We all know that all the Bush era tax cuts will expire at the end of the year unless passes legislation to stop (temporarily or permanently) some or all of these cuts from expiring. We also know that President Obama and the vast majority of Dems. in Congress want to make those tax cuts permanent for families earning under $250,000 per year and allow them to expire for the 2% of those in the country who make more than that each year. While the Republicans on the other hand would like to make all the tax cuts permanent. With the deadline for extending any tax cuts fast approaching, Congress and the President are facing a game of political chicken:
Will the Republicans succeed forcing the Democrats to extend all tax cuts rather than let them all expire? OR
Will the Democrats succeed in forcing the Republicans to extend only the "middle class" tax cuts?
Join me after the jump /\ for some, hopefully interesting discussion of the politics and legislative process behind this important issue, and how the Dems. should play their hand. Also, don’t miss the FP post on this topic by Dante Atkins.
First off, President Obama did an excellent job of framing the issue for Dems. in Friday’s press conference. As pointed out in this Huff Post Article, the President made clear that the Republicans want to hold the middle class tax cuts hostage so they can extend tax cuts for their super rich friends. There are a number of positives in this political move by President Obama that should not go un-noticed:
- Framing an issue before your political opponents do is critical, since it immediately places the other party in defense mode. If the Republicans had beaten us to the punch on framing this issue, they would have likely portrayed the upcoming debate something like the Democrats threatening to increase middle class taxes to prevent small businesses from getting a tax break. This would have placed us in a defensive mode, but instead we are playing offense, which is always a better political position.
- The substance of this framing is a populist one, which is in line with how this issue is polling. The latest polls show that while voters want their middle class tax cuts extended, a substantial majority want to see them expire for the super rich. Yes, the Republicans will try to paint this as pandering to class warfare. But "F" them! Dems. need to stand up and point out that the Republicans and their rich corporate friends have been engaging in class warfare for decades with their proposed cuts to poor and middle class aid programs and tax breaks for multi-national corporations who ship middle class jobs overseas. Its only when the Democrats fight back for the middle and poor classes with a more progressive tax policy like this one, that the Republicans scream class warfare. "F" THEM, again!
The Democrats next step is to carry President Obama’s framing through by repetition, so that it becomes the dominant political narrative on this issue. I have often observed that he who controls the narrative on an issue is more than half way to achieving the desired political outcome.
The President did one other positive thing in his Friday press conference. He also appropriately framed the legislative agenda on this issue:
"My position is, lets get done what we all agree on," said the president. "What they've said is, 'We all agree that the middle-class tax cuts should be made permanent. Let's work on that, let's do it.' We can have a further conversation about how they want to spend an additional $700 billion dollars to give an average of $100,000 to millionaires. That, I think, is a bad idea. If you were going to spend that money there are a lot of better ways of spending it. But more to the point, these are the same folks who say they are concerned about the deficit -- why would we borrow money on policies that won't help the economy and help people who don't need help."
EXCELLENT!
This effectively separates legislation making the middle class tax cuts permanent from legislation to extend the super rich tax cuts, and on the latter allows Dems. to paint Republicans as phony deficit hawks. Brilliant! Now that the President has set this up so well, how should Dems. in Congress carry this forward?
Pre-Election Congressional Session –
Congress convenes this week to start a short, pre-election session. To be perfectly frank, this pre-election session is first and foremost about scoring political points so that we can minimize our loses in November and retain majority control of both Houses. So how should Dems. use the issue of extending the Bush tax cuts to score the most political points in this pre-election session?
Well what they should do, and may very well do, is to draft legislation in the House that makes the tax cuts permanent only for those making under $250,000 and quickly get it to the House floor. Setting aside the fact that tax legislation must originate in the House under the Constitution (there is a way around this that I won’t get into right now), there are fewer ways for the Republicans to obstruct legislation in the House than in the Senate as we all know, so they can’t prevent the legislation from getting to the floor in the House like they can in the Senate.
