Why The Bush Tax Cut Vote Was So Important

July 27, 2012 3:55 a.m.

During and after yesterday’s big Senate tax vote, I noticed some observers were pretty quick to diminish the magnitude of what transpired, and what Harry Reid managed to accomplish. That wasn’t exactly a widely shared sentiment, but common enough that I think it’s worth breaking down exactly why it wasn’t a predictable development, and why it matters.In hindsight, an inability or unwillingness to phase out the Bush tax cuts for high earners before the 2010 election was the Democrats’ single largest failure of President Obama’s first two years. That single omission underlies so many of the difficulties he’s faced in the ensuing year and a half that it’s difficult to fathom how different the political landscape would look today if Dems had handled things differently in 2009 or 2010.

But they didn’t do it in the brief period when they had 60 votes. They didn’t do it via the budget process, which would’ve required rounding up only 50 votes, and they were so scared of every GOP utterance by the fall of 2010 that they didn’t even effectively turn GOP hostage-taking into an effective political weapon. Senate Democrats fractured over whether to set the expiration threshold at $250,000 or $1 million, and even at that higher bar they weren’t able to unite in a way that clarified the Republican’s politically noxious legislative strategy. House Democrats were in even greater disarray. It was a mess.

Obviously many things are different now. Obama’s on the ticket this time. His opponent is a poster child for tax inequity. A sea change in national politics has made it easier for politicians to address issues like inequality.

But it’s hard to draw a direct line between changes in the political environment and the decision making processes of the usual Democratic suspects. Notice for instance that all the vulnerable Democratic incumbents found their spines and voted for the bill. (Ironically, the caucus’ defectors — Joe Lieberman and Jim Webb — are both retiring.)

I think that’s almost entirely attributable to a commitment to purpose among Democratic leaders that just wasn’t there two years ago. The White House deserves a lot of credit for that — for stepping up a month ago and yanking Congressional Dems out of the politically palatable but substantively lazy consensus that they should draw the expiration line at $1 million. Once that was done, Harry Reid and other Dem leaders made clear, both publicly and privately, that politics and leverage were on the Democrats’ side in this fight, and that political consequences of rebuffing the President would be devastating.

Toward that end, Harry Reid stared down Mitch McConnell in a way he just didn’t try in 2010. McConnell voluntarily dropped a filibuster, ostensibly to prevent Democrats from dragging the fight out for months and months, and identifying Senate Republicans as the key antagonists. He hung that anvil around John Boehner’s neck instead.

Patty Murray — whose job as DSCC head is to keep Democrats in charge of the Senate — gave a widely discussed speech in which she basically committed herself and her party to holding the line, to clarify that the GOP’s insistence on extending tax cuts for wealthy people threatens higher taxes on everyone.

“Holding the middle class tax cuts hostage may be a smart tactical move if the goal is to protect the rich,” she said. “But it’s not good policy, it’s not good politics, and Democrats are going to keep reminding the American people why middle class tax cuts aren’t being extended immediately even though both sides say they want them to be.”

That was before Wednesday’s vote. Now the threat isn’t idle, and instead of speaking generically about how Democrats and Republicans should get together and extend the Bush tax cuts they agree on, Obama and Democratic leaders will howl that Boehner won’t pass this bill because Republicans would rather everyone’s taxes go up than see rich people pay slightly more. Mitt Romney’s going to have to answer for that strategy, too.

Actually passing the bill lends the issue a huge degree of political potency, and robs House Republicans of the claim to be that they alone have a plan to avoid a fiscal catastrophe at the end of the year.

Now I don’t think the public hue and cry will be loud enough to force Republicans to move off their position before the election. Maybe if this were another issue — but not taxes. And if Mitt Romney wins in November, then they’ll just extend all the Bush tax cuts anyhow. But if Obama wins, this bill will still be live. And the pressure on the House GOP to relent and pass it during the lame duck will be overwhelming.

Latest Edblog
Masthead Masthead
Founder & Editor-in-Chief:
Executive Editor:
Managing Editor:
Senior Editor:
Special Projects Editor:
Editor at Large:
General Counsel:
Head of Product:
Director of Technology:
Associate Publisher:
Front-End Developer:
Senior Designer: