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Posted at 3:36 PM ET, 11/30/2010

More meetings, more problems

By Ezra Klein

PH2010112906125.jpg

In what Sam Stein calls "a classic Washington solution to an intractable political standoff," Tuesday's meeting between President Obama and the Republican congressional leadership didn't end in a deal on the soon-to-expire Bush tax cuts or unemployment insurance benefits. Rather, the meeting ended with a proposal for . . . another meeting, this one led by Treasury Secretary Tim Geithner and Office of Management and Budget Director Jack Lew and including one Senate Republican, one Senate Democrat, one House Republican and one House Democrat. It's the Noah's Ark strategy for political compromise.

But what's the point of it? The White House has made the Bush tax cuts Jack Lew and Tim Geithner's problem. Last week, they were Congress's problem. The administration had a clear policy -- permanent extension of the cuts for income under $250,000 and immediate expiration of the cuts for income over $250,000 -- and the Senate Democrats didn't seem able to muster the votes to get that policy passed. Now the administration is yoking itself to negotiations in which no outcome, or a bad outcome, will be blamed on it.

And from its perspective, the only two possibilities are no outcome or a bad outcome. The White House's position is clear, and so is the fact that it doesn't have 60 votes. Republicans are fresh off a major victory and in no mood to compromise. Lew and Geithner don't actually have votes in the Senate and presumably don't have a ton of spare time on their hands. Why didn't the administration just let Congress figure this out and then use the bully pulpit or the veto pen if the compromise proved unacceptable? Instead, administration officials have taken a tough problem that's going to lead to a resolution that makes everyone unhappy and made it their tough problem that will lead to a resolution that makes everyone unhappy at them.

Photo credit: Saul Loeb Photo

By Ezra Klein  | November 30, 2010; 3:36 PM ET
Categories:  Obama administration  
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Next: The tax cuts vs. the pay freeze

Comments

The White House's position is NOT clear. The only correct action is to:

1. Propose and push a law making the current tax rates for incomes below $250,000 permanent.

If the Republicans want to filibuster, let them do it and explain why my taxes are going up in January.

2. Extend unemployment benefits indefinitely till the unemployment rate gets down to 7 or 7.5%

If the Republicans want to filibuster, let them explain why monies that are spent immediately have no economic benefit.

Posted by: AMviennaVA | November 30, 2010 4:08 PM | Report abuse

Yay! More taxes for everybody!!!

Posted by: will12 | November 30, 2010 4:20 PM | Report abuse

Ezra - if you use that Google Thingy with Evernote, have you not published lots of polls that said Americans didn't even know they got a temporary tax cut with the stimulus that is now also expiring?

My position - let them all expire. Those making less than 250k won't notice and the rich will get their reward for not making the Republicans get a deal.

If you freeze wages for deficit reduction and let the tax cuts for the rich extend, you have lost the principles of the Democratic party and game over.

Posted by: CubeRulescom | November 30, 2010 4:20 PM | Report abuse

If you let them all expire it won't just be a small difference in your pay check. It will effect the Estate tax (aka the death tax) which will reset to all those estates above one million will be heavily taxed. Now my family, we are a middle class family, but because of the neighborhood my mother has lived in for 33 years is now 'trendy' her house ALONE puts her over that limit. Why should we be taxed at such a level when we don't have the income to support it. Also there are a number of families in our situation, or who due to their incomes now qualify, unjustly, for the AMT tax which is a huge burden.

My question is, I get confused as to the extension time-line, if they extend all of them even for the extremely wealthy, and they are talking about time-lines from 1 to 3 years, would that mean that all of the taxes would be temporarily extended, and this negotiating would have to be repeated, or do you think they will actually be able to permanently extend the tax cuts for those under $200,000/$250,000?

It seems to me that extension for those under that level is a shared idea for both Dems and Reps.

Posted by: lnw80050 | November 30, 2010 5:03 PM | Report abuse

Maybe Ezra can explain why the Republicans were able to pass the Bush tax cuts under reconciliation with 50% of the vote, while Democrats for some reason either cannot or refuse to do that.

Posted by: urbanlegend | November 30, 2010 5:20 PM | Report abuse

Logic is simple...if both Dems and Reps agree to A
but don't agree to A+B
then only A gets passed because of agreement

Politics is mean-spirited bully stuff:
since both Dems and Reps
fail to agree on A+B
then nothing gets passed and we get chaos

Posted by: Moldy | November 30, 2010 5:26 PM | Report abuse

let all the tax cuts expire, and blame it on the GOP for being stupid.

Posted by: FranknErnest | November 30, 2010 5:39 PM | Report abuse

No need to compromise here. Hold votes on each item and let the chips fall. Of course, the fiscally and economically responsible thing to do would be to return to the tax rates of America's most prosperous years from the end of WWI to 1908, but no one is suggesting that. It makes too much sense.

Posted by: mcstowy | November 30, 2010 5:47 PM | Report abuse

That should be "the end of WWII to 1980." Not bad history, just clumsy.

Posted by: mcstowy | November 30, 2010 5:52 PM | Report abuse

Seems like to me that the Democrats could put forward a bill to make the tax cuts for those making less than 250K permanent, and let the GOP vote against it if they want.

The GOP would have a tough time explaining why the held middle class tax cuts hostage in order to get wealthy tax cuts.

