Editore"s Note
Tilting at Windmills

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November 9, 2010

DEMS STILL HAVE BIG MAJORITIES FOR THE LAME-DUCK SESSION.... President Obama has already offered congressional Republicans a deal on taxes that gives them nearly everything they want: a permanent reduction in rates for the middle class, and a temporary extension of Bush-era rates for the wealthy. The Hill reports the offer, and the very idea of separating tax deals for the rich and everyone else, appears to be "dead."

The Obama administration's hopes of reaching a tax deal with Republicans that would decouple rates on the rich from the middle class appear dead.

House GOP Whip Eric Cantor (Va.) threw cold water on the proposed plan, which would temporarily extend tax cuts for the wealthy while permanently extending tax cuts for the middle class. "Taxes shouldn't be going up on anybody right now," Cantor said.

Cantor's comments Monday evening on Fox News follow similar remarks from Sen. Orrin Hatch (R-Utah), the incoming senior Republican on the Senate's tax-writing committee. While Hatch expressed an open mind to extending tax cuts past the 2012 election rather than permanently extending the rates, he also ruled out the decoupling proposal.

Remember a couple of months ago, when congressional Democrats had the option of dealing with this before adjournment? When they could have passed a middle-class tax-cut package before Election Day? When polls showed the public supporting the Democratic position over the GOP's? When Dems decided it'd be better to wait?

I couldn't figure out what they were thinking at the time. Now, the decision looks even worse.

But reading the report in The Hill, it occurred to me that Cantor and other Republicans are barking orders, declaring proposals dead, as if they were in the majority. So perhaps now would be a good time to point a minor detail: Bush-era tax rates expire at the end of the year, and between now and then, there's a large Democratic majority in both chambers.

Cantor is refusing to consider the White House's compromise offer? Fine. Given that Cantor is still in the minority, it's not really up to him to decide -- at least not until next year.

It seems to me Democrats can get out of their defensive crouch and tell the GOP what's going to happen -- there will be a vote on a tax-cut package, and it will feature a permanent cut in middle-class tax rates, and a temporary extension of rates for the wealthy. They can either vote for it or against it. If Senate Republicans refuse to allow the chamber to consider the package, they will have killed the only opportunity available to keep Bush-era tax rates alive, and will be responsible for bringing back Clinton-era rates for everyone.

Much of the GOP's posturing is about playing for the cameras -- if they refuse to compromise and Dems cave, Republicans get what they want. If they refuse to compromise and all of the tax rates expire on schedule, Republicans get the talking point they want ("Dems raised taxes").

With that in mind, Dems aren't playing the game well. After multiple efforts at offering concessions, there's no reason Democrats can't simply put a reasonable compromise on the table and tell Republicans to take it or leave it. Start trying to turn the tables and put the onus on the party that's hold middle-class tax cuts hostage.

The GOP won a House majority last week, but it won't take effect until the new year. There's no reason for Dems to forget they're still in charge.

Steve Benen 12:35 PM Permalink | Trackbacks | Comments (49)

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It seems to me Democrats can get out of their defensive crouch and tell the GOP what's going to happen -- there will be a vote on a tax-cut package, and it will feature a permanent cut in middle-class tax rates, and a temporary extension of rates for the wealthy.

Why should they do that Steve? I am still puzzled as to why Dems should be offering Republicans anything at all. If they want to create a bill extending the middle class tax cuts then fine. I don't see it as the best option but I don't have particularly strong feeling about it. But what advantage, political or fiscal, is there to extending the tax cuts for the rich, temporary or otherwise. Let them vote against a middle class tax cut or let the tax cuts expire. Either way, its the GOP that will have to own the tax increase. Why give them anything? I really don't get it.

Posted by: brent on November 9, 2010 at 12:39 PM | PERMALINK

Personally, I get real damn tired of The Obomination and the dumbocraps compromising every damn thing AND THEN starting negotiations where they compromise more!

Let ALL of the tax cuts expire! 3+ Trillion $$$ or 4 Trillion $$$??? Either adds more to our national debt. To bad there are not any dumbocraps with the stones to fight the rethugs.

