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Yves Smith’s suggestion in an FDL post today that the Center on Budget and Policy Priorities was in some way “bribed” to support the tax-cut-UI compromise that Congress struck in December is outrageous and completely false. The Center on Budget and Policy Priorities has not taken a penny from the Peterson Foundation or anyone else with an interest in extending high-income tax cuts.
Had Smith bothered to check the record, she would have found that few policy organizations in DC have issued as many reports and analyses assailing the high-income tax cuts, from 2001 — when they were first considered — through the present day, as has the Center.
We consistently called for the expiration of the upper-income tax cuts at the end of 2010, and supported the December compromise because we were convinced its defeat by the last Congress in December would lead to a more unfavorable deal under the new Congress that took office in January. We think the track record of the new Congress to date bears out that judgment.
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Thanks for this response.
Vigorous debate yields informed readers. Thanks.
So, to clarify, you strenuously opposed extending the Bush tax cuts until extending them was actually proposed? Then you backed the bill, right?
What would constitute a more unfavorable deal and would pass in the Senate and over the veto of the president?
“Totally Baseless?” Riiiiight.
You supported the December compromise -which extended the tax cuts you had been fighting for a decade- to hold off worse in January? Riiiight. What would be worse?
This behavior is STRAIGHT from Veal Pen “First Principles.”
Sounds about right; this was hoisted from the comments at nakedcapitalism:
However, this diary seems to be a strawman. I don’t think anyone accused the CBPP of being bribed to support that bill. This is just one more example of sophistry from the Obamabots.
I personally don’t think CBPP was bribed by Peterson. Rather, they’ve accepted the nonsense that there is a debt/deficit/debt-to-GDP ratio for many, many years now. That’s their problem. They share a basic frame with Peterson. They’re just haggling with him over the price!
The real question is whether it’s progressive to argue from within that framework or whether to be progressive you have to reject it and take the position that real human needs trump deficit/debt concerns every time. I think the answer to that is they do, and also that there is no deficit problem: http://my.firedoglake.com/letsgetitdone/2011/04/15/tell-president-obama-and-everyone-else-theres-no-deficit-problem/
“We consistently called for the expiration of the upper-income tax cuts at the end of 2010, and supported the December compromise because we were convinced its defeat by the last Congress in December would lead to a more unfavorable deal under the new Congress that took office in January.”
The default would have been to revert to Clinton-era taxation if there was no deal and if the Republicans did pass legislation on their own, they lacked a veto-proof majority so the alleged fears are unfounded meaning that too would have resulted in Clinton-era taxation.
Several commenters were puzzled by our statement that once the deal was struck, its rejection by Congress in December would likely have led to a worse outcome. But sadly, that is the case. Republican leaders in Congress were content to have Congressional Democrats turn down the deal in December. House Republicans would then have passed either a two year extension of the Bush tax cuts or a permanent extension as the first order of business of the new Congress in January and taken to the airwaves telling Americans — whose take home pay would have gone down starting with their first paychecks in January — that Democratic refusal to accept this bill was to blame. We were convinced (rightly I believe) that between the backlash from millions of middle class Americans seeing their paychecks go down and concern over the impact of the resulting withdrawal of purchasing power from the economy, the White House and Democrats in Congress would have felt compelled to negotiate a new deal. And the odds are very high it would have been a significantly more unfavorable deal than the one negotiated in December.
How could it have been more unfavorable? The December deal included a 12 month extension of federal unemployments benefits for people who have been out of work for more than half a year, plus a two year extension of tens of billions of dollars in refundable tax credit expansions for low-income families that were included in the 2009 Recovery Act and were slated to expire on December 31, 2010. The refundable credit expansions alone (principally in the Earned Income Tax Credit and the Child Tax Credit) are keeping over one million parents and children out of poverty. House Republicans are opposed to both the federal unemployment insurance benefits and the refundable credit expansions. It is very likely that if a new deal had been negotiated with the new Congress, one or both of these provisions would have been removed, while the high-income tax cuts would have remained or been made worse.
As our earlier post noted and some commenters have recognized, CBPP has helped lead the effort for 10 years against the high-income tax cuts. We also worked throughout 2010 for their demise at the end of the year. So why then did we counsel approval of the deal when it was struck. Yves Smith’s answer is that we must have sold out for money. This is simply false. We have never received a dollar from Peterson, and Smith’s new claim –in today’s post — that we must have done it to maintain access to Democratic Party oriented donors is far off base. In fact, our position COST us significant resources, as a result of at least one unhappy donor who has ceased to support us. There is not a single donor who directly or indirectly indicated in any way, before or after, that they wanted us to recommend approval of the deal, and we have no donors I’m aware of who would have been unhappy with us if we urged the deal’s rejection. Money had nothing whatsoever to do with it.
Contrary to Smith’s implication, we did what we always do — conduct the best analysis we can and seek the best achievable outcome for low and moderate income people. We concluded that the consequences would be significantly worse if the deal were rejected in December and renegotiated in January with the new Congressional leaders. The actions of the new House since January reinforce our view that this was the right judgment. Others can disagree. But I urge those who do disagree to do so without leveling accusations of our having sold out, taken bribes, or the like. Such allegations are very wrong.
Bob Greenstein
Please. CBPP has been very consistent in its opposition to top-bracket tax cuts. The December deal paired extension of these cuts to UI extension. It is perfectly possible to oppose the former in isolation, and regret their pairing, but recognize that that deal may be the only way to get the latter approved, and support this as the highest priority.
Strawman? Sophistry? did you actually read the original post?
“Bribes work. AT&T gave money to GLAAD, and now the gay rights organization is supporting the AT&T-T-Mobile merger. La Raza is mouthing the talking points of the Mortgage Bankers Association on down payments. The NAACP is fighting on debit card rules. The Center for Budget and Policy Priorities and the Economic Policy Institute supported the extension of the Bush tax cuts back in December.”
Yes, I did read the original post. The organization was mentioned in passing only.
Also, I saw no evidence of this accusation in that post:
Please show me where Yves said this.
Dear Mr. Greenstein,
I would not accuse CBPP of “taking bribes” but of making a poor decision. The choice will be the same in 2012. Will CBPP cave yet again? The choices will be pretty much the same if the GOP retains their control of the House. It should be interesting to see if CBPP (and yes, our President also) can find any line in the sand to draw against the GOP onslaught against civil society.
The President could have won the ensuing rhetorical war. He should have not given in and the Bush tax cuts should have been left to expire as they were supposed to (per the original GOP legislation!). You also left out the fact that many low income households now wind up paying MORE in taxes as a result of this deal (expiration of Making Work Pay, which see). Politically, the flat tax revenue continues to haunt the budget making process….giving yet more aid to GOP calls to slash social services.
The President cut a bad deal. Your organization supported that bad deal.
The initial paragraph of the post in question, which I reproduced in full, contains a clear implication that the CBPP’s support for the December 2010 legislation was effected via bribery. CBPP was not mentioned merely “in passing,” but in the clear context of the assertion that “[b]ribes work.” If you are unable to perceive this, there is no point in further discussion. And yes, accusation can be accomplished by insinuation, as is widely recognized, e.g., in defamation law.