If the business community is balking at the White House’s new tax cut-heavy recovery policies, because they won’t ladle on top personal tax cuts, you know that Republicans will reject them as well. And that’s exactly what’s happening.

Lamar Alexander wondered how Congress would pay for all these tax breaks, without a hint of irony:

Alexander, the chairman of the Senate Republican Caucus, said GOP lawmakers will consider Obama’s latest proposal to provide a research and development tax credit for businesses. But such a tax credit should come only after the White House agrees to extend the Bush tax cuts, including those on those earning more than $250,000 a year.

“The first thing we need to do is to make sure that we don’t raise taxes (by allowing the Bush tax cuts to expire at the end of the year),” Alexander said. “That is going to take most of September. Then we can turn our attention to seeing if we have money to reduce taxes.”

Basically, he’s saying we have to wait and see on what money’s left over after handing $700 billion to the top 2%. Only those tax cuts are free.

John Boehner basically said the same thing, taking the opportunity provided by Peter Orszag yesterday to bargain down to a two-year extension of the Bush tax cuts, which of course would be followed by another two-year extension, and another, and another.

Brian Beutler points out today that all the main planks of the Obama plan have long-standing Republican support. The bonus depreciation tax credit has been long-sought by business and carried mainly by Charles Grassley (R-IA). The National Infrastructure Bank has the support of the US Chamber of Commerce and has practically been the life’s work of retiring Senator George Voinovich (R-OH). In fact, Voinovich was consulted on the infrastructure plan. As Ed Rendell says in that above link, these ideas were “lifted right out of the Republican playbook.”

I agree that the business tax cuts in this proposal would do nothing to increase aggregate demand, and businesses are unlikely to purchase new equipment without the expectation of future sales, regardless of the tax advantage. But the one possible tax-side policy that could have stimulated demand, a large payroll tax cut for individuals, was off the table for Republicans – because of the cost:

From my reporting, the problem wouldn’t be in the White House. It would be in Congress. I’ve asked a number of Republican offices whether they’d be willing to work with the Democrats on a payroll-tax holiday. Without fail, they’ve told me no, that they no longer support a payroll-tax holiday given the size of the deficit.

These are the same people who want to extend permanently tax cuts which will cost the Treasury $3.8 trillion dollars for the next ten years, and astronomical amounts dwarfing the possible shortfall in social security over the 75-year time horizon reserved for that program.

Republicans obviously see no political disadvantage to saying no, and just humping the Bush tax cuts all the way to November. In fact, while much fanfare is being attributed to the Obama speech coming up in a couple hours and this proposal, it may not even get a vote. We only have three or four weeks left in the legislative session, and the House won’t bother without Senate sign-off. Clearly, that’s not coming.

Which is why I question the strategy of offering a pre-compromised, Republican-penned recovery package as essentially a rallying cry for the midterm elections. The calculus obviously is that Republicans saying no to the policies they have long promoted will show off their hypocrisy, but perhaps a better message would be to design a workable policy to solve the problem, and to ask the voters to give you a mandate for it.