Maybe Bernie Sanders will filibuster extending the tax cuts! Maybe Russ Feingold (who has absolutely nothing to lose) will filibuster extending the tax cuts and show the idiots of Wisconsin that he is the 'real fiscal conservative'!

Posted by: AngryOldVet on November 9, 2010 at 12:42 PM | PERMALINK

Amen. This is such a simple observation that it's unbelievable that the Dems can't see it. Lame duck will be the last chance to pass significant legislation. Dems could go out fighting or they can whimper off the stage. That goes for the Bush tax cuts, DADT, and even an energy bill, which the House has already passed. They have nothing to lose now, the worst has already happened. Stand up and fight.

Posted by: a on November 9, 2010 at 12:43 PM | PERMALINK

The lame duck session will be eager to display how much they value bipartisan cooperation.

Posted by: maverratick on November 9, 2010 at 12:44 PM | PERMALINK

Maybe Bernie Sanders will filibuster extending the tax cuts! Maybe Russ Feingold (who has absolutely nothing to lose) will filibuster extending the tax cuts and show the idiots of Wisconsin that he is the 'real fiscal conservative'!

I really don't understand what I am missing here. Sanders and Feingold don't need to filibuster anything because in either this session or the next, it will be the Democrats that draft any Senate legislation. As we found out in this last session, the Senate doesn't have to do anything with the House bills if they do not want. So again, why even create a bill that offers an extension of cuts for the rich. Either create the bill with just cuts for the middle class or let all the cuts expire. Either way, it is Republicans who will have to vote against a tax cut if they don't like it. Can someone explain to me why they feel any need to compromise on this at all? Have I just taken too many stupid pills and ended up missing something super obvious? I don't get it.

Posted by: brent on November 9, 2010 at 12:50 PM | PERMALINK

you've got the damn majority...use it!!!
bunch of wimps

Posted by: tony on November 9, 2010 at 12:56 PM | PERMALINK

The Dumbocrats may be in the majority but that doesn't mean, nor has it meant, that they are 'in charge'. The corporations are in charge. And the millionaire 'journalists' that the media has hired to do their bidding is in charge. The corporations will not be happy until medicare/ medicaid is gone, that whatever is left of 'social security' is nothing more than an investment opportunity for Wall Street, and every social program that benefits anyone is completely removed. They desire a country of indentured servants who are left to their own devices in order to survive.

Posted by: stormskies on November 9, 2010 at 12:58 PM | PERMALINK

Dems never were in charge.

Posted by: Bat of Moon on November 9, 2010 at 1:00 PM | PERMALINK

Absolutely agree with you that the Dems aren't playing the game well. They hold the cards and shouldn't be apologetic about it. It kills me when Dems act this way.

Posted by: tomb on November 9, 2010 at 1:01 PM | PERMALINK

Turn it over on the repubs. Use reconciliation to push through extending the cuts for those making under $250k, and allow the others to expire.

Posted by: Stetson Kennedy on November 9, 2010 at 1:04 PM | PERMALINK

I will pay the taxes in 2011 and 2012, I want the issue going into 2012 election.
This is a WIN/WIN for D's running next cycle.
Either you get (a) the tax cuts for "the rest of us", (b) it expires and helps balance the budget and we get to hammer Rs on raising taxes on the middle class

Posted by: Joyzeeboy on November 9, 2010 at 1:05 PM | PERMALINK

Well, since the Democrats blew the opportunity to take advantage of this issue pre-election, I see no reason to believe that they will suddenly turn their brains on now.

Besides, why fix the tax code when you can steal people's Social Security. Bring on the Catfood Commission and don't let the perfect be the enemy of the good!

Posted by: square1 on November 9, 2010 at 1:06 PM | PERMALINK

I think the simplest explanation is that the Democrats want the same policies as the Republicans. Democrats are just lying to their base.