Posted by: Benson | November 30, 2010 6:04 PM | Report abuse

Once again Obama plays doormat. On the morning of this meeting Boehner and McConnell come out with an Op-Ed in your paper blatantly misrepresenting what "the American people want", i.e., extension of all tax cuts, when the polls plainly show they don't want extensions for top incomes. How is this bipartisanship when they start the day with reiteration of their Big Lie? Where is the White House pushback on that sort of preemptive nonsense? Why can't they recognize bad faith when it hits them in the nose and why can't they call it for what it is?

Posted by: jtmiller42 | November 30, 2010 6:21 PM | Report abuse

Ezra--You mention that the Democrats do not have 60 votes needed to pass an extension of the Bush tax cuts for just those making under $250,000. What I do not understand at all, however, is why reconciliation cannot be used to pass the Democrat's tax proposal?! That would only require 51 votes, and would have a strong chance of passing.

The Bush tax cuts were originally passed by using reconciliation, and the issue of taxes obviously effects the federal budget, so reconciliation is undoubtedly a perfectly valid legislative maneuver to employ. Additionally, because the Republicans initially used it to pass the Bush tax cuts, they would be total hypocrites if they objected to the Democrats using it.

Posted by: cullenvolvo9 | November 30, 2010 6:24 PM | Report abuse

@will12
This is not about everybody. It wasn't originally and it's not now. These are not new tax cuts that might stimulate the economy, they're old tax cuts that wrecked the economy. They helped eliminate jobs - not create them.

Posted by: tm13 | November 30, 2010 6:39 PM | Report abuse

If Congress allows the current estate tax law to lapse, it will hit farming and ranching families hard including mine. Most farms and ranches are asset rich and cash poor. It forces families to liquidate the very assets so key to their farm or ranch.

As for taxing heirs, farm and ranch-raised kids have more than earned their inheritance growing up and working on their family farm or ranch.

Posted by: hbuckmaster | November 30, 2010 7:32 PM | Report abuse

I'm surprised you've gone in for this line of thinking Ezra, you're usually better than this. You say the Administration has taken a problem that isn't theirs, and made it theirs: of course that's not right. It's the Administration's problem anyway. If tax rates for everyone go up, everyone will blame Obama, to some extent, regardless of how involved he was in the process or how much Administration officials bleat that it was the Republicans. That's how the Presidency works: opponents blame you for everything bad in the world, supporters praise you for everything good in the world. As Ezra Klein would normally point out, political messaging isn't as important as people think it is.

Posted by: bigmandave | November 30, 2010 7:36 PM | Report abuse

Once again Obama is having to make the best of a bad situation created by incompetence in the Congressional Democratic party. He wont be able to just blame the GOP because Senate Dems arent united behind him. It is my understanding that reconciliation cant be used because the House refused to pass a FY2011 budget resolution which would provide the basis for using reconciliation. There is just no way for this to just be Congress' problem and not his.

Posted by: gregspolitics | December 1, 2010 12:27 AM | Report abuse

Why not let the tax cuts expire and then, next Congress, pair negotiations for a decrease with a demand for stimulative spending? Yes, there will be more Republicans in Congress, but expiration means that:
A. Failure to reach a compromise doesn't result in long-term fiscal disaster
B. The Democrats are in a stronger negotiating position, because either outcome is a win for them

Posted by: WHSTCL | December 1, 2010 4:45 AM | Report abuse

What trickles down from the voodoo economics of the Republicans would be censored here.
The fact is that the Republicans and any democrats that voted for the Bush tax cuts are the ones who voted for the tax rate to increase NOW. Why did you vote for the tax rates to go up at the end of this year Mr./Ms.Republican? Oh, you used reconciliation to pass the tax cuts, why?
So you could only increase the deficit dramatically for ten years by statute. So are the tax cuts you voted to expire in 2010 the reason our economy is in such great shape?

Posted by: overandone | December 1, 2010 7:16 AM | Report abuse

No difference between GWB and Obama. Bush got into the White House by promising that he was going to empower the bible thumpers, but he lied and instead cut the taxes of those who could afford to invest by 50%. One of Obama's key talking points was the elimination of those tax cuts for wealth but yesterday he showed us that a politician of any color is just another money grubbing pimp. Will 90% of Americans stand for being constantly raped by the other 10% for much longer? Tune in next week when Butch Higgins says, "Wadda ya mean I gotta git outta my house?"

Posted by: jerzbil | December 1, 2010 9:48 AM | Report abuse

Messr. Klein has failed to do his homework. From CNN:

"December 19, 1995
Web posted at: 11:45 p.m. EST

WASHINGTON (CNN) -- In the first meaningful discussion since Friday's budget negotiations exploded in acrimony, President Clinton and Republican leaders Newt Gingrich and Bob Dole began a singular attempt Tuesday to surmount their differences. By the end of the day, both parties saw hope of ending the budget stalemate before the start of the new year.

After a lengthy Oval Office meeting Tuesday, the three leaders agreed they would meet again Wednesday to try to work out a seven-year balanced budget agreement.

Dole and Gingrich called the two-hour meeting with Clinton and Vice President Al Gore "constructive," and said they will decide Wednesday whether to act on a temporary spending measure to return 260,000 idled federal workers to their jobs.

Dole said Congress might agree to fund the government through December 27 or 28.

Clinton's talks with the Republican leaders was followed up by a meeting between White House chief of staff Leon Panetta, House Budget Committee Chairman John Kasich of Ohio and Senate Budget Committee Chairman Pete Domenici of New Mexico. Panetta said the talks would continue Wednesday."

The same sort of thing happened 15 years ago. Obama has simply avoided a full year of posturing.

BB

Posted by: FairlingtonBlade | December 1, 2010 10:10 AM | Report abuse

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