Mitch McConnell has decided on the fruitless task of introducing legislation to extend the Bush tax cuts, rather than the Obama tax plan which only maintains the rates on the first $250,000 of income.
“The good news is that a growing chorus of Democrats, including at least five here in the Senate, are coming round on this issue,” he said on the Senate floor. “They oppose the tax hikes the administration is proposing. As Sen. Lieberman put it earlier today, ‘I don’t think it makes sense to raise any federal taxes during the uncertain economy we are struggling through. The more money we leave in private hands, the quicker our economic recovery will be.’” [...]
Reid controls the Senate calendar and it is not clear if McConnell’s bill will come up for a vote. A Republican aide said that “by extending current tax law, it would prevent massive tax increases on everyone, including the small businesses who Democrats have targeted for hikes.” The aide expects the meaure to be “officially introduced as early as today.”
As McConnell pointed out, several Senate Democrats have said they do not want to get rid of the cuts for the wealthy, casting doubt on whether or not the Senate could pass legislation that does not include an extension for the highest earners.
Let’s make this a little more clear: McConnell’s legislation won’t come up for a vote. If he wanted this legislation to pass, he would simply express the sense of the entire Senate Republican caucus that they will filibuster any bill that doesn’t extend all the tax cuts. But he clearly doesn’t have that commitment from his caucus, and had to backtrack on the claim earlier today. This legislation is more of a stunt. Reid will put forward his own bill. It will probably have the tax cut for millionaires attached, as a politically tricky vote, but McConnell would have to find 60 votes for it. And even with Lieberman and Bad Nelson, those votes aren’t there.
Mitch McConnell wouldn’t resort to a stunt like this if he didn’t have some other cards to play.
Meanwhile, a key part of the wonkish side of this debate emerged today, as Moody’s released a report showing that the rich save, not spend, their tax cuts, taking money out of the economy:
Hand the wealthiest Americans a tax cut and history suggests they will save the money rather than spend it.
Tax cuts in 2001 and 2003 under President George W. Bush were followed by increases in the saving rate among the rich, according to data from Moody’s Analytics Inc. When taxes were raised under Bill Clinton, the saving rate fell.
The findings may weaken arguments by Republicans and some Democrats in Congress who say allowing the Bush-era tax cuts for the wealthiest Americans to lapse will prompt them to reduce their spending, harming the economy. President Barack Obama wants to extend the cuts for individuals earning less than $200,000 and couples earning less than $250,000 while ending them for those who earn more.
Democrats remain with the upper hand in this debate, even despite the distancing from some key members. They have the facts, public opinion, procedure and the votes on their side. That, of course, doesn’t mean they won’t screw it up somehow – in fact, it perversely may mean they will. But they have a hand to play.




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Ok let’s play this thing out.
1) Reid introduces tax cut for the middle + rich, despite the fact that this makes Reid look like a shill for the rich.
2) Dems filibuster their own bill and it fails to get 60 votes.
3) Next Reid introduces tax cut for the middle only, which is what most Dems say they want.
4) Republicans filibuster because they say they want a “short-term” extension of all tax cuts as a compromise (the Lieberman plan).
5) Mainstream media runs interference for Republicans by portraying this compromise as sensible.
6) Republicans get a one year extension of tax cuts for the rich.
7) For the next reconciliation bill, Republicans have 51 votes to extend tax cuts for the rich indefinitely.