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Why White House may cave on Bush tax cuts

By Adam Serwer

Adam Serwer is a staff writer with The American Prospect, where he writes his own blog.

As Greg pointed out yesterday, the White House has been indicating a willingness to "compromise" with Republicans on the Bush tax cuts, making them permanent for those making more than $250,000 a year.

Notwithstanding Speaker-elect John Boehner and House Minority Leader Mitch McConnell's supposed commitment to deficit reduction, what they've committed to here is Keynesian stimulus in the form of tax cuts. The Democrats' preferred path would reduce the deficit, the Republicans' approach would increase it.  As with Boehner's preestablished commitment to more spending on Medicare, political parties put rewarding their constituencies -- in the GOP's case rich people and old people -- above ideology. This is political science 101.

While liberals would prefer to see a fight over extending them only for those making less than $250,000, the administration likely does not want them both to expire allowing Republicans to claim falsely that Obama actually raised taxes. The advantage here is that Republicans could be portrayed as holding middle-class tax cuts hostage to tax cuts for the rich. Might as well show the country that Democrats aren't just whinier Republicans. But given the Democrats' anemic messaging and the poor economy I'd be surprised if it worked out that way.

Last year the president signed a giant tax cut that no one remembers. There must be some temptation in the White House to capitulate knowing that if all the tax cuts are made permanent, the GOP will never let anyone forget that they cut taxes, meaning that this time the administration might actually get credit for them. It would also grant the administration its first major bipartisan accomplishment.

Still, the only thing that matters is the economy. If unemployment is under 8 percent by 2012, Obama could reveal himself to be an advance scout planning a Romulan invasion of Earth and still get reelected. The GOP knows that, which is why, given the logic of their behavior so far, it makes sense for them to say they want to extend all the tax cuts while not actually doing so.

As Jonathan Chait points out, anything the president passes with Republican help will make him more popular. The GOP's desire to put more money in rich people's pockets is in conflict with their stated interest in making Obama a one-term president. Which is why we ultimately may not see anything happen even if Obama gives them whatever they want.

Even if Obama "capitulates" on the tax cuts, then, he wins. The middle class doesn't win. The economy won't be strengthened. But Obama wins, which, from his perspective, makes it worth "losing" this fight. And that's political science 101, too.

By Adam Serwer  | November 5, 2010; 10:34 AM ET
Categories:  2010 elections, House Dems, House GOPers, Senate Dems, Senate Republicans  
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Next: Obama should "pull a Clinton," but what does that mean?

Comments

Sorry Greg but if he caves on giving billionaires & millionaires bush43 era tax cuts he shoots us all in the foot.

He's better off drawing a line, letting Republicans gut the whole thing and blaming Republicans. For my purposes the tax cut I receive isn't so great that honestly I'd prefer to pay the tax to cut the deficit and show the Tea Baggers to be hypocrites and liars.

Framing. This is where we start framing the issues. We let them have this and we are going to lose each and every match up.

Posted by: kindness1 | November 5, 2010 10:57 AM | Report abuse

"While liberals would prefer to see a fight over extending them only for those making less than $250,000, the administration likely does not want them both to expire allowing Republicans to claim falsely that Obama actually raised taxes."

Political science 101? How about the fact that most of the folks who vote don't make over $250k, even fewer make over $500k, while most of them make under--but enough to pay taxes. Why not draw a hard line on individuals over $250k, households over $400k, and propose a big, fat, permanent middle class tax cut (not temporary reduction, not tax credit, not tax rebate, not "3rd Sunday in Months with a 'Z' in them". Make the Republicans hold a big fat tax cut for the middle class hostage in favor of protecting folks who make $250k or $400k or more from a minor marginal increase in their taxes.

Or, the Republicans could offer to cave on extending the tax cuts for the rich by half, if the Democrats agree to make the middle class tax cuts, plus several additional percentage points down, permanent. Republicans? Democrats?

Oh, hang on a second, both parties could apparently couldn't give two shizzles about the middle class. That's right.

Posted by: Kevin_Willis | November 5, 2010 11:00 AM | Report abuse

But ... but ... but what about the DEFICIT? All that debt that we're passing along to our children and grandchildren?

What about Greece? What about the children? OMG! Ar-ma-geddon!

Posted by: pragmaticstill | November 5, 2010 11:03 AM | Report abuse

Fiscally the wisest course is to let them expire.

