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Tilting at Windmills

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July 19, 2010

GOP BLASTS DEMS FOR STICKING TO A REPUBLICAN PLAN.... As bad as the Republicans' "Tax Fairy" nonsense is, the notion that a "Democrat [sic] tax hike" is on the way is every bit as absurd, and arguably even more dishonest.

Chances are, you haven't heard about a Democratic plan to raise taxes on "every" American -- including those in the middle class -- probably because such a proposal doesn't exist. But Republicans, including Rep. Dave Camp (R-Mich.), the ranking member on the House Ways and Means Committee, is pushing nonsense in the hopes voters won't look too closely and notice his shameless dishonesty.

The pitch is simple: if the massive, reckless Bush tax cuts expire as planned, taxpayers will go back to the rates they paid in the 1990s (when the economy was strong and the deficit was nonexistent). Since Democrats don't plan to maintain Bush's failed tax policies, Republicans are arguing that Dems are necessarily planning to raise everyone's taxes.

There are, of course, two problems here. The first is that Democrats plan to keep some, and perhaps even all, of the existing tax rates, a detail the GOP is pretending to ignore. The second is that Democrats, if they were to allow the lower rates to expire, would simply be following the policies set out by Republicans. Ezra Klein had a good item on this today.

To understand what's going on here, you need to go back 10 years to the passage of the Bush tax cuts. In order to maximize the size of the cuts, Republicans had to minimize the influence of minority Democrats on the package. So they chose to run the bill through the reconciliation process.

But that posed some challenges. Budget reconciliation had never been used to increase the deficit. In fact, it specifically existed to decrease the deficit. That's why one of its rules was that you couldn't use it to increase the deficit outside the budget window. Republicans realized they could take that very literally: The budget window was 10 years. So if the tax cuts expired after 10 years, they wouldn't increase the deficit outside the budget window. They'd also have the added benefit of appearing less costly in the Congressional Budget Office's estimates, as the CBO duly scored them as expiring after 10 years, which kept the long-range budget picture from exploding.

Exactly. Republicans couldn't address their cuts through honest budgeting, so they played a game -- claiming the cuts would expire, obscuring their cost, and making them eligible for an up-or-down vote. The GOP could have done their due diligence, and found a way to pay for their own policies -- in other words, they could have acted like Democrats who've paid for their major policy initiatives -- but they refused.

Legislatively, it worked; the cuts passed. Economically, it failed -- the robust growth never materialized; job growth was abysmal; and the deficit soared.

So, faced with a budget mess created by Republicans a decade later, Democrats are inclined to follow the Republican policy -- let some of the cuts expire, eventually, just as the GOP's law mandated. This, in turn, will help lower the deficit, which the GOP pretends to care about. Republicans are screaming bloody murder about a "tax increase," but in reality, Democrats aren't raising taxes, so much as they're executing the Republicans' plan and allowing the lower rates on the wealthy to revert back to 1990s levels.

In effect, the GOP is whining incessantly about Democrats following the Republican script too closely. The GOP shouldn't complain -- this was their idea.

Steve Benen 1:30 PM Permalink | Trackbacks | Comments (25)

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The GOP shouldn't complain -- this was their idea.

Yes, but they assumed everybody knew they were lying when they said they would let the cuts expire. What's the matter with people?

Posted by: jonas on July 19, 2010 at 1:41 PM | PERMALINK

My favorite thing is in 2003, Olympia Snowe and George Voinovich made a big show about how they "cut" Bush's proposal from $600+ billion to only $350 billion in tax cuts and that is what got their votes for the budget resolution. That whole exercise was transparently dishonest, cost way more than that, but Olympia Snowe has never been challenged for enabling the worst of the Bush excesses. She covered it up by voting against the final package, when her vote wasn't needed, but for every important step when she could have stopped it, she enabled Bush.

Posted by: Captain Spaulding on July 19, 2010 at 1:48 PM | PERMALINK

This was their plan from the beginning.
Step 1) Pass tax cuts that would expire after Bush was out of office.
Step 2) Blame Dems for 'raising taxes'.
Step 3) Shout Socialism!

Posted by: Gridlock on July 19, 2010 at 1:49 PM | PERMALINK

Every time I see someone with the bumper sticker that says "Raise My Taxes. Lose My Vote." I want to run their SUV off the road. And I want it to burst into flames while "Back In Black" throbs on the stereo.

What we have to do in the long run — and it won't be easy — is somehow rebrand the act of paying taxes as something of a patriotic duty. People need to be reminded what their tax dollars actually accomplish. [It would help if we weren't paying so many invisible dollars to the military and intelligence communities, etc.]

In this way we can redefine anti-tax conservatives as patently un-American. It can be done. Look at how easy it was to brand those of us pushing diplomacy over war in Iraq as unpatriotic.

