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Tax deal makes everyone unhappy -- except most Americans

By Ed Rollins, CNN Senior Political Contributor
  • Liberals think President Obama abandoned goal of raising taxes on the rich, says Ed Rollins
  • He says conservatives fear that tax deal will add to the deficit and help Obama win re-election
  • Rollins: Most Americans view it as a bipartisan solution and approve
  • He says getting Americans back to work is the priority, reducing deficit is secondary

Editor's note: Ed Rollins, a senior political contributor for CNN, is senior presidential fellow at the Kalikow Center for the Study of the American Presidency at Hofstra University. He is a principal with the Dilenschneider Group, a global public relations firm. He was White House political director for President Ronald Reagan and chairman of the National Republican Congressional Committee.

New York (CNN) -- Liberals are unhappy and think their leader, President Obama, has surrendered on raising taxes to the rich without a fight.

Conservatives and deficit hawks think the Senate Republican leadership has been snookered by the White House on a new $844 billion stimulus program that will increase the deficit.

Many think it is the first step in the Obama re-election game plan. The public, according to early polls, thinks the plan is good for the economy and, if this is the first exercise in bipartisan governing, the people approve.

Shared government, which doesn't really start until January, is never easy and seldom pleases either side. But it clearly is what voters chose in November and it is what we will have for the foreseeable future.

If both sides give it a little chance, it may work. And "work" is the key word. If we don't get Americans back to work, many in Congress and all the politicos who work in the White House, including the president, will find their jobs in jeopardy too.

Shared never easy and seldom pleases either side.
--Ed Rollins
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On Friday we had two events that were riveting cable television. Bernie Sanders, the junior senator from Vermont and self-identified "socialist" who votes with the Democrats, led an eight-hour-plus filibuster, railing against the rich and the president's deal on the Senate floor. Sanders makes the president's left-leaning philosophy almost seem conservative, which it definitely is not.

What most economists agree on is that raising taxes in January, which will happen if this deal isn't passed, will cause further economic damage.

The bottom line that can't be debated is that we as a nation spend more than we pay the government as taxpayers. In the last fiscal year, which ended September 30, we spent $1.3 trillion more than we had in revenue. In the first two months of fiscal year 2011, it's even worse. There is more red ink, and high deficits are projected out as far as we can see.

We can all agree that we need to reduce unnecessary spending and we need to add more revenue to the federal treasury. But that is where the agreement ends.

The Robin Hood philosophy of the Democrats, the "merry band," based on the heroic outlaw in English folklore known for "robbing from the rich and giving to the poor," is not good tax policy. It's also not true that the wealthy are getting away with paying less than their fair share.

The rich do pay taxes -- the highest rates and the largest amounts. The top-earning 5% of taxpayers (those with average gross income higher than $159,619), paid far more than the bottom 95%. The top 5% earned 34.7% of the nation's overall adjusted gross income, but paid about 58.7% of federal individual income taxes. (According to the Tax Foundation, based on IRS figures)

Even though the proposed deal is only for two years, it likely will last longer. I can't believe that taxes are going to be raised in a presidential election year, especially when of the 33 Senate seats that are up for election in 2012, 21 are occupied by Democrats.

There are nothing but hard choices ahead. As the Bowles-Simpson deficit commission's recommendations showed, there are no easy answers. The deficit panel's formula -- more taxes and deep cuts in entitlements -- was not realistic in today's political environment.

Right now, the real answer is get workers back to work, get them paying taxes and off unemployment benefits and create a growing economy.

Then you reset the priorities of the country and decide what is most important and how you pay for those priorities.

The second riveting TV event of Friday was former President Bill Clinton taking over from President Obama in the White House press room and holding court like in the old days.

He had come to the White House to support the president's plan. What the public saw was the old master at work as he showed the new guy how it was done. Unfortunately, President Obama had to go off to a Christmas party and leave the podium and the press in the hands of a man who clearly was loving his return -- Clinton would come back to his old job in a minute and would be welcomed back by many Democrats. He was Mr. Charm, and we remember fondly the work he did to provide bipartisan leadership during the turbulent 1990s, despite the government shutdown and the impeachment proceeding.

Clinton worked with the Republicans, Speaker Newt Gingrich and Majority Leader Trent Lott, on balancing the budget and on welfare reform. He showed, as had President Reagan before him, that bipartisan efforts can work if you make the effort and find common goals.

The common goal today is to get America back to work. But Obama shouldn't think for a moment that his allies of the last two years, led by the "about to be ex" Speaker Nancy Pelosi and her merry band of 2010 election survivors, are going to give him a break. Compromise is not part of her vocabulary.

Amid the political machinations of the week, there was a sad event. America lost a great warrior and an extraordinary diplomat in the sudden and tragic death of Richard Holbroke. He served his nation well and the country and the world is a better place for his service. We were always on opposite sides politically, but it is clear he always put his country first and will be missed.

The opinions expressed in this commentary are solely those of Ed Rollins.