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Republicans now blaming Democrats for Bush tax cuts

1-31-07tax-f3.jpg

The new Republican line is that there's a “Democrat tax hike" on the way. And it's a big 'un: "An unprecedented $3.8 trillion increase" that will affect -- and this is their bold and underline, not mine -- "every American who pays income taxes!"

To understand what's going on here, you need to go back 10 years to the passage of the Bush tax cuts. In order to maximize the size of the cuts, Republicans had to minimize the influence of minority Democrats on the package. So they chose to run the bill through the reconciliation process.

But that posed some challenges. Budget reconciliation had never been used to increase the deficit. In fact, it specifically existed to decrease the deficit. That's why one of its rules was that you couldn't use it to increase the deficit outside the budget window. Republicans realized they could take that very literally: The budget window was 10 years. So if the tax cuts expired after 10 years, they wouldn't increase the deficit outside the budget window. They'd also have the added benefit of appearing less costly in the Congressional Budget Office's estimates, as the CBO duly scored them as expiring after 10 years, which kept the long-range budget picture from exploding.

But the plan was never to have the tax cuts expire. Instead, the idea was that people would get used to the new tax rates, and no future Congress would want to allow a big tax increase, so when the time came, either Republicans in office would extend the cuts or Republicans in the minority would hammer Democrats until they extended them. And that's where we are now: Democrats control the government, so Republicans are screaming about tax increases as a way to get Democrats to extend tax cuts.

It's really hard to know where to start with this one. It's not a tax increase passed into law by Democrats. It's a reversion to old tax rates passed into law by Republicans. It's not how law is supposed to work. It's the result of twisting a budget process meant to reduce the deficit so you could use it to massively increase the deficit. And as for the policy itself, it's a fiscal nightmare: No one who professes concern for short-term deficits can argue for the extension of these deficit-financed tax cuts and retain credibility on debt issues. This is a litmus test. It's not Democrats who are trying to pass the largest tax hike of all time, but Republicans who are calling for the largest increase in the deficit in memory.

Graph credit: Center for Budget and Policy Priorities.

By Ezra Klein  |  July 19, 2010; 11:27 AM ET
Categories:  Taxes  
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Next: Cost control and the ACA

Comments

You mean the Republican Party is using procedural rules in bad faith?! What an unprecedented and out of character development.

I really, really wish the Democratic party would learn its lesson from these kinds of moves. Don't negotiate with these people -- they're not your friends and they don't care about working together to improve the country. Their only interest is to reduce the responsibility of their corporate donors as much as possible. Fair play, consistency, coherence -- all of that is irrelevant. Work with them in good faith and they'll beat you over the head with it.

Posted by: NS12345 | July 19, 2010 11:50 AM | Report abuse

You mean the Republican party is acting like the Democrat party?

You mean that the Republican party is starting to use the tactics of the Democrat party?

You mean that the Alinsky model can be adopted by folks on either side of the aisle?

You mean that "the ends justify the means" is a slogan either side can adopt?

You mean that the scortched earth politics of the Democrats during the Bush years lowered the bar on behavior to such an extent that the Democrats are now upset because they can't have everything they want immediately?

You mean that the Democrats are trying to find a way to let the Bush tax cuts expire while not taking the blame for the huge increase in taxes Americans will experience?

If the stakes weren't so high the sophistry of the liberals would be a joy to behold. As it is they must be routed out of power before they destroy us all.

My bet is that Mr Klein will delete this comment

Posted by: skipsailing28 | July 19, 2010 11:57 AM | Report abuse

Democrats should be referring to this as "Restoring the Clinton tax rates", and maybe people would start remembering that led to the Clinton economy.

Posted by: stevie314 | July 19, 2010 12:01 PM | Report abuse

skipsailing28:

I won't hold my breath waiting for some examples of the "scorched earth politics of the Democrats during the Bush administration'.

If you ever want to know a what Republican is up to, check out what he's claiming his opponent is doing.

Posted by: lol-lol | July 19, 2010 12:03 PM | Report abuse

Isn't it actually the case that Republicans are raising taxes? They were the ones who passed the law that causes this tax increase to occur in 2011.

Posted by: CEM1 | July 19, 2010 12:07 PM | Report abuse


The Republicans' strategy has a good chance of success. I had a recent conversation with a friend who blames Obama for the upcoming increase in the income tax and estate tax. He knows that Republicans passed the law as it is now but he says that it'll be Obama's fault if they go back up.

Posted by: TXAndy | July 19, 2010 12:09 PM | Report abuse

I just submitted a comment and received the "This will be reviewed by the blog owner." which I take it means it won't get posted. Here's what I said:

skipsailing28, there are plenty of conservatives around these parts that post thoughtful, interesting and debatable posts that I can respond to. You post just makes you seem like a...

