In 2010, despite large majorities in both houses of Congress, Democrats demurred on holding a vote to back Republicans into a corner on the Bush tax cuts. They did not vote on what has become the default Democratic plan, supported by the President and most Democratic leaders, to extend the Bush tax cuts for the first $250,000 of income, while letting the cuts above that income level expire. Democrats then got trounced in the midterm elections and lost the House.
Now, the Senate leadership maintains that they really want to have this debate this time around. But that would of course only be confined to the Senate, with the House in Republican hands. And it’s unclear whether they would even be able to muster a majority for such a position, given the makeup of the Senate and the various threatened incumbents facing a tough 2012 re-election campaign.
Senate Democrats are considering a debate on ending the George W. Bush-era tax cuts for top earners before the November election because they think they’re in a stronger position than in 2010, Senator Charles Schumer said.
The tax cuts expire for all income brackets on Dec. 31. Schumer of New York, the third-ranking Senate Democrat and architect of his party’s communications strategy, says he doesn’t want to wait until the end of the year to debate Republicans over ending the break for high-earning taxpayers. The issue is part of the Democratic campaign theme of promoting tax fairness, he said.
The Senate’s majority Democrats may bring the issue to the floor for debate over the next few months to make their point.
“That is one of the things we’re looking at very carefully,” Schumer told reporters Feb. 28. “I think that the public is on our side.”
The public may be on Schumer’s side, but you know who isn’t? Ben Nelson and Joe Manchin. And perhaps Jon Tester in Montana and Claire McCaskill in Missouri, given their re-election fights (though McCaskill says in the article that she’d be on board with just extending the “middle class” tax relief). So there’s no guarantee of 50, let alone 60, votes for such a measure at this time. And that would be an embarrassment to the party.
This all stems from the desire to extend the majority of the Bush tax cuts and only cut off the ones for the top 2%. Just like in 2010, this means you have to pass something affirmatively, and Republicans simply will not allow the tax cuts above $250,000 and below $250,000 to be severed. The preferable strategy would be to let the Bush tax cuts – all of them – expire, and then come back after the fact with the “Obama tax package” strategy, which could add progressivity back into the system. Like we saw with the payroll tax cut debate, this would put Republicans in a difficult position, and depending on the nature of the tax package, could raise needed revenue to get the percentage of GDP in revenue back toward the historical level.