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December 02, 2010

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" I am no longer going to try to talk people into seeing that the “right” thing to do with the Bush tax cuts would be to let them all expire."

This is the right thing to do that neither side has the political will to even discuss.

This is the right thing to do that neither side has the political will to even discuss.

Ain't that America.

The right thing to do is let them all expire and spend the four trillion dollars they would cost on a five year stimulus plan including the retirement and replacement of all American coal power plants, high speed rail systems and transit, R&D for electric/hybrid vehicles and roll-out consumer subsidies for same, replacement of obsolete government buildings, and an economy-wide energy-efficiency program in which we replace and rebuild every energy-sucking device, building, and vehicle in the country.

I'd also like a pony.

Jeez Jacob, you're gonna get shot talkin that crazy talk

I have one little tactics question. Is there some reason that Democrats don't realize they are in the driver seat on this issue? If they do nothing, the tax cuts expire. Can't they use that as a threat to make Republicans do one or two things they want?

Isn't that obvious?

Am I crazier than usual on this?

Sebastian, I'd say probably because there's a significant number of Democrats, who are conservative enough so that 20-30 years ago they would have been Republicans, who are going to vote for the tax cuts unless the cuts are manipulated so they never come up for a vote.

In short, there are enough Democrats who are going to vote "Aye" that Obama's just got to see what little he can get.

Because the Blue Dogs and half a dozen Senate Democrats are chickens?

Can't they use that as a threat to make Republicans do one or two things they want?

i think the GOP trumped that yesterday when they threatened to blow up the Senate if they didn't get everything they wanted.

Still, Seb's right in the general sense: the Democratic Party could and "should" seize thhis issue. But the Democratic Party is not exactly a progressive entity, while some members are scared of their own shadows on all matters tax-related.

The Democrats can't, they promised the extension to everyone. They have to extend the tax cuts. It is better for them to break the promise on not extending cuts to the wealthiest than to break the promise of extending them to the middle class.

Paint meet corner. Republicans can just wait for the Dems to cave because their BANF is they are reducing the deficit. Win or win.

The Democrats can't, they promised the extension to everyone.

They did? When? Where? Who?

Sorry Eric, more specific:

The Democrats can't, they promised the extension to everyone under 250k. They have to extend the tax cuts. It is better for them to break the promise on not extending cuts to the wealthiest than to break the promise of extending them to the middle class.

Paint meet corner. Republicans can just wait for the Dems to cave because their BANF is they are reducing the deficit. Win or win.

Well, that still leaves room for option c:

Extend for under 250K, and not for over. No promises broken. More popular position in the polls, better policy than extend for all.

All around win.

Never mind.

and apparently that's what they're trying. but, of course, the Grand Obstructionist Party ain't gonna let it happen.

Marty, I get what you're saying, but they need to push the issue. They made a promise, but they can make it so the GOP breaks it.

Put the GOP on the spot, in the corner.

No they can't. What are they going to force the Republicans to do? No extension at all is the worst case for Democrats, not too bad for Republicans worried about the deficit. Extending all for some period of time may be the best case (although I think if 250k goes to a million the Republicans might go for a permanent extension at those levels).

BTW, Jacobs spending plan is why no one wants any of them to expire. Because we believe that is exactly where the money would go, same deficit 4 trillion later.

No extension at all is the worst case for Democrats, not too bad for Republicans worried about the deficit.

Actually, I think no extension for anyone would hit both parties equally hard. Maybe harder for the R's, actually.

Rank and file folks who voted for R's *did not* do so expecting their taxes to go up.

same deficit 4 trillion later.

Same deficit with all of the infrastructure Jacob describes above looks like a win to me.

A chacun son gout.

The wonder, for me, is that the Democrats (apparently) don't have a long-standing plan in place to deal with this. Did they not read the sunset provision in the original bill, andnotice when it was scheduled? Did they think, even for an instant, that the Republicans in Congress had any intention of letting the sun actually set on the new tax rates, at least without a major, knock-down-drag-out fight?

"Actually, I think no extension for anyone would hit both parties equally hard. Maybe harder for the R's, actually."

Anecdotally russell I would say I have been surprised at the number of Rep friends I have that have taken the deficit commissions warnings very seriously. More than one has said they would rather have all of the tax cuts expire if all of the money went to deficit reduction.

These are rank and file Reps who have mixed feelings based on your view of spending and their view of taxes. Many would be ok if the spending cuts came with the revenue increase.

It's time for the Democrats to take the lead on tax cuts: propose cutting every tax rate, on every tax bracket, in half, and damn the fiscal consequences.

Crazy, you say? Think about it: what would the GOP response be?

I suppose one response could be a sudden outbreak of bipartisanship. The GOP loves tax cuts; the GOP lives in terror of the (T)axed (E)nough (A)lready party; the GOP's entire economic philosophy is that "jobs" come from tax cuts. And the Dems finally agree! Whoopeee!!

Alternatively, the GOP can go ahead and explain to the Teabaggers and the Villagers and the "independents" that there's no way to "pay for" the Dems' tax cut. I'd pay good money to hear them making that argument.

For that matter, I'd happily listen to the conservative commenters around here make that argument.

--TP

"permanent extension at those levels"

Permanent?

So if the newly installed Congress of say, 2102, wishes to raise or lower taxes or otherwise adjust Federal revenues, they would be prohibited?

Also, good point, wj.

Permanent as opposed to a defined length of time until they are supposed to expire again, but then you knew that.