It was at that point that I used the word d-o-u-c-h-e, which is presumably why it got killed. I'm a bit baffled that the language restrictions are that strict.

Posted by: MosBen | July 19, 2010 12:10 PM | Report abuse

@skip: "You mean the Republican party is acting like the Democrat party?"

You mean, politicians are being politicians? And that's it's totally okay when my guy did it, because the ends justified the means, or that isn't what they really did, or it's not the same thing at all, but when the other side does it it's an outrageous abuse of power?

That being said, the Bush tax cuts were a new way of doing major legislation--passing things with a built in expiration date. A novel use of the budget reconciliation process, to boot. But the use of parliamentary tricks and procedural loopholes to get things done is as old as the Articles of Confederation.

But, back to the weird expiration dates on the Bush tax cuts: all government legislation should come with that! Including the original levying of taxes in the first place.

"My bet is that Mr Klein will delete this comment"

My bet is that, no, he won't, as Ezra encourages thoughtful and even contrary discussion. And has, historically, warned commenters when they're grinding their axes too hard.

Maybe you're thinking of the Daily Kos?

Posted by: Kevin_Willis | July 19, 2010 12:12 PM | Report abuse

skipsailing 28, the funny thing is that I wish the Democrats would understand the situation exactly as you lay it out. Too many high level Democrats seem to think most conservatives are interested in preserving relationships and looking for common ground. Max Baucus thought Chuck Grassley would come along on healthcare because they were friends. Kerry and Lieberman thought Lindsey Graham would help on climate because they respected each other as colleagues. The Obama Administration lowballed its stimulus because it thought conservatives would quickly jump on to a low-range spending estimate. In each case, the willingness to work with conservatives in good faith came back to bite them.

But, as you put it, the "Alinsky model" or the "ends justify the means" is available to either side. For now, the relationship between the parties isn't "compromise" but a bare knuckle fight. I want my "side" to understand that, and come out fighting.

Posted by: NS12345 | July 19, 2010 12:30 PM | Report abuse

Republicans go on national TV and tell America that they want to go back to the Bush/Cheney policies...

...and here comes toadies like Skip to change the subject.

Why?

Because people like Skip here *LIKE* Bush/Cheney policies. It doesn't matter that over 60% of the country knows that it was Bush policies that got us into this mess. Facts be damned.

Here are the facts:

1) The CURRENT Republican Party is cheerleading the return of the Bush/Cheney economic policies.

2) Neoconfederate toadies on political message boards all agree with the Bush/GOP platform of Tax Cuts for the Rich at the expense of EVERYTHING and EVERYONE ELSE in America

3) We NEED to let the tax cuts for the rich expire or the Republican Party will have succeeded in killing the Federal government by draining it of resources

4) Republicans not only want tax cuts for the rich... but by not paying for the tax cuts and the wars when they were in the majority they showed that when push comes to shove, they are perfectly fine running up a huge budget deficits and exploding the national debt as long as the rich get to be richer and richer.

Posted by: Ethan2010 | July 19, 2010 12:36 PM | Report abuse

Look, Republicans will say that tax cuts that aren't paid for and lead to trillions in added debt over time are worth it because they help the economy as a whole. But we tried it for the last 10 years -- it *didn't* work. Wages were stagnant, George W. Bush had the worst job creation record of any President in history, concluding in the worst economic catastrophe since the Great Depression. So, uh, no more of that please. Uncle! Uncle!

Posted by: vvf2 | July 19, 2010 12:42 PM | Report abuse

All the arguments in your last paragraph would be useful if 1) Most Americans were not idiots and 2) most Republicans were not lying b_st_ards. Unfortunately, neither of these conditions obtains.

Posted by: guesswhosue | July 19, 2010 12:50 PM | Report abuse

actually the title should read:

Republicans now blaming Democrats for LETTING the Bush Tax cuts expire.

There is a difference.

Posted by: visionbrkr | July 19, 2010 1:08 PM | Report abuse

Yes, it's sort of like the way the budget window was used to gain passage of the PPACA: the PPACA increases the deficit dramatically, but the increase occurs outside of the budget window, so in fed-think it's OK.

The difference is that the Bush tax cuts actually helped some people, whereas the PPACA does not.

Posted by: rmgregory | July 19, 2010 1:10 PM | Report abuse

rmgregory,

"The difference is that the Bush tax cuts actually helped some people, whereas the PPACA does not."

I'm not exactly a PPACA cheerleader here, but it helps no one? I find that hard to believe. Can you explain that one a bit more? I don't see how at least several million people aren't unambiguously better off, even assuming the country as a whole to be worse off.

Posted by: justin84 | July 19, 2010 1:33 PM | Report abuse

rmgreggory, yeah, come on. I know we disagree about the relative worth of the ACA, but you can't seriously argue that it helps *no one*. It very clearly will help millions of people. The question should be whether it's worth it or whether we can afford to do so. We may disagree on the answers to those questions, but it really shouldn't be debatable that some people will benefit from the ACA's passage.