Politically I can see how it may benefit Obama and the Dems to extend the tax cuts. If the Dems had any messaging skill they could blame the expiration of the tax cuts on the Republicans; after all, the majority of the votes for the tax cuts to expire came from Republicans.

Unfortunately Democrats don't have much in the way of messaging skill. If they did, the perception that Obama has increased taxes, when in fact he has cut them, wouldn't be so prevalent.

Posted by: nisleib | November 5, 2010 11:04 AM | Report abuse

From where I'm sitting this is the case: those making under $250K don't want their taxes raised and would love to hear about a permanent tax cut; those above $250K would be pissed about a tax increase but it wouldn't affect them to go to the higher rates. The POTUS plan has political support; but the Republicans won't do it.

Caving does two things: tax cuts people like, and a platform to run on a responsible plan in '12. The $250K under crowd doesn't care about the tax cuts the rich will get or really care about the deficit through they may say they do. They only care about their economic situation improving and doing things specifically targeted to the middle class is what the White House needs to do.

So yeah, caving as you say is excellent politics.

Posted by: Rhoda | November 5, 2010 11:04 AM | Report abuse

"what they've committed to here is Keynesian stimulus in the form of tax cuts."

Greg, you need to lower your intake of mind altering drugs. NOT taking other peoples money isn't Keynesian. WHERE did you attend college?

Posted by: illogicbuster | November 5, 2010 11:05 AM | Report abuse

I love the fact that somehow Pres. Obama has already played some 11-dimensional chess to sell out the public.

FireDogLake called, they want their shtick back.

And really, can we seriously stop pushing the meme that the ONLY reason Dems didn't adequately convince the public of their agenda is because they suck at messaging? How many hours of news broadcasts were spent on Sarah Palin's facebook posts? How much time did the news media cover Pat Toomey's extreme positions. I seem to recall BOTH this blog and TPM commenting how Toomey didn't get much coverage...yet neither site did any in-depth reporting on the subject either. Oh, and how many of the President's speeches in the final month of the campaign got airtime? Bully pulpit? I guess not, when it never gets mentioned beyond the local news of whatever city he's speaking in.

The idea that if Dems just somehow "stayed on message" that they'd magically start owning the conversation on cable news. It's a load of bullsh*t and it really irks me when liberals/progressives whine and complain solely about messaging. It's even worse when I hear it by liberals/progressive IN the media...who actually may have the ability to try and actually influence the quality of journalism in DC.

No, it's because Dems are bad at talking in front of a camera. That MUST be it.

I'm in a poor mood, obviously. Amusingly enough, not even about the election results...which were completely what I expected - everything but Sestak losing. I really thought he'd pull it out. *shrug*

Posted by: TheBBQChickenMadness | November 5, 2010 11:06 AM | Report abuse

@KW:

"Oh, hang on a second, both parties could apparently couldn't give two shizzles about the middle class. That's right."

Wrong. The GOP and the corporatist "centrist" Dems don't give two shizzles about the MC. On the whole, Democrats fight every single day for the MC. You know that, you just ignore it.

I do think you are right on the money, however (no pun intended) with regards to strategy on the tax cuts. I like both of your compromise positions, Kevin.

Posted by: Ethan2010 | November 5, 2010 11:08 AM | Report abuse

An interesting journey into Greg's world where the Tea Party was a plus for Dems because otherwise they might have lost the Senate too.

So as I follow the logic, compromising on tax cuts, six months AFTER it would have been at least some help in the election, is GOOD policy, whereas 6 months ago it was BAD policy.

Also it will be win for the President, even though they will beat him over the head with the fact that they forced him to capitulate on taxes.

Got it!

Posted by: 54465446 | November 5, 2010 11:11 AM | Report abuse

"It's a load of bullsh*t and it really irks me when liberals/progressives whine and complain solely about messaging. It's even worse when I hear it by liberals/progressive IN the media."

BBQ FTW.

Posted by: Ethan2010 | November 5, 2010 11:12 AM | Report abuse

Taking KW's suggestion a step further, the Dems should propose larger tax cuts for those under $250K per KW but then more of an increase than Bush on those over some number ($500K perhaps).

That would be more like the USA that John Boehner remembers, no?

Bottom line, pragmatically speaking, is it's time for the Dems to get out in front on some issue, ANY issue and the President needs to lead the way.

Posted by: pragmaticstill | November 5, 2010 11:18 AM | Report abuse

TheBBQChickenMadness

Messaging, to me, does not refer to just "staying on message" or being good in front of a camera. That is part of it, but only part.