Posted by: chrenson on July 19, 2010 at 1:51 PM | PERMALINK

... Rep. Dave Camp (R-Mich.), the ranking member on the House Ways and Means Committee, is pushing nonsense in the hopes voters won't look too closely and notice his shameless dishonesty.

Shameless dishonesty, of course. But the fact is the Dems will lose this rhetorical gambit as they lose all of them. Why WHY! can't the Dems see these things coming and get ahead of the curve for once?

Posted by: Jack Lindahl on July 19, 2010 at 1:54 PM | PERMALINK

Can the Democrats change the tax law to insulate low and moderate income from changing back to the old rates or will Republicans filibuster that on the theory that if all of the cuts are not extended then none will be?

Posted by: CarlP on July 19, 2010 at 1:58 PM | PERMALINK

I know it won't help because of our "liberal" media but is there a way to have the CBO score the deficit impact of keeping the bush tax cuts in place? If Dems could repeat endlessly that keeping the tax cuts in place adds x amount to the deficit maybe it would sink in with a few people.

Posted by: Cal on July 19, 2010 at 2:00 PM | PERMALINK

"The GOP shouldn't complain -- this was their idea."

That's why they think it's a bad idea. It was their idea, and name the last good one they had?

Posted by: c u n d gulag on July 19, 2010 at 2:01 PM | PERMALINK

Why will Democrats lose this rhetorical gambit? I am not sure they will, but if they do the fact that every single talking head you see on your television machine makes more than $200,000 -- $250,000 per year might have something to do with it. Every single one of the Villager talking heads will see his or her taxes go up next year. Since they assume everybody is just like them, they assume every one of us will see a tax increase. Republicans who claim Obama is raising taxes on everybody are't lying, they are telling the truth in the Village. They just don't understand that their little world isn't much larger than Seseme Street, and that is the word on the street.

Posted by: Ron Byers on July 19, 2010 at 2:03 PM | PERMALINK

To be vaguely fair to the Republicans - in 2001, they had this idea that they were at the genesis of what would be the "permanent Rupublican majority" (yes, they've always been delusional) - so the whole thing with the tax cuts was get it done temporarily via reconciliation, and then make the cuts permanent once they had the votes. It was supposed to be all part of Bush's 2004 "Mandate" and the push to make the cuts permanent was supposed to happen beginning when Congress returned from Labor Day weekend in 2005.
Only Katrina hit that weekend and the vote eneded up getting postponed - would seem unseemly to give the rich permanent tax breaks in the midst of huge national disaster. Funny how that worked out.

Posted by: andy on July 19, 2010 at 2:05 PM | PERMALINK

Carl P, continuing the middle and lower class tax cuts is part of the Democratic plan. My guess is those cuts will be held hostage by the Republicans. If their homeies don't get their cuts why should anybody else?

Posted by: Ron Byers on July 19, 2010 at 2:15 PM | PERMALINK

OK, clearly, asking for the Republicans to be honest on this is way too much. Here's what strikes me: The hoo-ha over the deficit is that our "profligate" ways will be punished by the market through the mechanism of rising interest rates. Inconveniently for those looking to cut social insurance under the guise of deficit reduction, the markets are not in fact punishing us. The US can borrow money at, quite frankly, obscenely low rates right now.

Ah, say the believers in the invisible bond vigilantes, but that's -short-term-. If we don't fix our -long-term- deficit problem, we'll eventually get screwed when the market stops being (what they -must- insist is) irrational. Now, that's going to happen when the market decides that we -can't- handle our future obligations. What would tip them off?

Well, how about the United States adopting a vast tax cut on the allegation that it will expire but then ignoring that and allowing it to persist? In other words, extending the Bush cuts is a big finger offered to anyone who takes the US government at its word when preparing budget impact estimates. It would legitimatize the nudge-nudge, wink-wink nature of the original deal: "We'll -say- we're going to return to the old tax rates in 10 years, but no one actually -intends- to."

Put another way: Allowing the Republicans to prevail in this would in fact directly undermine the US economy by robbing it of reliability. These guys couldn't do more damage to the country if they were -trying- to!

Posted by: Bernard Gilroy on July 19, 2010 at 2:21 PM | PERMALINK

Somebody should run my head over with a truck and shove me into a public men's room and force me to "wide stance" a strange black man while watching a priest molest a little white boy. Only then will I ever understand how so many knuckledragging inbreds could vote republican.

Posted by: smarter than a Palin baby on July 19, 2010 at 2:23 PM | PERMALINK

What we have to do in the long run -- and it won't be easy -- is somehow rebrand the act of paying taxes as something of a patriotic duty. People need to be reminded what their tax dollars actually accomplish.

