Just for fun, let's consider a way to get to an outcome where the tax cuts on the first $250,000 in earned income are extended, while the cuts on income above that level expire.
Why not, right?
OK, first thing you need to know about this is that it's the longest of long shots, for a number of reasons. Not least of which is that it uses reconciliation to get the job done.
But how is that possible if the Congress never adopted a budget resolution for fiscal year 2011 that contained reconciliation instructions?
The answer is that reconciliation instructions such as the ones adopted in the budget for fiscal year 2010 -- the ones that enabled the passage of the "fix" for the Affordable Care Act -- only expire at the first of either: 1) the adoption of a new budget resolution, which hasn't happened, or; 2) the end of the Congress that passed them, which also hasn't happened yet.
But what about the fact that reconciliation instructions can only be used once a year?
Well, that's not exactly true, either. A closer-to-correct statement would be that reconciliation instructions can only be used once per budget cycle. The last time they were used -- in early 2010 -- was in the FY2010 budget cycle. We're currently in FY2011, and the FY2011 budget cycle.
A fuller discussion of the situation is available at Congress Matters, but the point is that reconciliation might not be a dead letter after all. And if it's not, then how about this?
Pass the tax cut extensions for everyone, across the board. Send it to the president, and get it signed into law.
Then come back with a reconciliation bill repealing the extension for the top brackets. Since current law at that point will score the repeal as a $700 billion savings over 10 years, you're good to go on the deficit reduction requirement. Move it under the FY2010 reconciliation instructions, and you're done.
Why not just pass the extensions you want under reconciliation instead? Well, the Senate actually changed its rules in 2007 to prevent the use of reconciliation for measures that increase the deficit the way the 2001 and 2003 tax cuts did. So that option isn't really available.
And why involve reconciliation at all? That is, why not bring a bill extending the cuts just for the first $250,000 in income? One possible reason for worry is that the minority will have the right to offer a motion to recommit the bill that would add an amendment extending the cuts for all income. And the fear is that enough Democrats would bolt on that vote that when it's all said and done, you'd end up voting on an all-or-nothing package anyway.
Now, if it were to happen that way, you'd have good reason to doubt whether or not you'd be able to pass a rollback in the House no matter whether reconciliation was used or not. But having a legitimate path to passage in the Senate (thanks to reconciliation's protection from the filibuster), you might have considerably more sway in holding the House caucus together. A significant number of more conservative Democratic votes in the House will be uncomfortable with going out on a limb for a rollback if they think it'll just be killed in the Senate, anyway. Show them a path to passage, and minds might be changed.
Is it a risk? Yes. Does it require bold moves we're not used to seeing from the Democrats in Congress? Yes. Does that mean it's very unlikely to happen? Yes. Can it fall apart in the middle of the process and leave us stuck with across-the-board extensions? Yes. (But there's a way around that, too, if you're really adventurous.)
But it does lay out a viable path to an end result of tax cut extensions for the middle class, without the added baggage of extensions for the rich.