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David Walker
Political/Philanthropic leader

David Walker

Former Comptroller General of the United States, David Walker is president and CEO of the Peter G. Peterson Foundation.

Not the right deal to cut

Question: In a high-stakes game of political chicken, President Obama appears to have bowed to Republican threats to block the extension of tax cuts to the middle class--and all other legislation--unless a similar tax cut for high-income households was also included. Is this realistic bipartisan compromise after a sobering election, or is it a sign of weak leadership?

The alleged "deal" involves extending all prior tax cuts and some new ones along with a one-year extension of unemployment benefits for the chronically unemployed. Shockingly, despite great public concern regarding federal spending, deficits and debt, evidently NONE of these proposed actions will be paid for with spending cuts in other areas. In addition, the federal government is still without a budget for fiscal 2011 even though the year started on October 1.

While some compromise is necessary and should be encouraged, this "deal" does not seem reasonable from a fiscal responsibility and social equity perspective. It seems that President Obama is operating from a position of weakness and the Republicans from a position of over confidence in the post midterm election environment. Both sides are likely to pay a political price over time if these are the type of deals they plan to cut and if progress is not made on addressing our structural deficits.

By David Walker

 |  December 7, 2010; 10:08 AM ET
Category:  Accomplishing Goals , Congressional leadership , Crisis leadership , Economic crisis , Government leadership , Managing Crises , Political leadership , Presidential leadership Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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Boy, the media blitz is ON.

All three news review shows were bringing the dem agenda with both barrels this morning with Axelrod on two of them at once and Austan Goolsbee on the third. All making sure everyone thinks this is an Obama idea and that Obama is "leading" the fight despite the hard core libs carping in their pants over tax extensions (not tax BREAKS) for the upper bracket taxPAYERS.

The dems don't know what a large gift they really have staring them in the face with Pelosi, Reid and Durbin all going on with the OLD and IGNORANT line of barf about tax breaks for the rich. They continue to whip up the class warfare between low income and other levels of taxpayers because they have NOTHING else to contribute to the success of this country except handouts.

If they don't want this deal, FINE. Let the tax breaks expire and let the UC benefits expire too. Re-election is no longer much of an option for BO anyway.

Merry Christmas.

Posted by: jimbob3 | December 12, 2010 4:54 PM
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Obama and the Dems pushed the health care reform bill through - why couldn't the president and Congress work on this 10, 8, 6 months ago when they were not dealing in a "dead duck" session?

Ridiculous to wait until the last weeks to tackle an important issue like this one.

Posted by: Utahreb | December 12, 2010 7:35 AM
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As he does so often with great effectiveness David Walker confronts us with the challenge to think about the deficit problem. He is correct when he associates this short term measure with increased debt. But is that really the issue? It seems to me that we need to find a way of separating temporary deficit issues from long term structural deficit issues in a way that allows us to begin to thing of the latter in less self-interested ways. We all know where we stand today in the economic sphere and in the context of taxes and spending. But we are less confident that we will know where will we stand in 10 years as individuals and where the nation as a whole will be. Is there any way that we can begin to shift our thinking toward that unknown so that we can begin to think properly about that time frame? It is very hard for "current peoples" in the "here and now" to imagine themselves as "future peoples" in the "not yet there". We need to develop a capacity for that type of visualizing the future. This has got to go beyond the ability to simply make projections about the future based on current trends. It must include the ability to think morally and ethically about possible conditions which we would find intolerable and perhaps avoidable.
That being said we all owe David Walker our gratitude for his passionate confrontation will issues that most of us seek to avoid.

Posted by: jweley | December 11, 2010 11:00 AM
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Former Comptroller General correctly focuses on the need to stem structural deficits, but he has avoided suggesting what kinds and amounts of stimulus are needed to shake the economy out of the Great Recession. He is an accountant and not an economist or a politician. While some type of grand deal might have been struck, it would have probably overloaded Congress in its lame duck session. Politically it would have been disaster for President Obama to allow all the middle class tax cuts to expire on December 31. And the dynamics of dealing with the 112th Congress will be entirely different. That's why this deal had to be made as it was and the issues about the structural deficit have to wait.

Posted by: Viewpoint2 | December 10, 2010 4:38 PM
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I'm honored to be able to respond to David Walker's wise comment: Why would it make sense to give millionaires money borrowed from China in order for them to invest in Asia? That is exactly what the effect of the Estate Tax Break plus Million a year plus tax breaks is and will be.

How could Obama think that is smart?

Posted by: bert8 | December 9, 2010 11:26 PM
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Where are all the tea partiers and fiscal conservatives that just rode into office. This is a bad deal in my opinion because it is detracting from our nations most pressing issue; our nations balance sheet. Where are the provisions to offset the costs that these tax breaks and unemployment benefits will yield. I like both of these policies but please stop mortgaging our nation's future. The fiscal responsability needs to start sometime.

Posted by: rizzo2am | December 9, 2010 10:18 AM
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Where are all of the tea partiers and fiscal conservatives that are supposed to be scaling back government spending. This deal is a bad choice if we cannot offset the costs associated with reducing taxes and increasing spending in other spheres. Short term gains are great but when will we ever have a serious discussion on getting our balance sheets in order.

Posted by: rizzo2am | December 9, 2010 10:15 AM
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I support President Obama's deal with Republicans now that I know more of the benefits for all Americans. At least with this plan, both the Unemployment rate and the Deficit as a percentage of GDP are projected to go down. At the end of the day, that is more important and beneficial to all Americans.

http://www.washingtonpost.com/wp-srv/special/business/tax-cut-compromise/index.html?hpid=topnews

I am/was angry too, but it’s at the GOP for holding nuclear proliferation hostage to tax cuts for Billionaires and their ability to buy more Mansions, Villas and Yachts. In the end, it's about getting things done and most certainly not about throwing another six million long term unemployed people under the GOP Billionaire bus.

Posted by: Airborne82 | December 8, 2010 1:27 PM
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It's too bad there aren't more leaders like David M. Walker in the nation's capital. The financial house of cards continues to grow more unstable...

Posted by: survivalandprosperitydotcom | December 7, 2010 9:19 PM
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David Walker for President.

Posted by: PostWebReader | December 7, 2010 11:26 AM
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