President Barack Obama announced the “framework” for his unilateral surrender betrayal of core principles deal with Republicans on extending the Bush tax cuts today. It’s worse than I expected, which is saying something. Republicans get tax cuts for all income levels extended for two full years (we’re supposed to believe Obama will stand up for letting them expire during a presidential election year). They agreed to extend some unemployment benefits, but only for 13 months. Although long-term unemployment is at historically high levels, the “99-ers” (people who have exhausted 99 weeks of unemployment benefits) will get nothing out of this framework. To sweeten the deal for Republicans, the estate tax will be reduced to 35 percent, and it will apply only to estates exceeding $5 million in assets. That’s very costly and not at all stimulative. To provide more disposable income for working people, the payroll tax on employees will be cut by two percentage points for a year. That’s good as long as it doesn’t become an excuse later to cut Social Security benefits. UPDATE: David Dayen reports that a senior administration official told him the payroll tax cut “would be paid for out of general revenue through a credit, and so would not impact Social Security and Medicare finances in any way.”

It astounds me that Obama could think he will gain politically from this bargain. How many videos like this one are floating around? October 30, 2008: “Why would we keep driving down this dead-end street? […] At a moment like this, the last thing we can afford is four more years of the tired old economic theory that says we should give more and more to billionaires and corporations and hope that prosperity trickles down on everybody else.”

After the jump I’ve posted some Iowa politicians’ reactions to the deal. I’ll update as more statements become available.

UPDATE: Late on Tuesday afternoon, the offices of Representatives Bruce Braley (D, IA-01), Dave Loebsack (D, IA-02) and Leonard Boswell (D, IA-03) have not responded to my requests for comment on the tax deal. How hard is it to express an opinion about the major decision of the lame-duck session? U.S. Senate conservadem Mary Landrieu of all people came out guns blazing today against the “moral corruptness” of the deal.

Republican U.S. Senator Chuck Grassley released this statement:

“Republicans support tax relief across-the-board, including the middle class, and have fought for it.  The middle class and the unemployed need job-creating policies that expand the economic pie, not shrink it.  Growing the economy expands the tax base.  Jacking up taxes would be a sure-fire way to deep-freeze hiring and kill the fragile economic recovery.  Job-creating small businesses storing up capital have been reluctant to create jobs and take on new payroll obligations, not knowing what their taxes will be in January.  Part of the blame is attributable to the uncertainty over the direction of tax policy.  Tax incentives that create jobs in renewable energy have been expired for a year, with no action, costing jobs.

“The current leadership is starting to face the reality of last month’s elections.  Americans want Washington to stop overspending and overtaxing.  Contrary to what a lot of Democratic leaders have said, raising taxes is not the magical cure that will shrink the deficit.  Higher taxes give big spenders a license to create new layers of government and put taxpayers on the hook for even more entitlements.  Higher tax rates siphon money out of the private sector and shrink the Gross Domestic Product.

“During the lame-duck session of Congress, arguments have been made that seem to say letting taxpayers keep the same amount of their own money is like handing out ‘bonuses.’  Iowa families who are worried about less take-home pay in January don’t consider preventing a tax increase on them a bonus, a windfall or a handout.  Tax revenue comes from taxpayers’ hard-earned money.  It doesn’t grow on Christmas trees, no matter how fanciful the rhetoric gets about millionaires versus the unemployed.”

If money “doesn’t grow on Christmas trees,” perhaps Grassley will spell out $900 million in spending cuts over the next two years to offset the expected cost of this deal.

Democratic U.S. Senator Tom Harkin released this statement:

“To say that I am disappointed with the deal the President laid out tonight is an understatement.  Senate Republicans have successfully used the fragile economic security of our middle class and the hardship of millions of jobless Americans as bargaining chips to secure tax breaks for very wealthiest among us.  With record unemployment and millions of Americans falling off the benefit rolls just as we near Christmas, America faces an emergency situation, and under these circumstances the validity of extending unemployment benefits and tax rates for the middle class stands on its own.  The same cannot be said for extending tax breaks for millionaires – they face no immediate hardship, such a move will not spur economic growth, and doing so will only add hundreds of billions to the deficit.  In addition, by extending tax rates for two years but unemployment benefits for only one, we almost ensure that a Republican-led Congress will be able to block a further extension of unemployment benefits if they are needed.

“I’ve asked this question before, and tonight I ask it again – Have the Republicans lost all sense of fairness? Have they lost all sense of justice? Have they lost all sense of what’s right and wrong? They can fight for their tax breaks for the wealthy, fine. But to say that we cannot extend unemployment benefits for people out of work without giving tax breaks to the wealthy – that’s a moral outrage.”

I’d like that statement better if Harkin had acknowledged the president’s betrayal and/or had promised not to vote for the package. What does he have to lose? He’s probably not running for re-election again anyway.