There's been a lot of debate about will Obama, can Obama get just the middle class tax cut through without also giving up the additional tax cut on income above $250k.
Politically, the idea's a winner right now. 53% of Americans support the idea. Only 25% of independents want tax cuts for all, while 47% support the President's plan and 17% say get rid of them all (11% don't know).
However, after this weekend's vote, I think the writing is on the wall: the rich will get their tax cuts. It's completely unavoidable. The question is whether the Democrats will get something in return.
The vote on the middle-class tax cuts was pretty grim for Democrats: 53-36 in favor (yes, I realize the irony of this statement). The outstanding 11 votes were all from Republicans (Bunning, Burr, Chambliss, Cornyn, Gregg, Hutchinson, Inhofe, Isakson, Sessions, Vitter, Voinovich).
The Dems lost four votes from their own party, three up for re-election in 2012: Manchin, Nelson and Webb. They also lost the vote of the outgoing Feingold and "independent" Lieberman. That leaves the political math for the Democrats very dire going forward. If Manchin, Nelson and Webb all decide to stick with Lieberman and the Republicans on tax cuts for the rich, the Democrats get put into an untenable position.
The House in 2011 will be GOP controlled and, as either the first or second order of business, it is inevitable that they will immediately pass an extension of the Bush tax cuts. That will leave the Senate the choice of either bringing up the bill or ignoring it.
• Ignoring it. The GOP will scream, complain and accuse the Democrats of raising taxes. They'll shout "tax and spend liberals" at the top of their lungs for two years and the general public will eat it up because, as K said in Men In Black, people are dumb, panicky dangerous animals. Having your taxes go up and personally feeling the loss of the Bush tax cuts makes esoteric arguments about the relative impact of tax cuts on the revenue of the federal government moot (and arguments about deficits go completely out the window). And, if the economy isn't recovering "fast enough" (defined by Republicans as twice as fast as it is actually going), the loss of the tax cuts will suddenly become the root cause of economic woes (nevermind the fact that the recession started and persisted during the Bush tax cut era).
• Bringing it up. I can tell you, in no uncertain terms, exactly how the Democrats could win this argument. The GOP House passes the extension bill. The Dems amend the bill, strip out the "tax cuts for the rich", pass it by reconciliation and send it back to the House. That leaves the GOP House voting against tax cuts and the Democrats championing them.
The problem? The votes aren't there. Counting (sigh) Lieberman, the 2011 Senate will be 53-47. Take out Lieberman, Manchin, Nelson and Webb, you're at 49-51. Since Biden's the tie breaker, you really only need 50-50, but it would require flipping one of four Senators who, quite honestly, have already proven through their previous vote that they're immune to logic or rational argument. Unless you can bribe them to move to the middle, either with a promise to stay out of the 2012 election (Lieberman) or with some sort of more literal (earmark or government contract) bribe (Manchin, Nelson, Webb), the Democrats can't go down this path without facing the embarrassing possibility of passing, through reconciliation, the full extension of the Bush tax cuts. That'd put President Obama in a "veto or raise taxes" bind that's a no-win situation.
The end of the session (and the start of the above scenarios) leaves Democrats with very few moves left and I'm guessing everyone knows it. The Republicans don't really need to do anything but play out the clock at this point and they can either (a) get what they want with the full tax cuts or (b) get they really want with the deficit going down due to increased revenue (they'll take credit for that) and a giant political sledgehammer to use against the Democrats in 2012.
The Democrats made a huge, gigantic, very bad mistake in not taking this up before the elections. It was, without hyperbole, cataclysmic for President Obama's campaign promise.
As a result, the Democrats have three options: don't pass any tax cuts and take a political beating from the middle class, pass the tax cuts and get a beating from the left or pass the tax cuts in exchange for something and hope the beating from the left is slightly less brutal. Yes, these options all suck, but that's the price of consistent political ineptitude and a complete lack of foresight.