I think I've spotted the mother of all wedge strategies that the Dems could use with respect to the expiring Bush tax cut issue.
At the moment, it appears that Dems are slowly but inexorably headed toward caving on the conservatives demand to include the top 2% in the tax cut extension--at least for a year or two. They are too afraid that they can't battle the attractive lie that giving tax breaks to the rich "stimulates the economy," "creates jobs" or some other such nonsense. What if there's a way to come out with a big win--policy and political--no matter how the Republicans decide to play the issue? Details below.
Step 1: Acknowledge that ANY extension of the Bush tax cuts adds to the deficit (3.3 Trillion for Dem plan and 4 Trillion for Republican). Dems view their plan as an INVESTMENT in the middle class and in the economic recovery of Main Street.
Step 2: Ask repeatedly and loudly of all Repubs what justifies the US investing $700 Billion in the bank accounts of those making more than a quarter million dollars a year. What does Main Street USA get out this deal? What return on our investment should we expect? All new spending and tax cuts should be offset under PAYGO rules so that the deficit isn't increased.
Step 3: Obviously, the Repubs will insist that investing in the wealthy will generate jobs and economic recovery. Dems respond, "We agree that job creation is a worthy outcome of our investment. We are pleased that you're willing to invest $700 billion in job creation, but we should get as much job creation as possible from the $700 billion investment. If we spend $700 on rebuilding our infrastructure--bridges, roads, airports, rail systems--and build out our smart electric grid--we not only will create 7 million new jobs, but we will lay a strong foundation for future economic growth throughout the entire economy.
Step 4: Hammer the contrast hard that Repubs are willing to add $700 to the deficit to put in rich peoples pocket, but oppose the Dems plan to use the same investment to create 7 million JOBS (that can't be outsourced, BTW) and rebuild America. Whose values do you share? Get a little populist in service of this framing.
Can the Repubs continue to hold out against this framing? Even if some money is spent in select districts and states by Dems to push this choice--JOBS or rich people?
Perhaps they can hold out and threaten to allow all cuts to elapse, but now the Dems can insist that the Repubs are holding out on both middle class tax cuts but also on the creation of 7 million jobs, just so that the top 1-2% can keep their unpaid for tax cuts. Is that the change the Tea Party grassroots were expecting?
If the Repubs want to hold all tax cuts hostage and let them expire, it will only raise the public profile of this contrast between the two parties--Dems marching in the street for 7 million jobs, Repubs allowing taxes to go up for everybody so that the wealthy get theirs. Remember that the deficit would go down a lot in this scenario, and the economic pain would definitely be placed on the Repubs.
In the end, I wouldn't be unhappy if the Dems end up negotiating a temporary extension of the upper end tax cuts in exchange for spending the balance on a massive infrastructure program.
Note also that the entire debate will hinge in the media on whether investing in infrastructure or giving money to the wealthy creates more US jobs. It will shine a light on the bogus record of the entire tax-cuts-are-good-for-jobs meme of the conservatives.
What do you all think?