Posted by: MosBen | July 19, 2010 1:56 PM | Report abuse

They are the Bush 2011 tax hikes.

They (Bush and the GOP) passed them. It's their baby. Live by the budget gimmick, die by the budget gimmick.

Posted by: danimal1 | July 19, 2010 2:21 PM | Report abuse

The simple answer is to do what president Obama campaigned on. Permanently extend the existing tax rates for all those families making less than $250,000 and let the tax rates for those making over that number expire.

It has the advantage of not breaking another campaign pledge.

Posted by: lancediverson | July 19, 2010 2:24 PM | Report abuse

Could someone please tell me who the Bush tax cuts helped besides the rich? And also could someone tell me why the Democrats are putting up with our House of Lords - I mean the US Senate - by allowing the 60 minimum on every bill? And where is our clueless leader? Why doesn't he insist on majority rule?

Posted by: cougartonyusa | July 19, 2010 2:41 PM | Report abuse

I am amazed at the number of people that think taxes will not increase next year on everybody. That includes people making less than $250K a year. The money has already been spent, or more accurately, funneled to public employee union goons, and will be paid back.

There is a reason that BOTH side use gimmicks and the arcane rules of the House and Senate to pass unpopular legislation: WE LET THEM GET AWAY WITH IT!

Posted by: TECWRITE | July 19, 2010 2:46 PM | Report abuse

In the interest of repealing the Bush initiatives that added the most to the deficit (except the wars, we can't really get that money or more importantly the lost lives back), I propose we both:

a: Let the Bush tax cuts expire in their entirety.

b: Repeal Medicare Part D

Actually, that would be an interesting question for your researcher: Which Bush policy caused the greatest increase in the debt during his term of office? Tax Cuts, entitlement increases (Medicare Part D), or the wars/homeland security?

Posted by: jnc4p | July 19, 2010 2:49 PM | Report abuse

Hey Ezra, you PUTZ, the Democrats have a tax increase coming down the tracks and they control BOTH Houses of Congress and can do one of two things.

They can use their majority to extend what is already in place and by doing so NOT take away MORE money from Americans already suffering from this recession. Or they can do NOTHING and by doing nothing they will raise taxes on every American in the middle of the worst recession since the great depression.

You have the unmitigated gall to mention Republicans and deficits in the same breath when your liberal pals have TRIPLED the deficit in just 18 months?

You're clueless Ezra and you have the job best suited for you as the piss bucket carrier for the Obama Administration.

Posted by: jjv4012 | July 19, 2010 2:57 PM | Report abuse

I've always thought that one of the reasons the Repubs were willing to use reconciliation for the cuts was because of the annoying conservative tendency to believe their own propaganda. The really believed in Rove's "permanent Republican majority," and assumed that they'd still be running the show when the cuts expired. Blaming Democrats for a tax hike that the Repubs actually structured themselves is just the fallback position.

Posted by: rashomon | July 19, 2010 2:57 PM | Report abuse

See, jjv4012 can call Ezra a piss bucket carrier, but I can't use the word d-o-u-c-h-e? That seems somewhat unfair.

As for you actual comment jjv4012, you don't get hurl deficit bombs ten years down the road and then blame whoever's in charge at the time for tax increases. The Bush tax cuts were irresponsible at the time, and anyone that thought about it for more than a couple minutes knew it. This simply not a tax increase any reasonable sense of the word.

This was a temporary tax cut to achieve a stimulative effect on the economy; they just took "temporary" and stretched it out as far as the law would let them. When something temporary ends, it's not a new state that you're left in: it's the return of the status quo.

Posted by: MosBen | July 19, 2010 3:37 PM | Report abuse

> It's not a tax increase passed into law by Democrats. It's a reversion to old tax rates passed into law by Republicans.

Let’s see here. My taxes will go up. The Dems could have prevented that, but didn’t. But its unfair to blame them for my taxes going up.

> so you could use it to massively increase the deficit.

Proving you know nothing about economics. Here’s a hint. You can’t make money off taxes if the economy tanks. And if you increase taxes… the economy tanks.

But if the private sector is allowed to keep its money we can hope for growth, which in turn means higher amounts of income to be taxed, and thus more money from a lower tax rate.

Now I know that the laffer curve is still controversial, but shouldn’t you at least acknowledge it?

At the very least your silly chart shouldn’t just assume that incomes would remain the same no matter what.

Posted by: awalker1972 | July 19, 2010 4:07 PM | Report abuse

The bottom line is this; if we raise taxes back to those levels we could easily go into a double dip or for that matter a full blown depression. I'd think long and hard about the repercussions of a massive tax hike in the midst of the largest downturn since the Great Depression. If you want to lower the debt why not try a novel idea: cut spending!

