Although many Democrats say they're unhappy that President Obama isn't playing hardball enough with the GOP when it comes to the Bush-era tax cuts, the Democrats did put everybody on record on Saturday when the Senate voted down two measures — one that would end the tax cuts for all individuals making more than $200,000 (and couples making more than $250,000), as well as what analysts contended was a better political measure for Democrats, keeping the tax cuts for those making less than $1 million. But that was apparently another bridge too far for Republicans.
Republicans like John Boehner and Mitch McConnell had denounced those votes as purely political theater, but they showed that in fact, even with a majority in the Senate for a few more weeks, the Democrats can't pass those measures. McConnell blasted the votes while on Meet The Press yesterday:
Sen McConnell:…And it is almost laughable that we were in session yesterday. It reminded me of the old movie "Groundhog Day." We just kind of keep doing the same thing over and over and over again. The voting, once again, on the tax issue, it could have been dealt with at any point during the course of the year. Here we are at the end of the year. I think it's pretty clear now taxes are not going up on anybody in the middle of this recession. We're discussing how long we should maintain current tax rates. And there are other issues that many people feel are important to address on unemployment compensation.
Only four Democrats voted with the Republicans on those twin votes, but we can report that Florida's Bill Nelson was not one of them (They were Nebraska's Ben Nelson, West Virginia's Joe Manchin, Virginia's Jim Webb & Wisconsin's Russ Feingold.)
Although many Democrats and liberal-minded thinkers continue to rap Obama for being spineless in not taking it to the Republicans on this issue of tax cuts, Massachusetts Senator John Kerry had the president's back when he followed McConnell on MPT.
SEN. KERRY: Here's what the president is doing. The president is fighting to get unemployment insurance that they have held hostage. This is the point. People need to focus in America. The Republicans have been willing to hold unemployment insurance hostage to this bonus tax cut that has the least impact and adds to the deficit. And the phony recklessness of their position is this, they've said for months, "We can't give you unemployment compensation because it's unpaid for and it will add to the deficit." But yesterday they were willing to vote for a $4 trillion increase that wipes out everything the debt commission is doing, in order to give a tax cut to the wealthiest people. Now, the president's prepared to compromise to get unemployment insurance, to get the work for pay tax cut, to get a child care credit tax cut, to get additional tax cuts that go to average people and will create jobs. But he wants to do more than that, and this is the most important difference between us and them. The Republican agenda is tax cut and cut spending. We cannot cut our way to competition with these other countries. If we're going to be a great power, if we're going to project in the world, if we're going to put America back to work and be part of the $6 trillion market that is the new energy market of the future with six billion users, we need to invest in America's future."
According to the Wall Street Journal, the tax package being negotiated between the White House and the GOP could tack on as much as half a trillion more dollars to the deficit:
The tax package being discussed, including a likely temporary extension of a number of tax breaks for businesses, could add more than $500 billion to the deficit, depending on details. But supporters in both parties believe much of that money would be poured back into the economy at a time when recovery remains tentative.
Still, many elements of a potential deal were unsettled, including issues such as the estate tax, which has been eliminated entirely for 2010. Most Republicans would support setting the top rate at 35% for estates over $5 million. Most Democrats want to set the rate at 45% for estates over $3.5 million. Without action, the top rate next year goes to 55% for estates over $1 million.
Also unresolved is whether the package will include provisions that Democrats want that would benefit the middle class and working poor, such as expanded tax breaks for students and children that were part of the 2009 stimulus legislation.
This article appears in Dec 2-8, 2010.