The Fight in Congress Over Bush Tax Cuts Has Begun

September 16, 2010 05:22

Congress convenes this week for a last time before the November elections, and the Democrats want to pin Republicans as the party that would risk raising taxes for everyone in the country to protect the tax cuts for the rich. That is absolutely preposterous!

From The Americano

The political boxing match for control of both houses of Congress has now entered its final rounds. The Republican Party has a sizeable lead on points, and Democrats are looking for a knockout punch, or at least for a last minute barrage to even the fight.

President Barrack Obama and White House spokesman Robert Gibbs have made their  fight plan perfectly clear. Attack Republican minority leader John Boehner and the GOP for obstructing the administration’s efforts to keep the Bush tax cuts for the middle class while letting the tax cuts for the wealth elapse.

Congress convenes this week for a last time before the November elections, and the Democrats want to pin Republicans as the party that would risk raising taxes for everyone in the country to protect the tax cuts for the rich.

That is absolutely preposterous!

What the Democrats and the White House do not appear to understand is that in the middle of a recession all tax hikes are bad. What they are proposing is a blatant attempt at class warfare. And what they do not want to understand is that most of those who would pay the higher taxes if the upper tax brackets are raised from 35 to more than 39 percent are the small business owners. The same people that are expected to create the new jobs to pull this economy out of a recession aggravated by Obama’s ineptness as President.

By early Monday afternoon, Republicans had not coordinated their response to the President’s attacks.

In a Sunday talk show, House GOP Leader John Boehner said he would support renewing tax cuts for the middle class but not the wealthy if that was his only choice. That seemed to indicate that Boehner, if pressed for a choice between a tax increase for all, or a tax increase for the wealthy, would succumb to the Democrats pressure tactics.

Also on Monday, however, Senate Republicans announced that they will oppose any effort to renew soon-to-expire Bush administration tax cuts if upper income taxpayers are excluded from the reductions.

A spokesman for Senate GOP Leader Mitch McConnell said the Kentucky Republican has pledges from every Senate Republican to filibuster President Barack Obama’s plan to allow the top income tax rate to rise back to almost 40 percent on family or small business income over $250,000.

Thus at the start of this last legislative session, Republicans in the House and Senate appeared to be divided.

Yet they were not alone. Not all Democrats were in agreement with the Obama proposal. At least four senators, including Birch Bayh of Indiana and Ben Nelson of Nebraska favored extending all of the Bush tax cut.

CNN also reported that Democrats in the House of Representatives were writing a letter to Speaker Nancy Pelossi urging her to temporarily extend all the Bush era tax cuts that are due to expire at the end of this year.

In a draft letter to Pelosi and House Majority Leader Steny Hoyer, these Democrats write, “We believe in times of economic recovery it makes good sense to maintain things as they are in the short term, to provide families and businesses the certainty required to plan and make sound budget decisions. Providing this certainty will give small businesses, the backbone of our economic recovery, confidence and stability.”

Even the administration’s former Budget Director Peter Orszag wrote an op-ed piece in The New York Times last week urging President Obama to accept an extension of the Bush tax cuts for all rackets for two years in exchange for the elimination of all of them by 2013.

Much is at stake in the final rounds of this fight.

The Obama administration wants to paint Republicans as the party who favors the rich and Wall Street. He wants the public to believe Democrats in Congress and the White House are the defenders of the poor and the middle class. Obama has personally launched an attack on Boehner, and The New York Times quickly picked up on the talking points and did a hatchet job on the Ohio Republican over the weekend, saying he was too friendly with lobbyists.

The Times did not say in its story that House Speaker Nancy Pelosi had received larger contributions from lobbyists than Boehner.

In its story, The Washington Post said that the tax-cut debate could be risky for both parties. The Bush-era breaks reduced income taxes for virtually every U.S. taxpayer since their enactment, but to minimize their long-term budget impact they were written to expire this year, leading to what amounts to a $3.8 trillion tax increase over the next decade.

McConnell said Democrats have zero chance of passing Obama’s plan to increase the tax rate for those who make more than $100,000 individually or $250,000 as a family.  He said not a single Republican would support it, leaving Democrats short of the 60 votes needed to cut off a filibuster.

“That’s a debate we’re happy to have. That’s the kind of debate that unifies my caucus from Olympia Snowe to Jim DeMint,” McConnell told the Washington Post, citing the most liberal and most conservative Republicans in the Senate.

Senate Majority Leader Harry Reid  (D-Nev.) and Pelosi (D-Calif.) are pledging to back the President’s position as in sync with the views of a majority of Democrats in each chamber. But amid signs of a weakening economy, a growing number of Democrats would prefer to extend all tax cuts, at least for a year or two – a compromise that Obama did not explicitly rule out during his news conference on Friday.

Another approach that is gaining traction would raise the $250,000 income threshold to $1 million per household, to exempt families who live in regions with high costs of living.

The Washington Post said that half a dozen Democratic senators and Senate candidates have voiced support for a temporary extension of tax cuts for the rich. In the House, more and more incumbents have also taken that position. Among them is Rep. Gary Peters, a Michigan Democrat who represents a traditionally Republican seat in the Detroit suburbs. Peters told the Detroit Free Press last week that extending the cuts “is the right thing to do, as anything less jeopardizes economic recovery.”

The fight is now in its final rounds, and it will be an all out battle between the two sides. The stakes are that high.

The Americano / Agencies

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