Dems Have An Ace In The Hole In The Tax Cut Fight But Won’t Play It

Senate Majority Leader Harry Reid (D-NV) with Sens. Dick Durbin (D-IL) and Charles Schumer (D-NY)
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For weeks now, Republicans have been intoning darkly about the possibility that Americans will see a historic tax increase if Congress (read: Democrats) and the White House don’t act. At the same time, they’ve come out strongly against just about all of the compromise proposals Democrats have put forward to prevent the Bush tax cuts on the middle class from expiring.

The implication is that Republicans are willing, if it comes down to it, to let all the tax cuts expire at the end of the year, and pin it on the Democrats. But what if Democrats turned those tactics right back on the GOP:? They could hold firm on their framework — which would allow the top-income tax cuts to expire quickly — and then unload on the Republicans if January 1 comes and taxes rise.

Not that it matters: They’re not gonna do it.

“I don’t think there’s any appetite for that in the caucus,” said one top Senate Democratic aide.

That source was echoed by another senior aide, who said the White House hasn’t offered enough direction for Democrats to play hardball. One of the main reason for reluctance is a sense that the public automatically blames Democrats if taxes go up.

In other words, Republicans have more leverage than Democrats, and that is why so many observers predict that the Dems will cave.

Interestingly, one retiring Republican says this option — let the tax cuts expire, and put legislators’ feet to the fire — will be better for everybody, and lead to a more equitable resolution.

“I think we should do nothing, let them all increase — everybody’s,” retiring Sen. George Voinovich (R-OH) told reporters today after a Senate vote. “And then everybody will get to the table.”

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