Will there be a Great Compromise in 2010?

On December 7, President Obama announced a tax-cut compromise—a combination of Bush era tax-cut extension and 13-month extension of federal unemployment programs—with the Republican Party that rules the House again after 2010 mid-term election. In this harsh time when the national unemployment rate is 9.8%, any kind of unemployment benefit that survived the Republican Renaissance would have expected wide-open and welcoming arms. Instead, the compromise stirs angry and anxious voices, even among Democrats. Why?

It is largely because the extreme ideological polarization of the political parties. After the breakdown of the New Deal Coalition followed by the party realignment, GOP and Democratic Party came to represent the ends of a liberal-conservative spectrum in the United States. One of the “issue dimensions” in the American politics according to Carmines is economic and social welfare dimension, including tax-cut, budget deficit, and welfare programs.

In the development of this issue, Republicans have consistently rejected welfare package for the unemployed because it increases the federal deficit. But sometimes, their arguments were not so clear other than their partisanship, as in the case of Senator Barrasso blocking the Senate’s unanimous consent agreement process against unemployment benefits last week, who apparently did not understand the details and made a blunder on the number. This particular tax-cut compromise has also raised concerns because of its cost $900 billion. However, even though the federal deficit in the long term is a detriment to the country, the short term effect of economic stimulation estimates about 3.1 million job creation is critical both for the salvation of economy and for the Democratic Party in the coming elections.

When President Obama still needs at least 18 Senate Democrats even with unanimous Republican votes, the Democratic support is unclear due to the concession he has made for extending the Bush era tax-cut that aroused discontent among Democrats. Even though this “partisan warfare”, as Mayor Bloomberg criticized this afternoon, is inevitable due to the ideological polarization in the present American politics, hopefully the Congress will reach the decision to save the drowning economy in any manner, in some time soon.