Wednesday, October 12, 2011

Inane Politics of Democrats in Senate

"Nothing quite illustrates the depth of Barack Obama's weakness in Washington better than the painfully public defeat the Senate handed him Tuesday by blocking his signature American Jobs Act.

The defeat was a sharp rebuke for Obama that amounted to a vote of no confidence on the economic policies of recovery spending that he’s championed for years,..."

"...since the Senate Democrats’ proposed surtax would apply to capital gains as well as ordinary income, it would mute the “carried interest” break and others like it. But it would do nothing to correct the fundamental flaw — which is the 20-percentage-point differential between the maximum marginal tax rates on capital gains and ordinary income. That differential should be eliminated for everyone, not just for hedge fund managers."

"The president’s jobs initiative is at the end of its legislative life -- not that it really had one."

Sen. Jim Webb (D VA), who voted for the bill, explained that in the end he opposed the bill because it would not address the fundamental issue of reduced capital gain tax to ordinary income.

In a sense that is the whole fuss about Occupy Wall Street.

So in the end Barack Obama got this thumping defeat on his hand because Democratic Senators could not agree for how to pay for the price tag. The tax debate is too complex and politically fraught and unlikely to be solved without an electoral mandate (well, things can be nasty there too).

All this jumping around -  pass this jobs bill now - has been simply 'waste' for Obama in terms of concrete results. Politically it might not be all wash as he would start to make the case that it is GOP obstruction which is responsible for the possibly impeding economic hardship.

What all this tells us is that not only Europe is helpless in solving its own problem, Washington is no different. Tactically it seems Obama jumped the gun without getting Senate Democrats coalesced around a single funding source. If you cannot get 53 Senators on board, how are you going to lead this divided nation to agree to fund your program? May be White House thought not worth to spend any political capital on Senate Democrats as GOP House is unlikely to take anything on this. May be this is just an opening bid so as individual items can get realistic shots. But that seems doubtful. The only choice left for President Obama is to keep going to American People telling how 'Congress' is against doing something meaningful to solve problems of Americans and hence he would need a full mandate with majorities in both chambers of Congress. Ya right, we all know how well that is going!

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