Once the legislation is drafted, the next question Speaker Pelosi needs to decide is whether to allow amendments on the floor? The House Rules Committee, headed by Pelosi allie NY-Rep. Slaughter, can pass a rule, under majority vote, to allow each side/party the ability to offer a limited number of amendments on the floor, or they can adopt what’s called a "closed rule" which does not allow any floor amendments. Looking at whether the Dems. would want to offer amendments to an already politically popular bill like this one, I don’t see any political advantage in doing so. In fact it would be a mistake to try to attach unrelated legislation to this bill that could give Republicans political ammunition to attack it and make it harder for some Dems. to vote for the bill. The Republicans would of course want the ability to amend the bill on the floor so they can try to tack on their tax cut extension for the top 2%. If Pelosi, who, as we all know is a professional vote counter, has enough Dem. votes to defeat such an amendment, than she should by all means, allow the Republicans to bring it to the floor. This would put the Republicans in the awkward position of having to vote on extending tax cuts for the super rich just before the election. And after the Dems. defeat that amendment, with the possible help of some politically vulnerable (chicken) Republicans, they can force Republicans to vote on the bill itself, where they will have to decide whether to continue to be the party of NO and vote against a politically popular bill to make tax cuts for the middle class permanent. A "no" on such a bill is obviously politically bad for any Republican, while a "yes" vote will leave them open to a thank you embrace by President Obama which could lose him/her votes with the anti-Obama base.
If the Dems. play this right, as I have laid out above, each Dem. House member can tout having voted for middle class tax relief, which Republicans, at least some, opposed because it did not extend to their rich masters. POLITICAL GOLD in the November my friends!
Post-Election Congressional Session –
Now, on to the Senate. But NOT before the November elections. Why not until after the elections? Because, its unlikely that there would be enough time left in the short pre-election session to get a motion to proceed passed to even begin debate on the bill, no less pass anything. As we discovered during the HCR legislation, the Senate process is messy, and you don’t want to be stuck in the middle of the mess going into the election. You’re far better off politically, to take the momentum of passing the House bill into the elections.
Coming back after an election in a lame duck session and trying to pass anything is a gamble. You don’t know for certain who the "lame ducks" will be, or what attitude they will have towards the opposition party or their own. You may even be pleasantly surprised by a lame duck Republican who feels free from party pressure to vote the way he/she wants, or who is seeking a bit of revenge against their party if he/she feels they lost due to lack of party support.
Anyway, the first thing Senate Dems. need to do is to get the House bill onto the floor of the Senate. Before we get in to how that might be done, we need to cover and keep in mind some important political facts that are significant motivating forces on both sides of the aisle:
- The Republicans want the tax cuts for their super rich friends are extended. As President Obama stated, their leadership has sent signals that they are willing to filibuster and stop any tax bill that does not include an extension for the rich, thereby allowing everyone’s taxes to increase in 2011.
- The Democrats know they must pass a bill to extend the middle class tax cuts or they will be held politically responsible for the increase. This unfortunately puts them in a bad negotiating position, since the Republicans know that the Dems. have more to lose if a bill is not passed.
- The Senate Dems. are not united in opposition to extending the super rich tax cuts. There are a number of our blue dog friends who have already said they are in line with the Republicans on extending tax cuts for the rich. Usual deficit concern trolls like Nelson, Dorgon and others are in this group, revealing their true colors – the deficit is only a concern to them when talking about government expenditures, not government revenues.
- Although all the tax cuts will technically expire at the end of the year, there may be a window between January and the April 15 income tax filing deadline for the next congress to fix it. However, even the rosiest prediction for Dems. in the Fall elections does not suggest that the next Congress will have any more progressive Dems. in it than the present Congress.
So back to how Senate Dems. can get the House’s middle class tax bill on the floor. Here are the options:
- Unanimous Consent - Since it is certain that the Republicans will object to a Unanimous Consent request to get it on the floor, consider this option DOA.
- Motion to Proceed Republican Pick Off – Dems. may be able to find a Republican or two who is willing to vote for cloture on a motion to proceed in order to get the bill to the floor. Voinovich and possibly some other lame duck Republicans might be willing to cross the aisle, but there are no guarantees. Also, some Senate Dems who want to see the super rich tax cuts included may support a Republican filibuster of the House bill. So it cannot be assumed that all Dems. will vote for cloture.