Too bad we don't have celebrities like Carole Lombard anymore:

"Every cent anybody pays in tax is spent to benefit him. There's no better place to spend it. I enjoy this country and I really think I get my money's worth."

Posted by: Mnemosyne on July 19, 2010 at 2:56 PM | PERMALINK

is there a way to have the CBO score the deficit impact of keeping the bush tax cuts in place?

CBO has already done so.

Here is some of what was said by CBO director:

The budget outlook is much bleaker under the alternative fiscal scenario, which incorporates several changes to current law that are widely expected to occur...under the alternative scenario, spending on activities other than the major mandatory health care programs, Social Security, and interest would fall below the average level of the past 40 years relative to GDP, though not as low as under the extended-baseline scenario.

More important, CBO assumed for this scenario that most of the provisions of the 2001 and 2003 tax cuts would be extended...

Under that combination of policy assumptions, federal debt would grow much more rapidly than under the extended-baseline scenario...debt would reach 87 percent of GDP by 2020, CBO projects. After that, the growing imbalance between revenues and noninterest spending, combined with spiraling interest payments, would swiftly push debt to unsustainable levels. Debt as a share of GDP would exceed its historical peak of 109 percent by 2025 and would reach 185 percent in 2035.

Posted by: Gridlock on July 19, 2010 at 3:01 PM | PERMALINK

So write a bill whose preamble denounces Bush & the republicans for expanding the deficit,and which extends the Bush tax cuts, but also covers abortions via health insurance and in health care for the military, repeals Don't Ask, Don't Tell, legalizes gay marriage, imposes some regulations on the energy extraction and financial industries, and funds a study to investigate the possibilities of a single world government, and then when the Republicans and blue dogs block it scream bloody murder about conservatives raising everyone's taxes. :) OK that's extreme, but seriously, go with a partial extension, but link it with some of the stuff that we want but they'll have to swallow, and beat them up a bit by arguing that Dems are trying to fight a tax increase planned and passed by the Republicans.

Posted by: N.Wells on July 19, 2010 at 3:05 PM | PERMALINK

the notion that a "Democrat [sic] tax hike" is on the way is every bit as absurd, and arguably even more dishonest.

As I've said before -- and it's good to see Klein noting the fact, as unlike me he's potentially influential -- if letting the tax cuts sunset is tantamount to a tak increase, it's a tax increase passed by Republicans and signed into law by George W. Bush.

It's a pity Democratic messaging sucks.

pushing nonsense in the hopes [strike]voters[/strike] the so-called"liberal media" won't look too closely and notice his shameless dishonesty.

Fixed. Sadly, for dishonest Republicans -- but I repeat myself -- like Camp, that's a good bet.

Economically, it failed -- the robust growth never materialized; job growth was abysmal; and the deficit soared.

And what economic growth we did have was attributable to Greenspan holding the monetary pedal to the metal, thus engendering the real estate bubble into the bargain.

Posted by: Gregroy on July 19, 2010 at 3:15 PM | PERMALINK

That's me @ 3:15 pm.

Posted by: Gregory on July 19, 2010 at 3:16 PM | PERMALINK

I think I understand.

Reconciliation used during retardlican rule is perfectly OK.

But if the D's use it, it's a scandalous usurpation of power used to ram the socialist agenda down our throats. (No Homo)

Posted by: RP on July 19, 2010 at 3:21 PM | PERMALINK

Taxes were cut drastically for 8 years and the economy tanked thanks to encouraging greedy selfish stupidity.

Let's try raising taxes and see if that provokes any sign of intelligent conservative behavior by rich people when reminded they don't deserve a free ride -- at least, not a free ride longer than the eight years now expiring.

Posted by: Hank Roberts on July 19, 2010 at 3:41 PM | PERMALINK

Ever wonder why headlines NEVER say "Democrats BLAST Republicans?"

Is Blast and bombast all they got?

Posted by: jjm on July 19, 2010 at 3:59 PM | PERMALINK

The Bush tax cuts for the rich.... We couldn't afford them then and we can't afford them now. That's way I have asked Congress to do the right thing for the country and allow the cuts to expire so we can begin to get our debt under control.

BHO

Posted by: sceptic on July 19, 2010 at 4:24 PM | PERMALINK

And don't forget, as part of the Republican's sleight of hand in 2001 with their massive budget-busting tax cuts, they also included one-time payments of $300.00 to U.S. taxpayers, or $600.00 per couple. Whoopee.

While the Bush tax cuts keep on giving and giving and giving huge profits to the wealthy, year after year after year, everyone else got that one-time rebate from the federal government. Remember? It was just another right-wing sucker play, like all their right-wing sucker plays that have done so much damage to our democracy.

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