This week, the Democratic Congressional leadership announced that they planned to adjourn without acting on the Bush tax cuts set to expire at the end of the year. Rather, they proposed to deal with this after the election in a lame-duck session. I'm at a total loss to understand their "strategy" in dealing with this issue.
On January 1, 2011, the Bush tax cuts are set to expire. On that day, every American, not just the rich, will be hit with a major tax increase. All tax rates will go up, including the bottom tax rate which will increase from 10% to 15%. Child tax credits will be cut in half. Yes, so too will the highest tax brackets, as well as the dividend and capital gains rate that primarily, but certainly not exclusively, impact the wealthiest class of taxpayers. But to let all the tax cuts expire will sock not just the wealthy, but the middle class too with a heavy tax increase - and this as the economic recovery is limping along with barely a pulse. That would lead to not only an economic disaster but also a political disaster for the President and the Democratic Party looking ahead to 2012.
For months now, Speaker Pelosi and Majority Leader Reid have promised to pass a bill that would make the Bush tax cuts permanent for those earning less than $250,000 while letting the cuts expire for those above this income threshold. Yet, here we are, barely ninety days from the end of the year, and the Congressional leadership has not even presented a bill for the tax committees' consideration. Why not? As best I can tell, the leadership is afraid that their bill won't pass given the Republicans' opposition and the large number of Democratic members who are prepared to vote with the Republicans.
Excuses about Republican opposition preventing the vote is just that, an excuse. The plain fact is that we have overwhelming majorities in both chambers. As we saw during the healthcare debate, we can pass a bill to circumvent the Republicans filibuster in the Senate. And with our large majorities, we can even afford to allow a fair number of red state Democrats and other DINOs to vote against us. The problem though is that, even with that margin, we have too many Democratic dissenters ready to vote with the Republicans.
So why would a lame-duck session offer us better hope for passing the leadership's bill than before the election? The obvious answer is that the leadership believes that they can convince sufficient numbers of these dissenters to vote with them after the election because they won't have to face the voters again for two years. Leaving aside the political cynicism involved in this strategy, how realistic is it?
Assuming, as now seems likely, that the Republicans make major gains in November, how likely is it that these DINO's will vote with the leadership in a lame-duck session? And, more importantly looking forward, what will the public think if the leadership's bill passes in a lame-duck session because of the votes of a dozen or so Democrats who had been defeated at the polls? That is why I suspect that the most likely result of a lame-duck vote will be a "bipartisan" compromise to extend the Bush tax cuts for two years. But either way though, the result will be painful.
What angers me most about this is that the leadership knew of the need to deal with the Bush tax cuts since the first day of this session and yet they waited and waited and did nothing. Why couldn't they have acted on this back in January 2009 when the President's and our party's popularity were high and the Republicans were totally discredited with the voters? Instead, they acted like they had all the time in the world and were holding four aces in their hand. Now the initiative has slipped away and a result that none of us wanted looks increasingly likely.