Posted by: Ex-Democrat on November 9, 2010 at 1:08 PM | PERMALINK

Can someone please tell the Democrats "It gets better"? *

Jeez Louise. You lost half of the Legislative branch. You still have the other half, plus the Executive. You went from 3 out of 3, to 2 out of 3! It's not that bad!

*(apologies if you think I'm belittling the abuse gay teens suffer)

Posted by: anonyous on November 9, 2010 at 1:08 PM | PERMALINK

Echoing the above, why should the Dems keep negotiating with themselves?

Tell the Repubs it is going to be ending the tax break for the rich or nothing. There is NO reason to extend the upper bracket break.

Posted by: martin on November 9, 2010 at 1:11 PM | PERMALINK

"With that in mind, Dems aren't playing the game well."

This is why Dem voters stay home on election day. If they ever want to change that, they'd better get their defense off the field and put their offense in.

Posted by: Chris on November 9, 2010 at 1:12 PM | PERMALINK

The Lame Duck Session would be the perfect time to get the tax cuts Obama wants by RECONCILIATION - the same way Bush got the tax cuts he wanted.

Posted by: bcinaz on November 9, 2010 at 1:14 PM | PERMALINK

I think it's time we put to bed this notion that the Democrats want to let the top marginal rate expire. They have to pretend as much to satisfy the base (like the Republicans have to pretend they care about abortion), but there's no proof that they're at all interested in getting it done. Did anyone in the leadership offer a remotely coherent explanation for why they didn't move this before the election? No. The reason: they couldn't admit they didn't have the votes, or the base would've been further demoralized. When you spend all your time in the company of rich people, raising taxes on rich people becomes a decidedly less attractive option.

Posted by: Dan on November 9, 2010 at 1:14 PM | PERMALINK

The optimist in me says that the Dems are giving the Repubs enough rope to hang themselves. The pessimist in me says that Ex-Democrat is right and they really want to extend the Bush rates.

The realist in me says that they are confused and clueless and that I've spent more time analyzing the issue than most members of Congress have.

Posted by: danimal on November 9, 2010 at 1:16 PM | PERMALINK

"I couldn't figure out what they were thinking at the time. "

Nor I. Frankly, it's just more of Democrats being pussillanimous. And, now, they will get all righteous and point out they were losers and should respect the voters' choices.

Never mind that Republicans have ignored the will of the voters for the past 2 years.

Posted by: AlphaLiberal on November 9, 2010 at 1:16 PM | PERMALINK

let them all expire, and the "blame" goes to republicans.

Posted by: Andrew in Berkeley on November 9, 2010 at 1:19 PM | PERMALINK

Boy
This sure validates the idea of passing Tax l;egislation BEFORE the election
Pelosi pushed it, the Admin did nothing
The Same with DADT
If you couldn't get it through a Democratic Congress, how will you get it through now?
But, the Obama DOJ appealed the DADT strike down because he wanted an 'orderly' repeal of DADT

True Genius, huh ?

Posted by: Frisco on November 9, 2010 at 1:22 PM | PERMALINK

Yes, they could exert the will of the Congressional and national majority--but then they might make Little Baby Jesus, er, David Broder, cry, and Sally Quinn would never invite them to her salon.

Posted by: Steve Paradis on November 9, 2010 at 1:23 PM | PERMALINK

"I couldn't figure out what they were thinking at the time. Now, the decision looks even worse."

You really show no quarter to your beloved moderates do you? The Democratic mainstream is often no more comprehensible than the right. Maybe they have been dancing together for too long.

Posted by: Michael7843853 on November 9, 2010 at 1:27 PM | PERMALINK

Steve, what available evidence do you have that the Obama Administration and the Democratic leadership are going to do anything but what their Republican masters will allow them to do. This whole "compromise" illustrates the problem with Democrats, at least the leadership: they simply don't seem to actually believe in liberalism and liberal policies. That or they are simply too weak kneed to actually argue in their favor. They simply accept conservatism as the dominant political philosophy and never even try to change that dynamic. This is also, in a nut shell, my problem with Obama. He seems more comfortable accepting and voicing conservative narratives than voicing liberal narratives. I mean, just last Sunday, he acknowledged that HCR was really a Republican plan, and, of course, he is right. He talks more favorably about Reagan than just about any Democrat I can think of. And, frankly, I put you and the Drum/Yglesias wing of the blogosphere squarely in the court that make these weak kneed responses more likely by telling any of us who voiced a desire for far more aggressive tactics and who didn't want to settle for the thin gruel that we were being fed to stop being naive and shut up and be happy for the thin gruel. We were shouted down by the Obama defenders and told to grow up, shut up, and get drug tested.