Anecdotally russell I would say I have been surprised at the number of Rep friends I have that have taken the deficit commissions warnings very seriously.

That's cool.

Personally, I would be OK with all of the cuts expiring, or only the high bracket cuts expiring.

I would be OK with putting all of the revenue to infrastructure, or all of the revenue to deficit reduction, or any combination of the above.

The only alternative that I see as being really and truly boneheaded is to extend all of the cuts, either permanently or not.

Folks making more than $250K are not going to turn that money into jobs. Not in the numbers we need.

We need the revenue.

We need the revenue.

There you go again, Russell, talking as if the government is us.

I mean, I like to think so myself, but I wonder whether Marty's "Rep friends" would agree.

--TP

I entirely agree that the cuts should be allowed to expire (I'll gladly pay the extra $90 a month, and I make around the median income). I'd rather a bunch of the extra revenue went to a massive stimulus, but I'd be fine with it going to reduce the deficit instead.

There are two reason that letting the tax cuts expire would be a political hit for the Dems rather than the Repubs:

1) The Dems currently control the House, The Presidency and the Senate, and few people understand the filibuster, so everything that happens currently happens on the Democrat's watch and is their responsibility in the public imagination.

2a) The reason the tax cuts are designed to expire was so the Repubs could pass them using reconciliation back in 2001, because they didn't have Dem support. So the reason they expire now is because the Dems voted against them then. The Repubs would have supported permanent tax cuts then if the Dems hadn't tried to block them. So the expiration of the tax cuts is something the Dems are responsible for.

2b) This is much like how the fact that congress hasn't passed ENDA is the fault of the senators who oppose ENDA, not the fault of the senators who refuse to support ENDA that doesn't include gender identity. If you reject a bill because it is too weak, generally the supporters of a strong bill won't fault you for it. So if Repubs vote against a tax cut because they are demanding a bigger tax cut, people who support tax cuts will not be angry with the Repubs. Even if this means no tax cut, people (and particularly conservatives) generally support standing up for what you believe in, even if it doesn't succeed, so it is better to demand tax cuts for the rich and not get tax cuts for anyone than it is to give in on tax cuts for the rich.

2c) If the tax cuts expire now, the House Republicans will bring giant tax cuts to a vote next year, allowing the Repubs to vote for giant tax cuts, and forcing Dems to vote against giant tax cuts. This will erase the image of Repubs blocking tax cuts right now.

Obviously, the Democratic members of Congress need a counterattack....is there a reason they cannot shamelessly use reconciliation just like the Goppers did in 2001?

Or maybe they should out tax cut the Goppers: Introduce gigantic tax cuts for everybody, hell, repeal them all. Attach a rider to the bill allowing the government to not have to "fund" its spending with treasuries, thus eliminating the charade of "raising the debt ceiling" all the time. And have the Treasury stop selling treasuries.

Sit back and see what happens.

Right now, they are in a political bind...of their own making.

Isn't that obvious?

Nope. I mean, they are politicians, just like the republicans. I'm sure if they really were in the driver seat as you imagine they are, they would take the wheel. Of course, you may feel that all those democratic pols are just plain stupider than republicans, but all evidence points to the actual reverse case.

The real problem is this: A lot of those allegedly "socialist" democrats actually believe the fiscal nonsense spouted by the republicans (Evan Bayh, which see), and their political savvy is not enough to overcome their economic ignorance.

So you have a situation where a lot of Democrats share the economic lunacy of the Goppers, but cannot find a way to turn this to their political advantage.

Whudda' surprise.

Even if it is tongue-in-cheek, proposing hyper tax cuts to expose GOP lunacy would not work because a significant number of GOPsters openly wants the federal income tax and all corporate taxes abolished (the latter currently approaching status of official GOP policy).
What about poisoning the Bush-extension bill instead with DADT repeal, Card check for unionization and some other assorted goodies? ;-)

We should have been hearing this argument since last January !
That we haven't is another sigh of the Demos incompetence in propaganda.

What about poisoning the Bush-extension bill instead with DADT repeal, Card check for unionization and some other assorted goodies? ;-)

Fine by me. Now find a majority of dems who would take such a stand, esp. wrt card check--which, if you have not noticed, has apparently sunk to the bottom of the priorities list.

;-)(ha, ha?)

From Steve Benen, regarding the expiration date on the Bush budget demolishing tax cuts.

Like the Taliban and al Qaeda, Republicans planted gigantic IEDs all over the place.

Democrats and President Obama, the idiots, need a surge, which should include tactical nukes.

Assange is more American than Republican politicians. The wrong guy is about to be arrested.

"But the policy apparently isn't going anywhere. The Bush White House included an expiration date on its own plan, which helped obscure the policy's cost, but under the assumption that by 2010, policymakers would just keep their policy going. Howard Kurtz noted yesterday that Bushies feel as if they set a "trap" that worked.

"We knew that, politically, once you get it into law, it becomes almost impossible to remove it," says Dan Bartlett, Bush's former communications director. "That's not a bad legacy. The fact that we were able to lay the trap does feel pretty good, to tell you the truth."

This attitude is apparently not uncommon. Former White House Chief of Staff Andy Card made comments similar to Bartlett's, and Karl Rove boasted that "we've known this was going to be happening for a decade."

Kurtz sees this as a well-executed plan. The "sunset" provision that would cause the rates to expire served as "a political time bomb: At some point in the way distant future, Democrats could be accused of raising taxes if they tried to undo the Bush breaks and return to Clinton-era levels of taxation."

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