Editore"s Note
Tilting at Windmills

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December 15, 2010

SENATE APPROVES TAX DEAL, 81 TO 19.... Given the initial reaction to the tax policy agreement reached by the White House and congressional Republican leaders, it was unclear at first whether the bill would crash and burn on Capitol Hill.

And yet, this afternoon, the proposal cleared its first hurdle with relative ease.

The Senate on Wednesday approved the $858 billion tax plan negotiated by the White House and Republican leaders -- the first concrete product of a new era of divided government and acid compromise.

The vote was 81 to 19, as Democrats yielded in their long push to end the Bush-era lowered tax rates for high-income taxpayers, and Republicans agreed to back a huge economic stimulus package, including an extension of jobless benefits for the long-term unemployed and a one-year payroll-tax cut for most workers, with the entire cost added to the federal deficit.

The roll call is online. Of the 19 opponents, there were 13 Democrats, five Republicans, and Independent Bernie Sanders.

Oddly enough, looking back over the last two years, I don't recall any major pieces of legislation passing with a majority this large. For much of the chamber, the allure of tax cuts is just that strong.

Of course, the bill now goes to the House, where support is unlikely to be as one-sided. Some of the agreement's most ardent critics in the House still expect it to pass, but opposition, especially among liberal Dems, remains pretty intense.

That said, circumstances have been less than kind to Democratic detractors in the House. The caucus was gearing up for a fight, but had the wind taken from their sails by multiple national polls showing broad public support for the tax deal, including from self-identified liberal Dems. What's more, the outcome in the Senate also didn't do the left flank in the House any favors.

As Greg Sargent noted after yesterday's cloture vote, "The overwhelming support for the tax deal -- even among Senate liberals -- gives House Dem leaders less maneuvering room to make any substantial changes to the bill. They don't want to risk making changes that wouldn't have support if the bill were kicked back to the Senate, because they don't want to risk imperiling the deal."

Steve Benen 2:30 PM Permalink | Trackbacks | Comments (31)

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For much of the chamber, the allure of tax cuts is just that strong.

Not really tax cuts as no raising of rates on the rich.

Democracy Now had a nice story yesterday on how about 45 million of the lowest paid in this country will be getting a tax increase thanks to the ending of Making Work Pay. But the millionaires will get no raise and they will save even more on their SS contribution, so all is good.

Posted by: martin on December 15, 2010 at 2:35 PM | PERMALINK

As usual, Benen and the other Villagers have this backwards: the bill enjoyed popular support because the useless elected Dem leaders never highlighted what was wrong with it to the public

Had Nancy Pelosi stood up and held a press conference and said " this bill raises taxes on poor people making less than 20,000 a year and also will kill Social Security in 10 years" then something might have been done.

Had she then forced every single high profile Dem to do the same at every media interaction over the next few days, commissioned someone to write OpEds saying that and gotten people to call Dem volunteers across the country then the public would have a vastly different reaction to the bill.

But as mentioned in a prior post, the elected Dems such at their job so it's no surprise that they sucked at this job particular job too.

Posted by: Observer on December 15, 2010 at 2:37 PM | PERMALINK

sorry, above s/b elected Dems SUCK at their jobs

Posted by: Observer on December 15, 2010 at 2:39 PM | PERMALINK

Damn! They are slick. They are going to borrow two trillion dollars from your kids right befor Christmas. Both parties want it. It is the only thing they can agree on. The democrats hope to spend their way back in to favor, and the republicans because it saves them from the blame for thr spending. They all want it. It will pass

Posted by: EC Sedgwick on December 15, 2010 at 2:48 PM | PERMALINK

Bernie Sanders proposed an amendment to take care of the tax problem for low income workers by restoring the Work for Pay proposal and removal of the Payroll tax holiday. The removal of the Payroll tax holiday would also have removed the threat to Social Security. The amendment was shortsightedly, voted down. It had substantial support among the Dems except for the usual group which perceives its loyalty is to the other party, and, predictably, no support from the Party of NO.

Posted by: impartial on December 15, 2010 at 2:49 PM | PERMALINK

Well, the 100 members of Washington's Rich Man's Club (the Senate) continue to aggressively prosecute their class war against the rest of us.

Posted by: Rick B on December 15, 2010 at 2:49 PM | PERMALINK

With 21 "extra votes" it seems to me there IS plenty of room to negotiate changes. If it barely squeaked by the Senate I could see how there would be "little" room to negotiate.
alas... ANOTHER "thing I don't 'get'"

Posted by: 4K on December 15, 2010 at 2:55 PM | PERMALINK

"The allure of tax cuts was too strong." Let's place the blame where it belongs. It is OBAMA who pushed strongly for this and dissed those who did not support it. The arm-twisting was his and only his.

