Tuesday, November 16, 2010

Outmaneuvered


On November 4, 2010 Digby contemplated the likelihood of a "temporary" extension of the high-end tax cuts, which the mainstream media has blessed with the label of "compromise." She speculated

I think this may be the one "compromise" the Republicans agree to. They will get credit for extending the cuts from the public, credit for bipartisan cooperation from the Village --- and most importantly, they will still get to run on the issue again going into the presidential election. This "compromise" a big winner for them all around.

This is one of those things the Democratic majority should have done long ago. They could have passed the tax cut extension for the middle class in the first year of the administration and argued about tax cuts for the wealthy as a separate issue. Instead, for reasons unknown, they waited until close to the election at which point a bunch of Blue Dogs went to the leadership and said they couldn't possibly win if they held the vote. (And then they lost natch.)

The Republicans are happy to have the "tax hike" boogeyman out there for 2012. And they are ecstatic that the administration has allowed themselves to be backed into the deficit corner --- the right's perfect terrain to wage this presidential campaign battle. Too bad for the rest of us.


But Senate Minority Leader Mitch McConnell had introduced legislation which would make permanent the Bush era-tax cuts both for the middle class and the wealthy. Permanent extension didn't seem to make sense as the GOP's goal, given the party's ability to use the upcoming expiration of the cuts as a political club against wary and intimidated Democrats. Now it appears that Digby was right and that McConnell's proposal was merely a negotiating tool, Jim Kuhnhenn of the Associated Press reporting

Senate Minority Leader Mitch McConnell has introduced legislation that would extend the current tax rates permanently, but on Sunday he signaled an openness to negotiate. "I'm willing to listen to what the president has in mind for protecting Americans from tax increases," McConnell (R., Ky.) said.

Two prominent Republicans conceded Sunday that the best that Congress might be able to accomplish in the coming weeks is a short-term continuation of the current tax rates, set under President George W. Bush in 2001 and 2003.

"If the president wants to compromise on a two- or three-year extension . . . if that's all we can get out of the president, and he is the president, so we'll work with him on that," said Sen. Jim DeMint, a South Carolina Republican and a leader of his party's conservative wing.


Republican President George W. Bush, a tax-cut fanatic second to none, signs into law legislation passed by a Republican-controlled Congress which cuts the income tax rate with a "sunset" provision, which requires the cuts to expire at the end of 2010. The cuts otherwise would have carried an exorbitant price tag seen abusive of sound budgeting. Comes 2010 and that same Republican Party parades rises up as one with the theme that if President Obama lets these same cuts expire it would constitute the biggest tax increase ever.

Democrats counter with support for extending those cuts for the vast majority of Americans, excluding the top 2% or so of citizens, and the media asks them: but will you compromise? And the GOP, having already set the terms of the debate, now says "o.k., we're big-hearted, we'll agree to extending temporarily the tax cuts for the rich."

This will, presumably, delight President Obama, whose commitment to no policy or principle exceeds his commitment to action he and traditional media can label "compromise." And two years from now we get to go through the same Kabuki dance. Only then it will not be the GOP demanding tax cuts for the wealthy by accusing the other Party of precipitously increasing them in the midst of recession; it will be the need to continue the cuts so as not to cut short the recovery. Shorter Republican Party: (a)in economic downturn, tax cuts for the least needy, necessary; (b)in economic recovery, tax cuts for the least needy, highly desirable; (c)in all other instances, see (b).








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