To me it is more about working the refs than anything else. The right excels at getting the media to cover stories that benefit the GOP. Even if those stories are stupid and redicules, if the GOP wants the media to make a big deal out of them, the media obliges.

The Dems, on the other hand, can't even get the media to report on basic facts. What good (politically) does it do to pass a tax cut for 95% of Americans if, upon receiving instructions from the GOP, the media reports that taxes went up?

Posted by: nisleib | November 5, 2010 11:20 AM | Report abuse

It is a sad testament to the ugly philosophy that is liberalism that liberals cannot countenance allowing people to keep their money.

The need to confiscate and spend other people's money is all that liberalism amounts to. How sad for its proponents that they've woven a web of deceit and denial around this very obvious fact.

Arguments about the deficit are just self serving distractions, part of the deceit and denial. The deficit exists because spending exceeds the amount the congress is currently confiscating from the citizens. Since liberals MUST spend, they must, therefore confiscate. Apparently they cannot bring themselves to spend less.

Nothing in Adam Serwers daily dose of misinformation speaks to spending cuts at all. yet spending was a prominent concern of voters in Tuesday's election. Hello, Mr Serwer, there are two components to the deficit and spending is the one that has the voters most enraged.

Liberals, it seems, just don't get it. How many watched that nasty SOB Chrissie Matthews harrangue of a congressperson about what spending should be cut? To me that's just a liberal's way of saying "See, nothing can be cut, now shut up and give us your money."

Posted by: skipsailing28 | November 5, 2010 11:20 AM | Report abuse

The White House is:

a) Ready to borrow money to extend tax cuts for the rich
b) ready to cut social security for those who need it
c) In court aguing that the separation between church and state is unenforceable
d)defending the banksters who trashed the economy and are now ignoring the law in their rush to foreclose on as many Americans as possible
e) printing hundreds of billions of dollars to aid Wall Street and the same banks they already rescued once
f) not even pretending to give a hoot about unemployment.
g) protecting torturers, expanding the security state and fighting transparency and access to information even harder than Bush did.

Given the above, I think Obama's going to have a much easier time with a Republican House than a Democratic one. Based on the evidence instead of the rhetoric, Boehner's agenda is much closer to Obamas than Pelosi's was.

Frankly I'm up in Canada watching America eat itself alive. As someone who had real hope for Obama, I am more than bitterly disappointed, I am now convinced that the American rich will successfully destroy both functioning American democracy and the world economy. Karl Marx is laughing in his grave.

Posted by: Bullsmith1 | November 5, 2010 11:27 AM | Report abuse

"Liberals, it seems, just don't get it. How many watched that nasty SOB Chrissie Matthews harrangue of a congressperson about what spending should be cut? To me that's just a liberal's way of saying 'See, nothing can be cut, now shut up and give us your money.'"

Skip, it's not that we want to take your money, and it's not that nothing can be cut. There is a choice in what is cut, and a person's/party's priorities can be revealed in what they're willing to cut. I would gladly go back to the tax structure under Clinton; yes, I was taking home more $$ under Bush (slightly)with his tax cuts, but I felt a lot less secure with the economy around me. Now I know why I was feeling less secure--we were! Roll back all of the tax cuts and reduce the deficit. Isn't reducing the deficit the new black??

Posted by: Michigoose | November 5, 2010 11:30 AM | Report abuse

@Skip: "The need to confiscate and spend other people's money is all that liberalism amounts to"

What do you think motivates that "need", Skip?

I'd seriously like to know your thoughts on that.

Posted by: Ethan2010 | November 5, 2010 11:32 AM | Report abuse

I think everything the Republicans say and do has to be understood in the context of the state of the economy in 2012. If unemployment is still 9.6 % then, I think both parties will pay a major price. I wouldn't guarantee a Republican President and certainly not a Republican Congress. If unemployment is 8-9 %, there would be an argument, not a credible one but an argument nonetheless, that the economy turned around once Republicans took Congress, but Obama screwed things up so badly 2008-2010 that there was a deeper hole to dig out of. If unemployment is less than 7%, Obama wins in a walk. 7-8% is the battleground.

So, for the Republicans, they have a window of unemployment which benefits them the most. Maybe 8-8.5 % or so. That's what they're aiming for. Everything else is dialogue.

