So the 2001 Bush tax cuts are expiring at the end of this year. We're clear on that.
And hopefully, you're already aware of the fact that they're expiring because the Republicans who passed them were themselves forced to impose a 10 year sunset on them because they were budget busters, and because they were using reconciliation in 2001 to pass those cuts, so they had to cap the losses. You remember reconciliation, right? That process that Republicans condemned as Teh Evil, Un-Democratic Nuclear Option Socialismz earlier this year? Yes, that reconciliation.
Well, now that the sunset date is upon us, the Republicans are wailing and gnashing their teeth that the budget busting caused by tax cuts should never have to be paid for. So it wasn't enough for them that they used reconciliation -- which is supposed to be used for deficit reduction -- to actually increase the deficit. On top of that, they're crying about having to cap the damage, arguing that it should be allowed to go on forever. Because it's so awesome, and stuff.
Of course, the polling says it's not all that awesome, and seems to suggest that Dems might do well to extend some of those breaks for the middle class, while letting the original Republican plan for the top brackets go unchanged.
Could that be a winner? Could Dems offer up a middle class extension without including one for the wealthy, and say "take it or leave it"? Early signs said yes:
On CBS' "Face the Nation" Sunday, House Republican leader Boehner said that if he had to, he'd vote to extend tax cuts for middle-class Americans (those making no more than $250,000 a year) even if the Bush tax cuts for the richest three percent were allowed to expire.
“If the only option I have is to vote for those at $250,000 and below, of course I'm going to do that,” Boehner told “Face the Nation” host Bob Schieffer.
It didn't take long, though, for the wobbliest Ds to undercut that:
Red-district Democrats are pressuring Speaker Nancy Pelosi to extend Bush-era income tax rates for all brackets, revealing a high-stakes rift between the party's vulnerable moderates and its safe liberals as the issue increasingly dominates the national debate.
POLITICO has obtained a draft of a letter from rank-and-file lawmakers to Pelosi and Majority Leader Steny Hoyer urging them not to let tax rates rise for Americans at the highest income levels.
And of course, you can't say "undercut" without mentioning Sen. Joe Lieberman (Self-CT):
I know that many people, including the President, have argued that the tax cuts should not be continued for people making more than $200,000 a year, but to me these are the people we need to be using their income to spend and invest to spur growth and job creation.
So what weapons do the guardians of privilege have at their disposal to leverage tax cuts for the wealthy out of this situation, and how far might they go?
In the House, you can likely expect Republicans to resort to their old stand-by, the motion to recommit (about which, read more here). Though the Democratic bill extending middle class tax breaks may well come to the floor without similar breaks for the rich, and may even be protected from an amendment that would add them in, when Republicans see Blue Dogs scrambling to sharpen "conservative" bona fides, that's when you're most likely to see a motion to recommit dangled before them in an attempt to lure them across the aisle. Such a motion to add in tax breaks for the top bracket (and even waive PAYGO rules to do it) might be exactly what's coming.
On the Senate side, of course, there's everybody's favorite: the filibuster. Which Mitch McConnell is already promising.
That's predictable enough, and might be sufficient to win at least a temporary extension for top earners, even though it would likely require Democratic support either for a PAYGO waiver (since middle class cuts, but not cuts for the rich, were exempted) or budget offsets elsewhere. But will that satisfy the Teabagging Caucus? Remember, it's their ideological position that tax cuts don't need to be "paid for" at all. And if they're going to take a hostage anyway, why ransom that hostage for temporary cuts if the middle class ones are going to be permanent?
The flat-out failure of the bill results in the expiration of the tax cuts across the board. Whose fault would that be? Well, in the logical world, it'd be the fault of obstructionists who prevented the Senate from working its will on the issue and having a vote. But in Teabag Land, it's The Evil Sociamalist Obama's fault, for being president when it happened. Something they'd be more than happy to campaign against.
Are they that crazy? Would they knowingly and willingly hit everyone with this just to win the ideological point on paying for tax cuts? Well, these are the guys campaigning openly on the platform of a government shutdown next year. So let's just say I wouldn't put it past them. Well, I guess I just did. So let's say something else. Like, maybe... uh, well... how about, "Yes they are that crazy"?
With time ticking down on the Congressional session, every day wasted on an ideological filibuster of the tax bill is a victory for the Teabag Republicans. It's a day not available for judicial nominations, DADT repeal, infrastructure investment legislation, climate change legislation, you name it. How might Democrats respond to such obstructionism? Would they be able to find Republican cloture votes for a deal that includes permanent cuts for the middle class and only temporary ones for the rich? Would they back off and make them all temporary (and would "fairness" be enough to win actually win cloture votes)? Would they head straight into the showdown and hope to be able to explain the nuance clearly enough that blame will rest where it should?
One thing seems clear: "moderate" Dems (like Conrad, Lieberman, Webb, Nelson and Bayh) signaling a willingness to give an inch in compromise are in fact holding the door open for Teapublicans who want to take a mile. In an ordinary world, and with bargaining partners interested in success, that might be a workable compromise position. Do they have such partners? Or are they walking into a trap?
