Democrats have tweaked the pay-for on the American Jobs Act, making it a straight surtax on millionaires, rather than the other pay-fors on itemized deductions and closing the carried interest loophole. In other words, they altered a tax on the rich and turned it into another tax on the rich with a better slogan next to it.
Here’s Harry Reid announcing the plan on the Senate floor:
Democrats have listened to the American people, and they have been very clear: it is time for millionaires and billionaires to pay their fair share to help this country thrive.
Americans from every corner of the country and every walk of life agree. Democrats, Republicans and Independents agree. Asked if they support a plan that would require people making more than $1 million a year to contribute a little more to ensure this country’s economic success, the results were resounding: three-quarters of Americans said yes.
Wealthy Americans agree. Two-thirds of people making more than $1 million a year said they would gladly contribute more.
A supermajority of Republicans agrees, with two-thirds saying they supported the idea.
And even a majority – 52 percent – of members of the Tea Party agreed.
So when Democrats bring this common-sense jobs legislation to the floor, we will also ask Americans who make more than $1 million a year to contribute a little more to help this country reduce its jobs deficit.
It’s not yet clear whether the millionaire’s surtax will be merely part or all of the pay-fors for the $447 billion bill. You would need close to a 5% surtax to offset the whole bill. And since the itemized deductions cap raised the lion’s share of the money in the President’s bill, the surtax would have to be pretty high if you eliminate that (which for some reason some Democrats don’t like). What we may see is a partial offset, which would mean that the bill won’t be fully paid for. Elements like extending unemployment insurance may be characterized as “emergency” spending.
Mitch McConnell pulled a fast one yesterday by attempting to attach the jobs bill to the Chinese currency measure, generating headlines that said things like “Democrats deny vote on their own jobs package.” Since this is all political, I guess we’re going to see political game-playing. Reid countered by offering to proceed to debate immediately on the American Jobs Act yesterday, but Republicans blocked that. So both sides have their stories. “This, I think it’s safe to say, is why Congress’ approval rating is at a record high,” said Brian Beutler. Agreed.
Meanwhile, you have this strange parallel universe going on where the President keeps talking about the American Jobs Act on the road and targeting Republican obstructionism, as if the bill is a going concern. There’s a method to this dead horse strategy, where the President whips up support for something that isn’t likely to get beyond the early stages of the legislative process. That’s clearly an argument for 2012. And at least at some level, it has had an immediate impact; the House GOP is working on a bigger surface transportation bill than they originally envisioned, something more in line with the Senate’s numbers and the general call for infrastructure spending in the American Jobs Act.
However, other parts of the bill, like extending unemployment insurance or the payroll tax cut, are not seeing the same kind of movement. And that ought to raise recession fears significantly.