Posted by: klautsack | November 5, 2010 11:37 AM | Report abuse

Klautsack,

Spoken like a true cynic. :-)

Unfortunately, you may be right. I'd like to think that politicians wouldn't be so callous, but then I'm a bleeding heart liberal.

Posted by: Michigoose | November 5, 2010 11:40 AM | Report abuse

“The deficit exists because spending exceeds the amount the congress is currently confiscating from the citizens.”

And that spending is bad? Are you saying we shouldn’t spend more than the rest of the world combined on our military? I’d agree with you on that. Are you saying Medicare Part D is your ideal image of how a bill should be done: Commit to mass spending without finding offsetting spending cuts or revenue sources? I would NOT agree with you on that.

“Since liberals MUST spend, they must, therefore confiscate. Apparently they cannot bring themselves to spend less.”

Neither can Republicans.

“Nothing in Adam Serwers daily dose of misinformation speaks to spending cuts at all. yet spending was a prominent concern of voters in Tuesday's election.”

Yes, it was a prominent concern. Yet the GOP hasn’t come up with spending cuts that would do squat. They, generally, aren’t willing to cut entitlement spending or military spending, which leaves a very small portion of the budget available for cuts.

“Hello, Mr Serwer, there are two components to the deficit and spending is the one that has the voters most enraged.”

And yet when you ask those voters what they want to cut what do they say?

“Liberals, it seems, just don't get it. How many watched that nasty SOB Chrissie Matthews harrangue of a congressperson about what spending should be cut? To me that's just a liberal's way of saying ‘See, nothing can be cut, now shut up and give us your money.’”

Oh, we get it. It is wingnuts who want to balance the budget by giving tax cuts to Paris Hilton that don’t get it. And Matthews asking a congresscritter for specifics is over the line for you? Really? You must cherish your ignorance.

Posted by: nisleib | November 5, 2010 11:43 AM | Report abuse

@Ethan2010: "Democrats fight every single day for the MC. You know that, you just ignore it."

I'm sure they pay you well, so in your case it might be true. For the rest of that, that's just BS. I just gave one example (and there are many) of the strategies the could take, if they really want to fight for the middle class.

I've been in the middle class all of my life. Sometimes lower-middle, sometimes middle-middle, but always in the middle class.

The Democrats aren't fighting for me. And they never have. Not in my life time. If you don't get that, there's nothing I can say to make you get it. But it's true, and I know it's true, and no amount spin is going to change that.

And the politics involved with the Bush tax cuts, and how the Democrats are choosing to deal with that, is a perfect example of how little the Democrats think about the middle class. And how they wouldn't think of them (much less fight for them) at all, if politics didn't obligate them to do so. Or at least pretend to do so.

But the Democrats aren't fighting for me. And they never have.

Posted by: Kevin_Willis | November 5, 2010 11:54 AM | Report abuse

All, my take on whether Obama should "pull a Clinton":

http://voices.washingtonpost.com/plum-line/2010/11/obama_should_pull_a_clinton_bu.html

Posted by: Greg Sargent | November 5, 2010 11:55 AM | Report abuse

"The Democrats aren't fighting for me. And they never have."

That's because the policies you (i.e. Republicans) want HURT the middle class. So of course you don't feel that the Dems are fighting for you!

Your post is just further evidence that you, consciously or subconsciously, ignore all the vigorous efforts extended by the Democratic Party towards the Middle Class. Suit yourself, Republican voter.

Posted by: Ethan2010 | November 5, 2010 12:00 PM | Report abuse

@pragmatic: "Taking KW's suggestion a step further, the Dems should propose larger tax cuts for those under $250K per KW but then more of an increase than Bush on those over some number ($500K perhaps)."

I'm in favor of a more progressive tax structure. So, instead of letting the Bush tax cuts expire, change it so $250k to $500k, pays an additional 1%, $500k to $750k pays an additional 1% on top of that, $750k to $1m pays an additional 1% on top of that, $1m to $5m pays an additional 1% on top of that, up to where the top marginal rates (keeping in mind marginal rates aren't a tax paid on every dollar, but just every dollar above a certain amount) of about 50%. Then, reduce middle class tax cuts by 10%. Something they could really feel. And spend. In the larger economy.

However, my fellow Republicans aren't going to go in that direction, and, frankly (because, as I said, pretend though they might, Democratic politicians generally don't give a sh** about the middle class), they aren't proposing anything like that, either.