Not that it was that ballsy a prediction, but I called this. And mark my words, Obama will continue to back down and the rest of the Democrats with him. And the Republicans know that the Democrats and Obama will continue to back down. That is why they are flatly saying that there will be no compromise. And they will be right, because the Democrats will offer capitulation after capitulation. Once this capitulation is complete it will be on to Social Security "compromises" as well.

Pathetic. Pathetic. Pathetic. That is all I can say.

Posted by: Vince on November 9, 2010 at 1:29 PM | PERMALINK

I have to say that I am also on the "let them all expire" train. There's a lot of stuff that's going to happen between now and 2012, and they Democrats will be flayed alive (verbally) by the Republicans NO MATTER WHAT THEY DO. So do the right thing already. It save $3 trillion over ten years, if I have my figures right.

All the Democrats have to do is produce the deficit reduction numbers and talk about THAT whenever it comes up.

Then they might want to spur a little aggregate demand, ya think?

Anyway, for God's sake, we should not be talking about "extending the Bush tax cuts" AT ALL. Let them expire. Then if we must, pass the Obama Tax Cut (for all taxpayers on marginal income below $250K)!

Posted by: Daddy Love on November 9, 2010 at 1:30 PM | PERMALINK

About who should be blamed for "raising taxes" if the Bush rates expire...I realize that this is going against the rhetorical winds, but it is the _Republicans_ who voted to raise taxes if the Bush tax cuts expire in December. They are the very ones who passed the cuts with an expiration date. They "intended" the cuts to end (admittedly for disingenuous reasons), hence THEY "raised the taxes," not the Democrats.

Posted by: Dr. Cheese in WI on November 9, 2010 at 1:34 PM | PERMALINK

This is why people don't want Democrats running the national security apparatus, who wants wimps in charge of our Defense Department?

Posted by: dualdiagnosis on November 9, 2010 at 1:42 PM | PERMALINK

If the Democratic congressional leadership actually wanted to let the Bush tax cuts expire for the rich and extend them for everyone else they would have done it before the election. Is anyone under the impression that this is something that Democrats -- who unfortunately are suckled by the same corporate and Wall St. cash cows as their Republican brothers -- really want to do such a thing?

Posted by: R. Porrofatto on November 9, 2010 at 1:49 PM | PERMALINK

I'm getting tired of belonging to a political party that doesn't have the courage to fight for what it believes in. Even the possibility that Republicans will falsely accuse them of raising taxes has the spineless Democrats running for the hills. Well I'm drawing a line in the sand. If the Democrats cave on tax cuts for the wealthy I will not vote in 2012.

Posted by: Ron on November 9, 2010 at 2:01 PM | PERMALINK

The GOP designed the tax cuts to expire. Even they thought they were a bad idea at the time, apparently. Now we know they were even worse that originally thought.

cut defense by 20% and you can have your cuts. No, then sorry can't help you much today.

This "problem" (and its a GOP problem, not everyone's) is solved pretty simply -- just do nothing . . . since they act like they own the place now, make the GOP solve the problem they themselves created.

Posted by: consumed on November 9, 2010 at 2:01 PM | PERMALINK

Let them expire and call them the Deficit Reduction Tax Act of 2010.

Posted by: Bob O'Reilly on November 9, 2010 at 2:12 PM | PERMALINK

Now, I am definitely NOT in the camp that there's no difference between Dems and Repubs, but the only thing that makes sense to me is that enough Democrat House members and Senators really _do_ in their heart of hearts (or caucus of caucuses) want to see the tax cuts for the rich expire -- either because they are rich themselves, or have rich friends and donors and corporate sponsors -- but they don't want to be blamed for abandoning their voters. So they'd rather look ineffectual -- and so they ineffectually protest and offer compromises, but leave a clear path to the only possible outcome -- rolling over and letting all the tax cuts expire.

