DN Editorial: Prez gives up on reaching 'grand bargain' on deficit

PRESIDENT Obama's call for the richest Americans to pay their fair share in taxes is mostly re-election politics.

And that's a good thing.

The jobs and deficit-reduction plan that Obama is sending to the congressional "supercommittee," which must come up with $1.2 trillion in budget cuts by Christmas, has no chance of passing.

That's a good thing, too, because it signals that Obama finally may have stopped trying to find common ground with Republicans.

Maybe he has figured out that they don't intend to do anything but obstruct all attempts to deal with the jobs crisis. That in turn means the potentially calamitous "grand bargain" that Obama proposed during the debt-ceiling crisis - which would have traded historic cuts in government services and the social- safety net for relatively modest tax increases - is off the table for now.

Instead, Obama is making a case for tax fairness, one that clearly resonates with Americans who no longer dream of making it rich but just hope to avoid becoming destitute.

A Gallup poll released yesterday found that Americans support increasing taxes on the rich by a 2-1 margin.

The White House claims its proposals would cut $3 trillion from the deficit by allowing the Bush-era tax cuts for the wealthy to expire and by closing tax loopholes - like eliminating breaks for oil and gas companies and for corporations with private jets.

Obama dubbed his proposals the "Buffett Rule," after billionaire Warren Buffett, who famously has observed that loopholes in the tax code mean he pays taxes at a lower effective rate than his secretary.

It's wrong, Obama said, for middle-class teachers, nurses or construction workers to pay higher tax rates (22 to 33 percent) than some hedge-fund managers who make much of their money in financial markets and so pay only 15 percent in taxes. And it's wrong, he said, to put the burden of reducing the federal deficit on ordinary Americans, by cutting government programs that aid them.

He vowed to veto any bill that would cut Medicare if it didn't also raise taxes on the wealthy.

This sounds a lot more like the 2008 version of Barack Obama than the sitting president, who up until a few days ago still seemed intent on "rising above" partisan politics to compromise with Republicans while drop-kicking progressive Democrats.

Whatever the motive, Obama's proposal highlights the tax code's role in widening the gap between the rich and the not-rich. While poverty is at record highs and middle-class incomes continue to drop, the wealthiest 1 percent of Americans now take home more than 20 percent of the nation's total income.

They should pay more in taxes. It's only fair.