Posted by: Kevin_Willis | November 5, 2010 12:02 PM | Report abuse

I agree with those who have commented on messaging and reframing. I think the argument that the Democrats are just poor at communicating their achievements is a bit naive, given the barrage of 24 hour disinformation that comes out in favor of the GOP....and the reticence of much of the real media to stand up and correct it.

Greg, however, is a welcome exception.

That being said, I do think the tax cuts issue is the perfect moment for the President to take the reins and point the back end of the horse towards the Republicans.

After the end of the year, it needs to be made loud and clear that any tax benefits received by any American taxpayer are called the Obama tax cuts. The Bush tax cuts expire, and should be gone, abolished, forgotten. End of story.

So right now the talk of extending the Bush tax cuts should be stopped. If the President wants to appear to compromise a bit on HIS new tax cuts, fine. But he should set the tone, frame the debate and control the outcome. I still think he can do this by focusing on the middle class, even if he gives in a bit by giving the top earners an extremely small break that will still have to called an Obama tax cut for all Americans.

Posted by: elscott | November 5, 2010 12:06 PM | Report abuse

@michgoose: "Unfortunately, you may be right. I'd like to think that politicians wouldn't be so callous"

No worries. Only 90% of them actually are. The remaining 10% actually do try and fight the good fight. ;)

The numbers presented above, btw, are highly scientific.

Posted by: Kevin_Willis | November 5, 2010 12:06 PM | Report abuse

http://www.washingtonmonthly.com/archives/individual/2010_11/026493.php

Skip, here's one of the places I would start with spending cuts (and I'm a veteran, so I know that Gates is right and there's all SORTS of cuts that could be made to the DOD budget without impacting readiness). What would you cut? When the Republicans get on national TV and refuse to give particulars they do nothing to forward an agenda (let alone their agenda). That's not governing, and it's not behaving like an adult.

Lead, follow, or get the hell out of the way.

Posted by: Michigoose | November 5, 2010 12:09 PM | Report abuse

@KW:

This is from the Middle Class Task Force annual report (Feb 2010):

...the Task Force has been actively working on several of the issues that are most important to the aspirations and everyday lives of middle-class families, including access to higher education, balancing work and caregiving obligations, retirement security, and high-quality jobs for middle-class workers. This report will also discuss a number of important new initiatives in your Fiscal Year 2011 Budget that are designed to address these core middle-class issues, including the near-doubling of a tax credit to help middle-class families offset the rising costs of child care and a proposal to significantly lower student loan payments.
Our report examines the economic origins of the middle-class squeeze, including the growing gap between productivity and middle-class incomes, the dramatic rise in economic inequality, and the challenge of balancing work and family responsibilities as women’s earnings have become increasingly important to middle-class families.

http://www.whitehouse.gov/sites/default/files/microsites/100226-annual-report-middle-class.pdf

Also read the Executive Summary (pp iii - vi).

If you read that and still think that Democrats aren't fighting to support the Middle Class, then imho it would be factually accurate to suggest that you're misaligned in one way or another with what it means to be MC in the USA.

Posted by: Ethan2010 | November 5, 2010 12:09 PM | Report abuse

@Ethan2010: "Your post is just further evidence that you, consciously or subconsciously, ignore all the vigorous efforts extended by the Democratic Party towards the Middle Class."

Pretty easy to ignore something that doesn't exist.

"Suit yourself, Republican voter."

Hey, I've voted for Democrats twice. At least. Once for governor, and once for Senate (Harold Ford, Jr.).

Posted by: Kevin_Willis | November 5, 2010 12:10 PM | Report abuse

in response to this from Michigoose:
=================
Skip, it's not that we want to take your money, and it's not that nothing can be cut. There is a choice in what is cut, and a person's/party's priorities can be revealed in what they're willing to cut. I would gladly go back to the tax structure under Clinton; yes, I was taking home more $$ under Bush (slightly)with his tax cuts, but I felt a lot less secure with the economy around me. Now I know why I was feeling less secure--we were! Roll back all of the tax cuts and reduce the deficit. Isn't reducing the deficit the new black??

======================

In a perfect world, your point about spending priorities would make complete sense. Having such a discussion with an inveterate liberal blow hard like Matthews makes no sense. He isn't about helping Americans understand their world, he's about advancing the liberal agenda. Therefore his question isn't honest at all. He's looking for fodder for left wing demagoguery upon which the Democrats rely.

