I just saw Ed Shultz argue that if the President just allowed all of the Bush tax cuts to expire, Congress could just come back next year and negotiate a new middle-class tax cut. That's either a delusion of his, or he's deliberately misleading viewers just to make like he's tougher or smarter than the President; or, to have something to shout about.
There is ZERO chance of republicans, in this Congress or the next republican-House-hobbled one, allowing a middle-class tax cut to pass cloture and advance into law on its own. All republicans care about in this debate is finding a way to point to the President and say that he's raised taxes. They don't care if the cuts expire, they just want to bash the President in this election year for 'raising taxes'. The only thing they'd like better than allowing some portion of their rich buddies' tax cuts to survive is to have a political issue to run with. He can holler, stamp his feet, point his fingers, whatever . . . republicans are comfortable with any of that because they don't have to lift a finger to suit their own political purposes.
I believe that, if they could, they'd craft a bill that would force a veto out of the President just so he could be seen as ending tax breaks for, not only the rich, but, for the millions of middle-class taxpayers affected. These republicans have NEVER shown any interest in at all in the middle-class. Claiming that there's some possible way that the next Congress would produce a better tax package than any negotiated now is an amazing omission of the glaring fact of a pending republican-dominated House which will do nothing but send doa legislation to the Democratic Senate, daring them to vote against it and daring the President to oppose them so they can put it in a campaign commercial somewhere. There will be ZERO chance for a free-standing, middle-class tax cut in the next Congress, so Ed Schultz can't credibly use that as an argument against negotiating a compromise now.
The other dishonesty on the tax cuts is in the way the President's motivations are characterized by critics on the left. President Obama is fighting for middle-class tax cuts. That's the first and most significant part of what he's said on the extension of the Bush tax cuts.
The second thing he's asserted is that the nation can't afford a permanent extension of the upper-class tax cuts.
from his radio address at the beginning of the month:
http://www.whitehouse.gov/the-press-office/2010/11/06/weekly-address-president-obama-calls-compromise-and-explains-his-prioritPRESIDENT: ". . . the last thing we should do is raise taxes on middle-class families. For the past decade, they saw their costs rise, their incomes fall, and too many jobs go overseas. They’re the ones bearing the brunt of the recession. They’re the ones having trouble making ends meet. They are the ones who need relief right now.
So something’s got to be done. And I believe there’s room for us to compromise and get it done together.
Let’s start where we agree. All of us want certainty for middle-class Americans. None of us want them to wake up on January 1st with a higher tax bill. That’s why I believe we should permanently extend the Bush tax cuts for all families making less than $250,000 a year. That’s 98 percent of the American people . . .
I recognize that both parties are going to have to work together and compromise to get something done here. But I want to make my priorities clear from the start. One: middle class families need permanent tax relief. And two: I believe we can’t afford to borrow and spend another $700 billion on permanent tax cuts for millionaires and billionaires.This Congress is going to act on the tax cuts, no matter what President Obama does. That's not something the President has much control over at all. It's not hard to envision this Senate (and even more, the next) holding up anything the lame-duck House manages to pass to advantage their upper-class cuts. It's also not hard to imagine enough Democrats in the Senate letting them. There are already a few on record in favor of some extension of the upper-class tax cuts.
If he does agree to a temporary extension of the upper-class tax cuts as part of a deal to get an extension for middle-class tax cuts that won't be a capitulation or proof that he wants to give a break to millionaires - it will be a compromise to preserve those middle-class tax rates that he says are his first priority.
He has his veto pen and could certainly veto any compromise the Senate sends him, but he'd be working against what he said earlier this month is his 'number-one priority' of permanently maintaining the extension for the middle-class if he vetoes such a deal and allows them both to expire. He'll not have much leverage in this debate other than that veto; and that would likely to be overturned anyway by the vast majority of legislators who will not allow taxes to be raised by their votes anytime soon.
Further, White House negotiators are pushing to include several 'Obama tax cuts' as part of any compromise and there's a good chance that will happen. Even the two Democratic tax bills voted on in the Senate today contained some of those tax cuts and incentives. Among them: (
http://blogs.abcnews.com/politicalpunch/2010/12/administration-pushing-to-add-the-obama-tax-cuts-to-the-bush-tax-cut-negotiations.html)
* The Alternative Minimum Tax;
* The Making Work Pay Tax Cut – this is the “invisible payroll deduction” – the part of the stimulus bill everyone said the White House should have just written big checks for;
* The American Opportunity Tax Credit (higher education tax credit);
* The Earned Income Tax Credit;
* Extenders for the Research & Experimentation tax credit;
* Bonus depreciation (expensing) – this doesn’t expire but the White House thinks it’s good for the economy;
* The HIRE Act – a tax credit for hiring people;
* Build America Bonds, which changes the tax treatment for municipal and state financing, allowing them to raise money for projects; and
* Energy tax credits (solar and wind energy tax credits are set to expire).
“Over two years these provisions will have nine times the economic impact as the high end Bush tax cuts,” a White House official said of the Obama tax initiatives.
The President's commitment to lowering middle-class tax rates over the objections of republicans has already been demonstrated in an historic way in the passage of his stimulus bill that republicans are angling to dismantle.
from PolitiFact:
http://www.politifact.com/truth-o-meter/statements/2010/jan/28/barack-obama/tax-cut-95-percent-stimulus-made-it-soPRESIDENT: "We cut taxes. We cut taxes for 95 percent of working families. We cut taxes for small businesses. We cut taxes for first-time homebuyers. We cut taxes for parents trying to care for their children. We cut taxes for 8 million Americans paying for college."
____ The tax cut was part of Obama's campaign promises. During the campaign, Obama said he wanted $500 for each worker and $1,000 for working couples . . . During the campaign, the independent Tax Policy Center researched how Obama's tax proposals would affect workers. It concluded 94.3 percent of workers would receive a tax cut under Obama's plan based on the tax credit to offset payroll taxes. According to the analysis, the people who wouldn't get a tax cut are those who make more than $250,000 for couples or $200,000 for a single person. ____
President Obama is fighting for an extension of the Bush-era middle class tax cuts to fulfill his campaign promise to prevent any increase of middle class taxes during his term. He's facing a lame-duck legislature that doesn't have enough votes to pass either the upper-class tax cut or the middle-class tax cut extension on their own. That political equation is just going to get worse in the next Congress.
To allow them both to expire (by inaction or by veto) would, in effect, increase the tax burden on the middle class. It's one thing to argue that we could do without both (as some have), but it's another thing entirely to frame the acceptance of an extension of the upper-class cuts in exchange for an extension of the middle-class cuts as some capitulation. The fact is, the President is fighting for those middle-class tax cuts. That's why he's negotiating. That's why he's taking the heat from critics in his own party and pressing forward, nonetheless.
The President is fighting for an extension of the middle class tax portion of the Bush tax cuts. The republicans are fighting to preserve the Bush cuts in some form or fashion; or, they'll settle for the political result of the President and the party walking away and just letting all of the tax cuts expire. That's not going to happen because the President is committed to ensuring that the middle-class tax cuts survive this Congress. He certainly knows he won't get a thing he wants on taxes from the next one.
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