recovery

Thursday, Dec. 9, 2010 | 2:06 a.m.

President Barack Obama this week unveiled a tentative deal with Republicans in Congress on tax breaks, and he has been defending the proposal since.

The agreement would extend for two years the Bush-era tax cuts for all Americans, and it would reduce the federal payroll tax, which will put more money into people’s pockets. It would also extend unemployment insurance for 13 months, giving needed aid to people who are out of work.

But the initial reaction from Democrats in Congress was particularly harsh because the proposal extends lucrative tax breaks to the rich without offsetting budget cuts. It is expected to add up to $900 billion to the federal deficit, and some Democrats have said the president should have pressed harder for a better deal, claiming that he capitulated to the Republicans.

In a telephone interview Wednesday with the Las Vegas Sun’s editorial board, White House press secretary Robert Gibbs said the plan was much better than perceived. “Virtually every family is going to see a greater tax cut in their pocket,” he said.

Gibbs says this deal “demonstrates the best sort of compromise,” adding that it shows the “two parties can sit down and get something that makes sense for the American people and the economy, even if it’s not a perfect solution for either.”

Democrats and Republicans did give ground in the negotiations, which is impressive in and of itself after a fractious campaign. Many economists say the plan will spur job creation and put money back into the economy. However, the plan could be in for a rough road in Congress.

There are Republicans grousing about the lack of offsetting budget cuts to pay for it, singling out unemployment benefits, but most of the public opposition so far is coming from Democrats. And some Democrats have pledged not to vote for it.

It’s not hard to find something not to like about the plan, particularly the way the Republicans have handled things. The Republicans, who take control of the House next year, have flexed their muscles. They held the middle class tax cuts and the extension of the unemployment benefits hostage just so they could secure benefits for the rich. If the plan fails, 2 million Americans will lose their unemployment benefits and the average family’s tax bill will go up $3,000.

This compromise may not be palatable to some members of Congress, but it’s probably the best possible in this political environment. With high unemployment, a sluggish economy and people hurting, Congress should work quickly to approve this compromise. That would help stabilize the economy and give families a needed boost.

But there is still more work to be done. The deficit, which spiraled out of control under former President George W. Bush and a Republican Congress, must be addressed. As the nation saw with the deficit-reduction commission, it is difficult to get consensus on how to move forward.

It’s going to take a new level of bipartisanship to get things done in Washington next year — it can’t end with tax cuts.