Republicans and conservatives are right to shun his question, because it isn't honest. His agenda is clear and any suggestion made on his show will be countered in seconds by folks who simply cannot stop spending money.

Now, let's talk about the Bush years. Congress behaved during the Bush years much like it behaved during the Reagan years. In both cases taxes on Americans were reduced. In both cases congress spent lavishly, with abandon. Americans, liberals in particular, seek to blame the president for deficits and some of that blame is deserved. But ultimately the constitution makes it clear that congress spends the money. article 1 section 9: "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time."

What the Democrats and liberals simply refuse to acknowledge is that conservatives began throwing out spend thrifts and objecting to the spending well before the 08 election. in 06 some republicans lost their jobs because they refused to adhere to spending discipline. It is my belief that the disgust felt by conservatives had a large impact on the subsequent Democrat victories.

Sadly, America learned that neither group can be completely trusted at this point. Those of us who already have busy lives now have to watch our congress too.

What a shame.

Posted by: skipsailing28 | November 5, 2010 12:11 PM | Report abuse

Ding ding ding ding ding -- we have a winner! KW and I agree on something!

I'm in favor of a more progressive tax structure. So, instead of letting the Bush tax cuts expire, change it so $250k to $500k, pays an additional 1%, $500k to $750k pays an additional 1% on top of that, $750k to $1m pays an additional 1% on top of that, $1m to $5m pays an additional 1% on top of that, up to where the top marginal rates (keeping in mind marginal rates aren't a tax paid on every dollar, but just every dollar above a certain amount) of about 50%. Then, reduce middle class tax cuts by 10%. Something they could really feel. And spend. In the larger economy.

However, my fellow Republicans aren't going to go in that direction, and, frankly (because, as I said, pretend though they might, Democratic politicians generally don't give a sh** about the middle class), they aren't proposing anything like that, either.

Posted by: Kevin_Willis | November 5, 2010 12:02 PM

But what would you say KW if the President proposed this and the Dems got behind it?

Posted by: pragmaticstill | November 5, 2010 12:14 PM | Report abuse

"Pretty easy to ignore something that doesn't exist."

See my post at 12:09 PM.

Read the intro and exec summary I posted!

If you STILL feel that the administration's efforts to support the MC "don't exist," then please tell me what policy issues or areas they are neglecting.

Posted by: Ethan2010 | November 5, 2010 12:16 PM | Report abuse

@Ethan2010: "This is from the Middle Class Task Force annual report (Feb 2010):"

If something moves from bloviation into that something that actually has a positive impact in my life, I will happily concede that the Democrats have finally actually tried to do something, as opposed to paying lip service.

"If you read that and still think that Democrats aren't fighting to support the Middle Class, then imho it would be factually accurate to suggest that you're misaligned in one way or another with what it means to be MC in the USA."

Then I must be misaligned. But, really, who am I going to believe? A government task force's preliminary report and executive summary, or my own lying eyes?

Posted by: Kevin_Willis | November 5, 2010 12:16 PM | Report abuse

"A government task force's preliminary report and executive summary, or my own lying eyes? "

I guess passing health care reform and student loan reform -- not to mention the tax cuts for working families in the stimulus -- don't count?!?!?

Mmmhmm.

The report was from Feb 2010 before either were passed. Now that those MC priorities have been passed your excuse is pretty lame. Unless, again, you are stubbornly still under the impression that your right-wing policy views are the norm among America's MC. They clearly are not. Your ideological leaning prevents you from seeing the truth about the MC. The truth is that health care reform and student loan reform are two of the biggest successes for the MC in the country over the last decade at least.

Posted by: Ethan2010 | November 5, 2010 12:26 PM | Report abuse

elscott wrote:

"That being said, I do think the tax cuts issue is the perfect moment for the President to take the reins and point the back end of the horse towards the Republicans.

After the end of the year, it needs to be made loud and clear that any tax benefits received by any American taxpayer are called the Obama tax cuts. The Bush tax cuts expire, and should be gone, abolished, forgotten. End of story.

So right now the talk of extending the Bush tax cuts should be stopped. If the President wants to appear to compromise a bit on HIS new tax cuts, fine. But he should set the tone, frame the debate and control the outcome. I still think he can do this by focusing on the middle class, even if he gives in a bit by giving the top earners an extremely small break that will still have to called an Obama tax cut for all Americans."

I am guessing you're a university professor, or perhaps write for a living, am I correct?