Could they actually just _be_ that ineffectual? Sure, the natural posture of most elected Dems is the cringe. But when they punted before the election, when the politics were so clear-cut and lined up so perfectly with the right thing to do --when it was so obvious to _us_ that most of the people in the country supported letting the tax cuts on the rich expire -- I asked myself why would the Dems be acting in such a _thoroughly_ perverse way..._unless_ it was their intention?

Having said that, I still have hope that gridlock will prevail and _all_ the tax cuts will expire -- which would be fine with me! But in that case, the Dems will, in their usual inept way, allow themselves to be saddled with the blame for raising taxes on the middle class instead of getting the credit for lowering the deficit!

Posted by: Emil France on November 9, 2010 at 2:30 PM | PERMALINK

Granting temporary extension on the tax breaks for the creme-de-la-creme is as stupid as it can get, because there's absolutely no guarantee (possibly the opposite) that the cuts will *remain* temporary after 2012. Much better to let all the cuts expire, as the Republicans had written, originally. They never thought, all those years ago, that the breaks would sunset, because they thought they had a permanent majority, as promised by Rove.

I love Bob O'Reilly's suggestion (@14:12) that allowing the breaks to sunset as scheduled ought to be called "Deficit Reduction Tax Act of 2010." If for no other reason then that the idea of doing nothing and calling it an act appeals to my warped sense of humour and my understanding of how the Congress functions. But also because it'd be along the lines of "you wanted deficit reduction? Here it is and we don't have to move any finger (other than the middle one) to give it to you"

Posted by: exlibra on November 9, 2010 at 2:31 PM | PERMALINK

Wow - nothing like 11-dimensional quantum chess! These guys are so adroit, they have created this illusion of being the most ham-handed incompetents ever to wield executive and legislative power. Almost had me fooled...

Posted by: Katie on November 9, 2010 at 2:33 PM | PERMALINK

Steve wrote: "Start trying to turn the tables and put the onus on the party that's hold middle-class tax cuts hostage."

LOL-- you are talking about the Democrats here!

Posted by: ga73 on November 9, 2010 at 2:44 PM | PERMALINK

No news here. The Republicans still think trickle down economics works, the earth is flat, pigs can fly, etc.

Posted by: max on November 9, 2010 at 2:54 PM | PERMALINK

Again, the gasbag caucus is blathering and being asinine in order to grab headlines. While Rome burns.

But I sincerely hope the tax cuts expire for everyone. Then deficit is reduced, Republicans are responsible for raising taxes, etc.

It's a win win. Especially since our doofus Americans didn't even know that Obama gave them the tax cuts to begin with. How could he and the Dems lose with such a strategy?

Posted by: jjm on November 9, 2010 at 3:11 PM | PERMALINK

I think they should refer to it as the "Bush Republican Tax Increases in 2011 act"

and say - jee - sorry; I guess we cannot compromise. So ... Your bill. Your pile 'o shit. We helpless stupid little democrats are not able to make anything happen, so your bill will simply work its will, as you wrote it.

We will be standing by waiting for ideas, but I guess unless you agree to implmenting the cuts ONLY for ,250 k, we won't be having any votes. Sorry you wrote the bill the way you did.


Posted by: bigtuna on November 9, 2010 at 3:31 PM | PERMALINK

Better yet, why not offer this as a compromise? Obama could announce he's ready and willing to pass permanent tax cuts for the wealthy, just as soon as Republicans in the House pass the legislation cutting spending to pay for it, since they're so concerned about the deficit and all.

Clearly, the Republicans have no idea where they would cut $700 billion, nor any intention of doing so - but the public hasn't yet forgotten that they just won election on a pledge to "cut spending." And on an amount of this size, there's no way to cut that amount without cutting Social Security, Medicare, and/or the military. Anyone want to guess how popular Republicans would be after being forced to show their cards, i.e., what they're willing to sacrifice on behalf of all the rest of us so Paris Hilton can afford another Birken bag or two each year?

