The latest report from Greg Sargent suggests that Speaker Pelosi is getting an earful from members who fear the consequences of holding a vote on an Obama Plan tax cut for middle income voters and are pressing her not to hold any vote at all. In all likelihood the pressure is coming from folks on this list. This would be notwithstanding seemingly overwhelming public opinion data suggesting it’s the best thing the Democrats can do to help themselves politically in advance of the November election.The argument these folks are using is that if Democrats vote only for the tax cuts on income up to $250k per year that Republicans will hit them with ads that say they “raised taxes” on income over that amount. And that’s probably true, though most polls show that most voters are okay with that. But here’s the question, since allowing tax cuts on income over $250k to expire means “raising taxes,” how is it that allowing all the tax cuts to expire won’t mean Republicans will run commercials saying that Democrats raised taxes on everyone? Everyone on the income scale. People making 30k, 50k, 100k, etc.
It really does seem like a classic example of the fallacy of ‘If we just lay low, they won’t hurt us.’
The other problem is this. Say nothing gets voted on pre-election and the Republicans take one of both Houses of Congress. First thing on their agenda will be extending all the 2001 tax cuts. So they pass that bill and it goes to the president’s desk. Does he veto it? In the midst of what is still a severe recession, there’s a pretty decent argument that you want at least a temporary extension of the tax cuts on incomes under $250k. For a lot of different reasons, having that bill land on the president’s desk would put him in a really tough stop — for political and economic reasons. But consider the other scenario. Say the sub-$250k cuts go through now. Do you really think the GOP wants to hit the ground running in January with tax cuts that only apply to the wealthiest 1% of the population? I doubt it. It exposes them too much. There are no middle income tax to give them cover. I frankly doubt they’ll even try. But if they do I don’t think President Obama would hesitate to veto it. It would make sense both in terms of the country’s fiscal situation and his own political situation.
All of which shows is that even if Democrats don’t gain politically pre-election, the whole thing is still a no-brainer in policy and political terms after the election.
But it’s sounding like they won’t do anything at all.