Posted by: sleestack108 | July 19, 2010 4:29 PM | Report abuse

Considering that the Bush tax cuts were just a way to take the surplus that existed at that time and spread it out amongst the richest Americans, it did its job and should be retired.

Posted by: Snertly | July 19, 2010 5:55 PM | Report abuse

Much of Bush's tax cuts were in 2001 and 2003 but were extended in 2002, 2004, 2005 and 2006 by means of reconciliation procedures. Knowing how the use the budget window to show the increase in the deficit outside budget window time frame.

As result if they were taken out of power, you would expect them to make the loud claim that it was the Democrat's fault for the tax increases when it is the Republicans who put the temporary tax break that would be reverted back to what it was before 2001.

Largely it succeeded because of the political narrative of placing blame and name calling while ignoring what they created the first place.

Posted by: beeker25 | July 19, 2010 6:42 PM | Report abuse

The bottom line is this; if we raise taxes back to those levels we could easily go into a double dip or for that matter a full blown depression. I'd think long and hard about the repercussions of a massive tax hike in the midst of the largest downturn since the Great Depression. If you want to lower the debt why not try a novel idea: cut spending!

Posted by: sleestack108 |
---------
First of all many of the Republicans made that claim when Clinton was in office.

Second of all you have 535 people with different ideas of what to do and they also make the decision by voting for legislation.

Many of the spending is intertwined with programs that you and I take advantage of: police, fire, road, transportation, schools, health and etc. It goes to show how naive you are.

Posted by: beeker25 | July 19, 2010 6:48 PM | Report abuse

THIS NEEDS TO BE ON THE FRONT PAGE!!!

Posted by: edismae | July 19, 2010 7:21 PM | Report abuse

But President Obama ran saying that he would end the Bush tax cuts.
How dare you take away from the President, our Dear Leader, his due.

Posted by: warnerme | July 19, 2010 7:25 PM | Report abuse

People will soon realize that the Republicans are nothing but hot-air. Right now they're riding on young independents that don't know any better, and are buying the BS hook-line-and sinker. They're going to wake up real fast.

Posted by: HemiHead66 | July 19, 2010 8:56 PM | Report abuse

RE: "Isn't it actually the case that Republicans are raising taxes? They were the ones who passed the law that causes this tax increase to occur in 2011."

That seems like sort of tortured logic, but you could say they set a time bomb to tie the hands of the next administration. The Republican running up of deficits has also seemed to serve that purpose very well. Is it intentional? I don't know, but it is what you can expect from movement conservatives since Reagan.

Posted by: HalMorris | July 19, 2010 9:01 PM | Report abuse

Well done Ezra. The cynicism, hypocrisy, shamelessness is just astounding.

The republicans have truly kicked off their campaign season - they're fully embarked on the "We think you're stupid" tour.

Prove them wrong. Educate yourselves, look at the facts. Prove them wrong.

Posted by: notfooledbydistractions1 | July 19, 2010 9:41 PM | Report abuse

"No one who professes concern for short-term deficits can argue for the extension of these deficit-financed tax cuts and retain credibility on debt issues."

I'll believe that the Democrats mean that sincerely if they let ALL of the tax cuts expire, INCLUDING the ones that took almost half of our country off of the income tax rolls.

Posted by: bgmma50 | July 19, 2010 11:56 PM | Report abuse

The admin better not cave to Republicans on this!

I understand they want dividends and cap gains rates to be 20%, not reverting to pre-bush levels. That's weak sauce...

How much more do we have to give these people at the top? How much more will they extract from us? Why should they pay a lower rate than me? It is disgusting.

Democrats caving to these demands are cowards or traitors.

Posted by: rat-raceparent | July 19, 2010 11:59 PM | Report abuse

Does ahnyone besides me wonder how much the CATO Institute pays Justin Logan to monitor Ezra's blog and argue with people all day?

Posted by: Patrick_M | July 20, 2010 5:48 AM | Report abuse

I just wanted some clarification on the Tax Cuts. From my understanding, they are income tax cuts, correct? So if I'm correct, and correct me if I'm not, but how does a rich person's income negatively effect job creation? I could understand if it was to hike corporate tax, but if the CEO gets $60 mil of his $100 mil salary as opposed to $68 mil, how does this prevent the corporation, a completely seperate entity, from hiring other people?

I'm not taking any sides here, I'm just looking for clarification?

Posted by: CP-TX | July 20, 2010 1:16 PM | Report abuse

Ezra, you are all wrong my man. All wrong:

http://www.thefoldblog.com/2010/07/ezra-klein-is-wrong-on-bush-tax-cuts.html

Posted by: Chris-TheFold | July 21, 2010 4:50 PM | Report abuse

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