Daily Political Wire 12-7-2010

George Wenschhof

President Obama Announces Compromise to Tax Cut extension - no surprises as it contained an extension of all the Bush tax cuts for two years and a 13 month extension of benefits for the long term unemployed. Also included was a 2% payroll tax cut, estate tax goodies and some other middle class tax cuts put in place under the Stimulus bill. FirstRead.com has more here.

Interestingly, early estimates have the cost of this unfunded proposal at between 600 - 800 billion which is equal to the cost of the Stimulus bill.

Liberal Democrats feel President Obama sold them out and should have fought harder. However, the reality is an extension of the cuts for those making $250,000 or less only would not pass in the Senate.

There is talk as many as 40 of the more liberal Democrats in the House will not support the compromise bill. Vice President Joe Biden has been dispatched to the Senate to garner support from Democrats.

Overall, when the liberal Democrats stop their whining, they will find Obama extracted more from the Republicans than he gave, with the main impact being a continued infusion of money into a weak economy, an important move at this point.

Look to see Obama pivot to balancing the budget when he gives his State of The Union address in late January, with a revision of the current tax code being a pivotal component of his remarks.

Obama hinted at this when he announced the compromise yesterday, it was included in the recommendations by the bipartisan deficit reduction committee and federal reserve chair Ben Bernanke said the same Sunday when he appeared on CBS "Sixty Minutes".

Stay Tuned...

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Overall Cost of Bail Out bill only 25 Billion - the much maligned 700 billion bail out bill has been almost entirely paid back in two years. Yesterday, the government sold it's remaining shares of CitiGroup for a 12 billion profit. The Washington Post has more here.

The bail out bill was necessary at the end of 2008 due to mass mismanagement of financial portfolios on Wall Street and the financial sector.

25 billion to avoid another Great depression seems like a small price to pay.

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Palin says No to RNC Chair - Sarah Palin says thanks, but no thanks to the suggestion by the activist group Tea Party Nation. ABC News has more here. Several Republicans have already announced they will challenge RNC chair Michael Steele.

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Waters Wants House Ethics Committee Reviewed - Representative Maxine Waters (D-Calf.) will introduce a resolution in the House. This comes after her ethics trial scheduled for November 29 was called off with no explanation. Afterward, two attorneys on the ethics committee were suspended, again with no explanation. Waters was accused of improper action in regard to a bank receiving bail out funds where her husband owned stock. Politico.com has more here.

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Wikileaks founder Julian Assange Arrested in London - the arrest stems from charges from Sweden relating to a consensual sexual encounter back in August. This incident was reported widely back then and charges were not filed. The NY Times has more here.

Interestingly, the charges in August followed the first release of U.S. military documents by wikileaks.org.

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