Posted by: impartial on December 15, 2010 at 2:57 PM | PERMALINK

Lawrence O'Donnell had a panel on last night talking about this "proposal". He had Ezra whom I respect and Ms. Doglake whom I barely do, an MSNBC mouthpiece who towed the bullshit line and Mr. Cranky Progressive. I hope this whole thing gets enough stall time (as was mentioned) so that the teabaggers throw a shit-fit and kill it completely.. Supposedly, deficit reduction “was” what they were fighting for; maybe their little pea sized brains take a while to assimilate the effects of this proposal, or maybe they want to murder social security while telling the government to keep their hands off of it.. While I have sympathy for the unemployed, this proposal is a pile of shit with a huge price tag and a bonus for people more fortunate then there brethren. If that doesn't sting, then what does?

Posted by: Trollop on December 15, 2010 at 2:59 PM | PERMALINK

The buck stops at the White House. It's their baby, personally negotiated WITHOUT consultation of legislative Democrats. Now suddenly it's the fault of Congress? Come on, that's outright dishonest.

Posted by: impartial on December 15, 2010 at 3:04 PM | PERMALINK

Y'all need to look at this trillion dollar baby from a senatorial point of view: "In the short run, it will assure my re-election. And in the long run, I'll be dead."
(And my grand kids will have inherited enough to laugh at their share of the debt!)

Posted by: DAY on December 15, 2010 at 3:07 PM | PERMALINK

Doh, "their brethren"..
If you don't spell correctly then your argument loses its punch; at least that is what I was taught. Rock on 11 percent (of the country thinks Obama is negotiating too much with Republicans)!

Posted by: Trollop on December 15, 2010 at 3:08 PM | PERMALINK

I guess Obama can now count on Goldman Sachs to continue to be his single biggest campaign contributor. I guess "Change you can believe in" meant nickels and dimes.

Posted by: tko on December 15, 2010 at 3:08 PM | PERMALINK

The odious nature of this tax deal leaves a bitter taste in my mouth.

Yes, you can tempt me with delicious scents, wafts of bait, but you can't extinguish the stench of money making money for itself: the obscene tax cuts continuing for another 2 years as if the last 9 years hadn't happened.

No way. No how am I ever going to trust Washington now.

The wealthy got what they wanted.

Merry Christmas.

Posted by: Tom Nicholson on December 15, 2010 at 3:11 PM | PERMALINK

The lesson from this is simple.

Legislation that benefits the rich and Wall Street banks over the middle class can get through the congress with ease. Legislation that benefits only the middle class dies.

Posted by: thorin-1 on December 15, 2010 at 3:16 PM | PERMALINK

Here's your shit sandwich peons. A few pesos thrown your way to keep you from inconveniently dying in the street from starvation. Excuse me now ,I must be off to Needless-Markup to by a diamond encrusted watch.

Posted by: Mr Beltway Q. Douchebag on December 15, 2010 at 3:23 PM | PERMALINK

Oddly enough, looking back over the last two years, I don't recall any major pieces of legislation passing with a majority this large. For much of the chamber, the allure of tax cuts is just that strong.

Too bad they’re not stimulative.

Posted by: Joe Friday on December 15, 2010 at 3:24 PM | PERMALINK

For much of the chamber, the allure of tax cuts is just that strong.

With all due respect, Steve, well...duh! The Senate is packed with millionaires; why wouldn't they be allured by a millionaire tax cut?

Posted by: Stetson Kennedy on December 15, 2010 at 3:27 PM | PERMALINK

I guess the threat from Moody's over the USA maybe losing AAA rating on its bonds (because of debt problems, partly exacerbated by retained tax cuts) didn't impress ...
(See www.csmonitor.com/Business/2010/0316/Moody-s-hints-at-move-that-could-be-catastrophic-for-US-debt

Posted by: Neil B on December 15, 2010 at 3:33 PM | PERMALINK

@Mr Beltway Q: A few pesos thrown your way to keep you from inconveniently dying in the street from starvation.

Sorry but it's worse than that. In this deal, taxes go up on the poor not down.

It's just the way we roll in the Obama era.

Posted by: Observer on December 15, 2010 at 3:36 PM | PERMALINK

Well, one prediction of mine is coming true. Bush tax cuts will be extended. Now, onto SS benefit cuts. I can't wait for Obama to start "negotiating" with the Republicans on how to "fix" SS. The same Obama who kept saying, over and over, he would have the Bush tax cuts for the top 2% expire and keeps saying that SS benefits won't be cut, will turn around and say raising the retirement age to 70 (or reducing COLA increases, or whatever) is the best deal he could get and that liberals should STFU and be happy about it. And he will twist arms to get that passed. Happy days!

In all seriousness, though. I sincerely hope I am wrong and that this gigantic budget busting very weak stimulus tax plan will boost the economy. I just don't see it happening.

It's all completely depressing. Our national political discourse seems perfectly calibrated to produce disastrous policies. I don't think it could have been designed to be this dysfunctional.

Posted by: Vince on December 15, 2010 at 3:47 PM | PERMALINK

Once again, the Powers that Be accelerate the concentration of wealth into fewer and fewer hands, which will eventually lead to the proletarian revolution. Thought we proved Marx wrong? I did... but the GOP + Dems seem determined to prove him right.