Posted by: 54465446 | November 5, 2010 12:26 PM | Report abuse

@pragmaticstill: "But what would you say KW if the President proposed this and the Dems got behind it?"

That I'm voting Obama in 2012. I already like Obama more than almost any conservative I know.

But the rest of the Dems would still have a lot of splainin' to do. You can't have sex with every member of the Journey tribute band, "Don't Stop" and two old boyfriends and then buy me a used X-Box and assume it's all water under the bridge. :P

And I really don't undertand why they won't propose something like it. Where is the political downside? Even most supply-siders can't get too worked up over folks who are already multimillionaires paying an extra 5% in taxes on the latest million dollars in income--but not even on that, but on the 750k+ after the first 250k. Not in terms of individual voters.

And I'd also like to see a corporate tax cut (not rebate, not credit, not temporary incentive) on companies with $1.5 million or less in gross revenues. May with less than $2.5 million? So much hiring (and, alas, firing) goes on in that segment of small business. And closing loopholes on giant corporations that allow them to do billions of dollars of business in America and yet pay nothing in corporate income taxes.

I'm sure the Democrats are on it.

Posted by: Kevin_Willis | November 5, 2010 12:28 PM | Report abuse

While the Dems still have control of the House and the Ways and Means Committee for the next couple of months, they should come out with two separate bills. The first should extend the Bush tax cuts to those who earn under $250,000. The second should do the same for people at $250,000 and up. If the Republicans block the first bill, they are going to look really ugly. If both bills pass, Obama ought to veto the second one.

Posted by: mthand111 | November 5, 2010 12:30 PM | Report abuse

It's probably time for Obama to cave on extending the Bush cuts to the marginal tax bracket rates, and shift to a new approach. First, he should loudly insist on also keeping the income tax cuts that he has provided and that nobody knows about. Second, he should insist on the income tax proposals that he has made other than changing top marginal tax bracket rates (there are several, including the AMT and capital gains taxes). Third, in early 2011, he should launch a campaign to pass legislation to close loopholes allowing tax-avoidance by the super-rich and corporations and to create a new top tax bracket (50 percent was the top rate for most of Reagan's presidency) on income over a million/year. Additional steps to address long-term budget challenges surely will be debated after the commission report in December and arguments probably will continue into the 2012 election campaign.

Posted by: pjro | November 5, 2010 12:37 PM | Report abuse

michigoose:

I don't even have to follow the link to know that the spending cut you mention is something defense related.

that's just another "feature" of liberalism. Spending money on defense is simply bad, according to them. Given the choice between section 8 housing and protecting America, liberals will chose the former each and every time.

If the republicans don't propose spending cuts I will be quite surprised. There is much evidence that this is a topic given a lot of consideration of late. Both Paul Ryan and the Heritage Foundation have produced good conversation starters.

I know a few places I would cut immediately: Dept of Energy, Dept of Agriculture, Dept of Education, EPA. I'd hack them all back as close to zero and is politically feasable. I'd do that today if I were in charge. But I'm not, so we'll see.

Ethan:

I'm not a psychiatrist and I didn't stay in a holiday inn express last night. I have no earthy idea what motivates you. I don't concern myself with the motivation of others all that much. why? Because as a businessman I understand that behavior is all that others can see and measure. I can't read minds but I can see and measure actions. So when spending rises precipitously with a solidly Democrat government and the discussions held by Democrats revolve around increasing taxes I can safely conclude, based on solid, visible, quantifiable evidence that liberals are all about confiscating money from others to spend as they see fit.

The "why" behind this may be interesting as an academic discussion, but I'd rather focus on modifying the behavior of the government. As in less spending and less taxes.

Posted by: skipsailing28 | November 5, 2010 12:47 PM | Report abuse

@Skip:

"I have no earthy idea what motivates you."

So in other words you admit that you have no idea what you're talking about. Got it, thanks. (But we knew that already.)

"So when spending rises precipitously with a solidly Democrat government"

Ignoring the Great Recession much? You would have preferred the government did nothing and America spiraled into a Depression? And you call yourself a businessman? Hilarious. And yet, at the same time, it really is sad.

Posted by: Ethan2010 | November 5, 2010 1:02 PM | Report abuse

@Ethan

Skip may not know what motivates you, but it was only a few days ago that he knew why a Spanish speaking woman cried for joy when she found out it was pregnant even though he was only hearing about the story second hand.
I'm not sure why his knowledge of what motivates individuals extends only to pregnant spanish speakers.