- Motion to Proceed Deal #1 - Some type of deal might be struck to break a Republican filibuster on a motion to proceed. The Republicans might accept a deal that brings the middle class tax cut bill to the floor in return for allowing a separate bill to be introduced to extend tax cuts for the super rich as President Obama has suggested. But its doubtful they would go for such a deal since they would lose the leverage they have with the middle class bill. They know there are still enough Dems. to either vote down a separate bill or at least enough to filibuster it for this year.
- Motion to Proceed Deal #2 - A deal Republicans might accept is to allow them to bring their super rich tax cut extension up as a proposed amendment to the middle class bill. While this maybe the Dems. best chance to get the middle class bill to the floor, its also the most risky, which I will get to later. Still if this is the only way to break a Republican filibuster and get the bill to the floor, expect Dems. to strike the deal.
If the bill gets to the floor via either of routes 2 or 3 mentioned above, passage should not be a problem since the Republicans either won’t have the votes to stop it under #2 or indicated that they don’t have the stomach to stop it under #3. I did not include route #1, because Republicans could simply allow the bill to come to the floor so they can try to tack on their amendment, which brings us to route #4.
Under route 4, the Dems. will need to find a way to stop the Republican amendment to extend the tax cuts for the upper 2%, without stopping the middle class tax cut base bill. Here’s where it gets tricky.
Here are the options as I presently see them, some of which involving the game of political chicken I eluded to in the Diary title:
- Senate Majority Vote – The simplest and cleanest way to stop the Republican super rich amendment is to allow a majority vote on it and defeat it with 51 or more Senate Dem. votes. But that assumes there will be 51 Senate Dems. willing to vote it against the amendment which is not entirely clear at this point. There may be enough blue dog, or DINO if you prefer, support to pass it with a Republican voting block. Still, since the polling has consistently indicated significant majority opposition to extending the tax cuts for the super rich, it may be difficult to garner enough votes to pass an amendment for the super rich.
- Senate filibuster – If it becomes clear that the Republicans have enough DINO votes to pass the amendment, true progressive Senate Dems. could mount a filibuster against the amendment. All that would be needed is 41 Senate Dems. to vote against a cloture motion to sustain such a filibuster. However, this option entails a game of political chicken since filibustering the amendment also stops the base bill from moving to a vote with the end of the year clock ticking down where all the tax cuts expire. Would some DINOs blink and indicate that they would vote down the amendment if progressives end the filibuster, or will some progressives blink and vote for cloture to allow the amendment and bill to pass? Good question, ehh!
- Punt to the House – The Senate could pass the amendment and the base bill and send it on to the House. The House could then insist on a Conference with the Senate where Conferees could strip out the amendment sending the agreed to base bill back to the House and Senate for a final vote. Besides the fact that sending the bill back to the Senate provides the Republicans with another filibuster opportunity if they choose to engage in another game of political chicken, there is likely not enough legislative time left in the year for all of this legislative procedure to play out.
There are of course other options where compromise deals could be struck such as the Orzag compromise discussed last week where the middle class tax cuts are made permanent while the super rich tax cuts are temporarily extended for two years. But make no mistake about it, compromises such as this are nothing more than Democratic veiled white flag of surrender to the Republicans and their rich friends. Anyone who believes that Congress will definitely let the super rich tax cut expire in the future if they won’t do it under the present Dem. majorities is simply whistling past the graveyard.
Lastly, there was some talk last week of whether President Obama would veto a tax cut extension bill if it included an extension for the super rich. Let’s be real about this, boldPresident Obama CANNOT veto this bill no matter what it contains!bold It is simply politically untenable. He cannot be labeled as the President who increased middle class taxes in 2011 as he goes into the 2012 race. The Dems. in Congress need to step up and work this out, not simply punt it to President Obama and put him in this rock and a hard place type of situation.
That’s all I have for now. I will be watching in the coming weeks, as I am sure some of you will, to see how this all shakes out and to post action alerts if it becomes necessary to firm up the spines of some of Congressional Dems. Should be interesting!