President Obama Is an Apprentice Negotiator

President Barack Obama's negotiations with Republicans over extending both the Bush tax cuts and unemployment benefits reminded me of an episode of The Apprentice. In week 11, the Octane team of Clint and Steuart was matched against the Fortitude team of Brandy and Liza. The task was to meet with QVC officials and pick a product to sell on television. The team with the highest sales would be declared the winner and the losers would have to face Donald Trump in the board room.

On the helicopter ride from New York City to QVC headquarters in Westchester, Pa., Clint concocted a strategy to trick the women. Although Clint and Steuart wanted to sell purses on TV, they pretended to want the watches as their first choice. In the negotiations with team Fortitude, they allowed the women to select the watches as their product; in a concession to the men, Octane was allowed to have a more favorable second time slot. In the end, the men got exactly what they had wanted all along.

In the negotiations between President Obama and Republican leaders, President Obama was similarly duped. Republicans played him by saying federal unemployment benefits would be extended only if Obama agreed to extend the Bush tax cuts for all people, including families earning more than $250,000 a year.

Instead of standing up to Republicans who have already declared their top priority is to deny him re-election in 2012, Obama wimped out. And, he wimped out when he had the overwhelming majority of the public on his side.

On the campaign trail, Obama promised to extend the Bush tax cuts only for individuals earning less than $200,000 and couples making less than $250,000. That would cover 98 percent of all taxpayers. Even John Boehner, the incoming Speaker of the House, said he would support a measure that did not include the tax breaks for the top 2 percent, if that were his only choice. Under pressure from his Republican colleagues, Boehner retracted his comment.

Extending the tax cuts for the rich makes no sense. At a time when both Democrats and Republicans claim to be concerned about the $1.4 trillion deficit, it will cost at least $80 billion over the next two years to extend cuts for the wealthy. If they stay in place for 10 years, the figure would rise to almost $700 billion, according to the Congressional Budget Office.

More than half of the Bush tax cuts of 2001 and 2006 will go solely to the richest five percent of Americans. According to the Census Bureau, the gap between the richest and poorest Americans is at its largest level since the government began tracking household income in 1967.

Obama said he did not want to risk damaging an already frail economy by standing up to the GOP on the tax extension for the rich. He said in order to get an extension of unemployment benefits, he had to compromise with Republicans and extend the cuts to everyone.

That was an enormous mistake. Obama should have borrowed a page from Ronald Reagan and dared Republicans to make his day. Let Senator Mitch McConnell and Rep. John Boehner explain to 98 of percent of Americans why they opposed legislation that would extend the tax breaks to them but not the top two percent of earners. the GOP leaders justify why those making $1 million or more should continue to get a tax break averaging $100,000 a year.

See how far "the Party of No" would get by denying additional unemployment benefits to the jobless in their home districts. Republicans don't mind playing a game of chicken with Obama because they know they can count on him running off the road, usually before they even start the engine.

Extending tax breaks to the wealthy, which the Congressional Budget Office said is the least effective way to stimulate the economy, was bad enough. But, to cave in to "hostage-takers" -- Obama's words, not mine – on the estate tax is even more indefensible.

Under current law, the first $3.5 million of an estate ($7 million for couples) is exempt from taxes, with the maximum rate of 45 percent on the remainder. The deal with Republicans increases the estate exemption to $5 million ($10 million for couples) and sets a maximum tax rate of 35 percent for the remainder. According to the Tax Policy Center, this will provide $25 billion in tax reductions during the next two years to the top one percent of estates.



The compromise with Republicans wasn't totally one-sided. In addition to a 13-week extension of federal unemployment benefits, the package continues for two years the American Opportunity Act that helps low- and middle-income families pay for college and improvements in the Earned Income Tax Credit. It also contains a one-year reduction of the Social Security payroll tax from 6.2 percent to 4.2 percent on the first $106,800 in wages.

Many believe Obama could have gotten those concessions without giving away the store.

Rep. Jesse Jackson, Jr., one of Obama's presidential co-chairs in 2008, said of his fellow Democrats: "…We capitulated too much in the majority, and now we're capitulating as if we're already in the minority. We're acting like inexperienced poker players who fold with a winning hand."





George E. Curry, former editor-in-chief of Emerge magazine and the NNPA News Service, is a keynote speaker, moderator, and media coach.