Posted by: ashotinthedark | November 5, 2010 1:11 PM | Report abuse

Touche ashot. Well done. I did speak to the motivation of the mexican lady. Not Spanish, mexican. Why? Because I was informed of what it was by the man who heard the discussion first hand. he knew what the motivation was because he heard the lady and her friends say it.

And when Ethan tells me his motivation I'll know what he says his motivation is.

sorry that you have so much trouble believing that people are screwing the system for their own advantage. I understand that when people complain about the net result of the various liberal transfer schemes they are just lying or expressing their inner racism or whatever denial mechanism helps you sleep at night.

But I live in the hood. I have watched liberalism destroy American families and American lives. In the Gospel according to matthew Jesus said: wisdom is proved right by her deeds.
Even Jesus agrees with my focus on behavior rather than motivation. Amazing, no?

What wisdom is there in what I see everyday? Liberalism is an expensive failure. Denying that illegals game the system for personal advantage is tantamount to denying human nature.

Posted by: skipsailing28 | November 5, 2010 1:33 PM | Report abuse

@Skip: "And when Ethan tells me his motivation I'll know what he says his motivation is."

Right, because I haven't made my motivations clear in like 2 years of blogging on PL.

So funny.

Posted by: Ethan2010 | November 5, 2010 1:38 PM | Report abuse

Forget about tax cuts. Gut the IRS and institute the only fair method of taxation....Consumption.

Posted by: tnulta | November 5, 2010 2:17 PM | Report abuse

54465446,

Yes, you are correct about both, however, only one of those at the present time.

Posted by: elscott | November 5, 2010 2:27 PM | Report abuse

Skip
"he knew what the motivation was because he heard the lady and her friends say it."

How do we know she's Mexican again? Was she wearing a Mexican flag or did she declare her country of citizenship at the same the she mentioned that her shouts of joy were specifically motivated by her child's future citizen status? You never said your neighbor had such intimate knowledge previously, but if you say so.

It still doesn't explain why the friends were excited and it makes the Mexican woman who is smart enough to game the system seem pretty dumb. Why? Because being pregnant in the US doesn't guarantee you or your unborn child citizenship in the US.

"sorry that you have so much trouble believing that people are screwing the system for their own advantage."

I have never doubted that people screw the system. I think we would differ on how widespread such abuses are and who is responsible, but I don't recall arguing that it never occurred. I just doubted whether you had knowledge that this particular woman was one such person and that screwing the system is what made her shout for joy as opposed to being joyous over the birth of a child. Call me naive.

"I understand that when people complain about the net result of the various liberal transfer schemes they are just lying or expressing their inner racism or whatever denial mechanism helps you sleep at night."

It appears any such liberal wealth transfer schemes have been wildly unsuccessful so I'm not sure why they bother you so much. All the numbers reflect that any liberal attempts to spread the weatlh around have had the exact opposite effect. I've never called you racist so keep hiding behind that strawman.

Posted by: ashotinthedark | November 5, 2010 2:51 PM | Report abuse

The Republican Congress passed the law that rescinds the tax cuts at the end of 2010 -- why doesn't Obama simply drive home the point that they raised taxes in 2010 by their action in 2002. Because Obama can't seem to make any point any more.

Posted by: BlueSquareState | November 5, 2010 6:36 PM | Report abuse

BlueSquareState...In 2002 the only way to get the tax cuts past the Democrats was to include the 2010 expiration date. The Republicans did not want the expiration date, but recognized that once enacted, it could be extended if they had control, and would be a difficult political problem to allow to expire if the Democrats had control. A "win-win" for the thinking party.

Posted by: tnulta | November 5, 2010 7:12 PM | Report abuse

I've supported him throughout his presidency, though I originally supported Kucinich as a candidate. I voted for Obama, cheered his inauguration, and I have defended his policies. But if he caves on this issue, he will NOT get my vote in 2012, even if I have to vote 3rd party or not at all to avoid it.

That is the absolute line drawn in the sand, for me.

Posted by: Tara12 | November 6, 2010 1:27 AM | Report abuse

This is one area where the president should not compromise--

The republicans are lying conniving thieves who cater to the wealthy and could care less about the deficit.

The wealthy have done just fine during this recession-- what with the bail outs and two wars from which to prosper, time for them to pay us back

Posted by: hotpoet66 | November 7, 2010 3:10 PM | Report abuse

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