Democrats are perpetually politically inept. They could make these bastards own this stuff and sit and stew in it, if any of them had the slightest idea how to play the game.

Posted by: Jennifer on November 9, 2010 at 3:34 PM | PERMALINK

Here's the problem. They would let all of the tax cuts expire. Why? Because such large tax increases for everyone right now would kill an already fragile economy.

And if you think they would be against that, I'd ask if you've been in a coma the last two years.

Posted by: Steve on November 9, 2010 at 4:14 PM | PERMALINK

Wait, why is everyone assuming that the Dems' aim should be to get tax cuts passed? The tax cuts are a terrible idea, just like they were ten years ago, and shouldn't be made permanent for anybody.

The ideal scenario for the the US is not to pass the cuts. The ideal scenario for the Dems is not to pass the cuts but have a plausible argument to the effect that they wanted to but the GOP were too greedy.

So it gives them a talking point; so what? The flip-side is a counter-point and - far more importantly - a policy outcome that benefits the economy and the nation.

Posted by: toro toro on November 9, 2010 at 4:20 PM | PERMALINK

I Just do not understand why the Democrats just call the Republican bluff and let the tax cuts expire as they are supposed, *and* introduce a new bill that calls for slightly different tax cuts which are for everyone from the middle-class on down. Make these different tax cuts a little bigger even, so everyone from the middle-class on down gets 10 dollars more off their taxes. The Republicans don't have the votes to stop the tax cuts from expiring, and they would look like jerks if they stand in the way of new tax cuts. I just don't get it.

Posted by: a on November 9, 2010 at 4:38 PM | PERMALINK

Steve, you're assuming the democrats have the best interest of the people and the country at heart when they are actually thinking about the money they will miss out on if the don't extend the tax cuts for the wealthy. They need the republcans to help shoulder the blame.

Posted by: CDW on November 9, 2010 at 4:48 PM | PERMALINK

They could make these bastards own this stuff and sit and stew in it, if any of them had the slightest idea how to play the game

What you suggest isn't rocket science, and the fact that the Dem leadership, so full of Ivy Leaguers and Rhodes Scholars, isn't doing this should tell you all you need to know.

Posted by: Doctor Whom on November 9, 2010 at 5:25 PM | PERMALINK

Here's what we should do. The House, with Pelosi in charge, should pass a bill that keeps the tax cuts for the middle class only. If the Senate does not pass anything, nothing will happen. So the Democrats could tell the world that Republicans increased the taxes for the middle class because they preferred helping the super-rich.

Posted by: Paul Siegel on November 9, 2010 at 5:37 PM | PERMALINK

Three words, the Dividend tax rate. If the Bush tax cuts expire, the tax rate on dividends will jump from 15% to about 40%. All of those newly minted Republican Hedge Fund tycoons who turned on Obama in this past election, are deathly afraid of this increase.

Obama has already offered to compromise and lock in a small dividend rate increase to only 20%. If they believe Democrats will go all-in on expiration, then Republican obstruction of the far less devastating 20% rate, could hurt them with this wealthy constituency. You will see some serious compromise come January (if Democrats can hold together).

Posted by: BobPM on November 10, 2010 at 12:16 PM | PERMALINK

Frankly, I do not mind if the whole of the Bush Era tax cuts sunset. Let the whole package sunset. Yes, my rates will go up. It will not make that big a difference to the middle class.

But to return to a sane and previously working tax code that brought us a balance budget and, arguably, contributed to economic expansion .... well, yes, in fact... hell yes!

Go Back to Clinton Era tax code. YES.

Posted by: Ed Bardell on November 10, 2010 at 4:40 PM | PERMALINK

You socialists lost the election you are a bunch of greedy people wanting to steal other peoples money all other countries are turning away from the socialist model.

Posted by: dave on November 13, 2010 at 4:32 PM | PERMALINK
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