Bad Deal

Washington treated us to a stunning piece of political theater in December. The confluence of a lame-duck session of Congress, expiring Bush-era tax cuts and the Obama administration’s fear of partisan gridlock produced some unusually hasty deal-cutting. Negotia-tions yielded a proposed tax package deemed a satisfying, prudent compromise by some. Others labeled the horse-trading between the president and the newly empowered Congres-sional Republicans an abomination. Allow me to explain the source of my own disappointment with the deal (still tentative as I write).

Liberals rightly accuse the president of capitulating to high-handed pressures by the Republicans for the preservation of huge tax cuts for the very wealthy. It is easy to agree that giving a $700 billion bonus to the privileged undermines the urgent task of deficit reduction. But consider two further items: the specific details of Obama’s concessions and a broader observation about our national discourse on wealth and taxes.

First, the president accomplished two major objectives in this complex deal. The first was securing a 13-month extension of jobless benefits for millions of the long-term unemployed, a measure that had stalled for lack of Republican support. The other was extending tax relief for middle-income American families. Any standoff allowing the Bush tax cuts to expire on Jan. 1 would have hit the middle class very hard in these difficult economic times, with unemployment still hovering near 10 percent.

From the perspective of Catholic social thought, with its special concerns for the poor and for fair sharing of social burdens and benefits, it is impossible to defend the way these two objectives became bargaining chips in a negotiation that ultimately redistributes wealth even further upward in the economic pyramid. To anyone with a taste for equity, insisting on budget-busting tax breaks for the affluent as a condition for relieving the distress of others is an indefensible course of action. It reveals warped priorities and political cynicism.

This is not a partisan point. Regardless of how particular parties or officeholders happen to line up, public policy measures that keep bread on the table of food-insecure households remain quite simply the right thing to do. How many reminders do we need that a record 42.9 million Americans are receiving food stamps, with millions more eligible? Holding financially strapped families hostage to self-serving, politically motivated demands is blatantly immoral, pure and simple.

My second point is not so much a matter of dollars and percentages as of philosophy, perhaps even ideology. Think of the unstated assumptions that surface all too often when Americans discuss income, wealth and taxes. We fall so easily into a mind-set that views the political and economic systems as mere mechanisms that operate without reference to values and morality. Markets and public policies churn out and distribute benefits in ways that respond to power, talent and perhaps luck, but need not serve any ultimate ends. There is no particular moral meaning to the taxes we pay or the wages our corporations offer. Ethical principles like progressive taxation and the living wage are nuisances at best, serious liabilities in international competition at worst. In a world governed by nothing more enlightened than the bottom line, there is scant room for social concern. The individuals imagined within this mythic and dystopian picture of reality are sovereign monads, unencumbered by social relations—not real people.

To evaluate such social and national institutions as the federal tax code according to this alluring but false ideology is to turn one’s back on the best of the Western philosophical tradition. Erasing the obligation to undertake sacrifices for the common good means parting company with Catholic social teaching and every other commendable approach to social responsibility. Good public policies require a moral compass, and the United States needs to dust off the compass it once employed.

The episode in our nation’s capital reveals how poorly the operations of our public life reflect and appreciate the central purpose of our economy, namely to meet the basic material needs of all members of society. Needs should take precedence over wants, necessities over luxuries. Insisting on a fairer sharing of social burdens and benefits may not always be popular, but it remains the right thing to do.

This article appears in January 3 2011.