While Harry Reid didn’t commit to a vote on the President’s proposal for a one-year extension of tax cuts on the first $250,000 of income, on the other front where the President differed with some in the Democratic Congressional leadership, the Congresscritters appear to be bowing to the leader of the party. Chuck Schumer, who has led the effort to re-define “middle-class tax cuts” as anything under $1 million in annual income, has declared himself satisfied with the $250,000 strategy.
Sen. Charles Schumer (D-N.Y) — who had pushed hard for letting tax cuts lapse for millionaires at year’s end – has agreed to back President Barack Obama’s plan to impose hikes on families earning more than $250,000, quashing what might have been an election-year Democratic food fight.
Obama’s team quietly pressed top Hill Democrats last month to back the plan in a series of White House meetings people close to the situation tell POLITICO.
“[Schumer] still believes that the millionaire strategy is the best one. But he believes more that party unity at this time is even more important,” said a person close to Schumer told POLITICO, who emphasized that any daylight between the White House and Hill Democrats was tactical, not philosophical.
“He’s going to be a team player for the president.”
Similarly, Nancy Pelosi, who abruptly shifted to the $1 million dividing line earlier this year, acquiesced to the Obama plan, saying nothing about the controversy in her supportive statement released today. The White House and Democratic aides confirmed that the two sides conferred before the announcement.
Schumer and Pelosi will tell you that their change was all about tactics and marketing, that a $1 million dividing line was an easier sell to the public. This smacks of the old Pauline Kael line about how nobody she knew voted for Nixon. To the ordinary American, $250,000 in annual income sounds like a pretty big number. People don’t need a rounder figure to understand the point of letting tax cuts expire for the wealthy.
Now that the dividing line has been re-set, the bigger question is whether or not a strategy with a dividing line is doomed to fail. Republicans know they have leverage if they just vow to not split the tax cuts, only extending those for people making under $250,000 if accompanied by the tax cuts for people making over $250,000. The only way to break that leverage is by declaring it an all-or-nothing deal, and vowing to let all the Bush tax cuts expire if the first-priority option does not succeed. At that point, if they all expire, the Democrats could come back with “Obama tax cuts” in 2013 (provided he’s still President). But that’s really the only way tax rates rise on those wealthy earners. Otherwise, Republicans will be content to block any effort to split things out.