Viva la revolucion,

Posted by: Zorro on December 15, 2010 at 3:47 PM | PERMALINK

Uh, don't tax bills have to originate in the House? The Senate has messed this up several times, quite recently. The Food and Drug bill failed because of it. So the Senate is definitely going to have to vote again, whether the House passes the Senate bill or, more likely, not.

I don't get how the nobody in the news media or Congress seems to have picked up on this issue, particularly in light of very, very recent history.

Posted by: Paying Attention on December 15, 2010 at 3:47 PM | PERMALINK

Very happy to say that both my Democratic senators voted NO. I know, small consolation.

Hannah in Oregon

Posted by: Hannah on December 15, 2010 at 4:04 PM | PERMALINK

Very UNHAPPY to see my California senators vote YES. Cowards, and I am dialing to tell them (or their phone lackies) so as soon as this comment is posted.

Posted by: bdop4 on December 15, 2010 at 4:36 PM | PERMALINK

"Don't tax initiatives have to begin in the house?"
Normally but when the president says: "this is the deal--take it or leave it" all precedent disappears in the scramble not to be dissed on national television.

Posted by: Impartial on December 15, 2010 at 4:44 PM | PERMALINK

The Dems will regret this vote big time. The bill has very little stimulus effect (0.1 - O.3% drop in unemployment of 9.8% in 2011, no real effect thereafter) for $800B increase in debt. "Tax increases by Dems in 2012" will be the constant Repub theme-- and BHO will not grow a pair in the next two years that haven't been grown in the last two years.

The best that could happen is for a vaguely credible Progressive or Populist (e.g., Dean, Sanders, Webb, Wyden) need announce a challenge to BHO pdq. If centrist bloggers are correct, the many twits they attack in these commentors that are unhappy with BHO will represent a whining 3-5% of the electorate. If my guess is correct, such a candidate would get 20-30% support of the electorate (Dems & independents) within months of announcing. In that case an electoral fire is lit, and Obama is toast in 2012. A successful challenger will have as much chance of beating a Palinista as BHO would -- and a MUCH better chance of once again changing the composition of the congress toward Progressives than BHO ever would.

Obama has so many problems now of his own making that he must go. Otherwise Repubs are going to run against a nightmare combination of the worst of LBJ and Hoover for a generation. In foreign policy in Afghanistan and Iraq, Obama has set himself up for a costly no-win set of occupations/wars that are now his. His foreign policy situation is at least as bleak as LBJ’s in 1967. In domestic policy, Obama now owns the Great Recession. He has no real understanding of Keynesian economics to get us out. He obviously believes that voters care more about bipartisan compromise and budget cuts than ending the economic crisis and believes that economic recovery requires Hooverian economics to balance the budget.

Furthermore, BHO constantly acts as if he just compromises a little more, the Republicans might still meet him halfway. Even Chamberlain learned after a couple of years that you can't compromise with an intractable opposition bent on your destruction .

Posted by: gdb on December 15, 2010 at 4:57 PM | PERMALINK
Uh, don't tax bills have to originate in the House?

Nope, only bills "for raising revenue" (first clause of Art. I, Sec. 7) must originate in the House of Representatives. So tax cuts don't have to originate in the House of Representatives unless they are proposed for the purpose of taking advantage of the supposed Laffer Curve to raise revenue by cutting taxes.

Of course, since Republicans in the Senate are unswervingly loyal to the Constitution's limitations, their support of this package should be read as a repudiation of the notion of the Laffer Curve.

Posted by: cmdicely on December 15, 2010 at 5:19 PM | PERMALINK

Here's my advice to the House:

Delay the vote (but don't tell the Senate why) until AFTER DADT is repealed, the DREAM Act is passed, START is ratified, and judges are confirmed.

Then, at that point, if I had my druthers, the House should pass their own version of the bill with, among other things, the estate tax provision fixed.

If the Senate balks at that point, then let the Bush cuts expire. Obama can start negotiations again in 2011 by creating an Obama tax cut while the Senate reforms their archaic rules (on this note, mark your calendar for January 5th, 2011).

Posted by: Chris on December 15, 2010 at 5:42 PM | PERMALINK

Fuck the lot of em.


Posted by: marble on December 15, 2010 at 7:49 PM | PERMALINK

Does saying anything to get elected fall under the definition of "pragmatism"?

Next up, a defense spending bill with 8 billion dollars of earmarks including almost half a billion for the alternative engine for the F-35. Obama threatened to veto the bill but now the White House is urging the Congress to pass it.

Obama, here's a word you should look up, "integrity".

Gee, how could people not believe that Obama will fight to not extend the Bush tax cuts again in 2012 and he will ensure social security is not weakened. Simpson and Bowles just seemed to need something to do. Maybe the FDA could put out a cookbook on different ways to prepare dog and cat food.

Posted by: tko on December 15, 2010 at 8:20 PM | PERMALINK



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