The economy is sputtering, and either nobody knows what to do about it or everybody knows what to do about it. Of course, it doesn’t matter whether nobody knows how to fix it or everybody knows how to fix it because even if everybody knows how to fix it, everybody also has their own plan, which means that nobody really knows what will work.
But, I think many people would agree, at the very least, that all of the uncertainty we have in the economy is not helping. If you want people to spend, business to invest, companies to hire, it helps if they have some idea as to what is probably going to happen in at least the near future. Obviously, you can never know for certain. If you could, you’d go to Las Vegas, make some bets and retire. But even if we can’t eliminate all uncertainty, we ought to be able to eliminate some of it. For example, we may not be able to know about oil prices next year or what’s going to happen to the corn crop, but we ought to be able to tell people what their tax rates are going to be next year. Except we can’t.
Congress and the President have known since they were sworn in in January of 2009 that taxes were scheduled to go up on January 1, 2011. And for most of that time they have known that it would not be good for the economy if taxes, or at least some of them, did go up. They have known for months that something needed to be done, and as the economy starting sputtering, they have known (or should have known, which is the same thing) that uncertainty as to what is going to happen is not good.
The Democrats say that the reason nothing has been done is because of Republican obstructionism: The Republicans won’t let a tax cut (or at least a continuation of the current tax rates) pass for those making under $250,000 ($200,000 for a single person) unless Congress passes that same kind of cut/continuation for those making over $250,000 ($200,000 for a single person). The Republicans are holding a middle class tax cut hostage for a tax cut for the rich – at least that is what Presidential Press Secretary Robert Gibbs is saying in this video.
Among the problems with that argument, as some of the questioners’ in the video noted, are that the Republicans don’t control Congress and the Democrats didn’t even try to pass a bill. As to the first point, i.e., the Republicans don’t control Congress, the Republicans do have 41 seats in the Senate, but they can’t come close to stopping anything in the House. There are 255 Democrats and 178 Republicans in the House (there are two vacancies). If 218 Democrats can agree, they can pass whatever they want. Maybe there would be a problem in the Senate, but if all of the Democrats agreed in the Senate, I find it hard to believe they couldn’t figure out some way to pick off one or two Republicans. That’s what they did with the most recent extension of unemployment benefits, and it passed.
Maybe it is getting a little late to do something now (though it would seem to be even later after November 2), but why did the Democrats wait so long to try? If uncertainty is a problem for the economy (and I think it is), why didn’t they start working on taxes in May? (Note that I deliberately picked a date after the President’s health care plan passed. Nothing, not even getting the economy going, was more important to President Obama than passing a health care plan, even though much of it won’t become effective until January 1, 2014.)
So, why didn’t the Democrats pass a bill through the House (they could lose 38 votes and still pass it), and then dare the Republicans to filibuster their middle class tax cut/continuation in the Senate? I mean, if necessary, the Democrats could have given a little bit here or a little bit there to pick up one Republican vote. It might not have taken much.* But, in fact, they didn’t even introduce a bill in the Senate, and they didn’t vote in the House.
So how is it the Republicans’ fault that a tax cut/continuation didn’t pass? Or was it really because President Obama, Speaker Pelosi and Majority Leader Reid couldn’t get enough Democrats to vote for their plan? Did they wait until the fall (even though the economy would have been better off if it was done earlier) because they thought that Republicans pushing for a tax cut/continuation for everybody, i.e., for the rich (in the Obama/Pelosi/Reid view), would be a great campaign issue – and then they discovered they couldn’t get enough of their own members to vote for it because too many constituents seemed to agree with the Republicans?
But once again, why didn’t they at least bring something to a vote? But they didn’t. Instead, they point the finger at Republicans, and talk about how the Republicans only care about the rich. President Obama talks about the $700 billion cost of continuing the Bush tax cuts for those earning over $250,000 ($200,000 if single), though he never mentions the $3 trillion cost of continuing the Bush tax cuts for the middle class.** (You can’t blame the Republicans for not trying to pass their plan, i.e., a tax cut/continuation for everyone, because the Democrats never let it come to a vote.)
So why are the Democrats doing it? It looks like it’s one of two things. Either it’s more important to the Democrats, or at least the Democratic leadership (Obama/Pelosi/Reid, et al), to have this as a political issue to use against the Republicans than it is to make some changes in their plan to get it passed. Either that or the Democratic leadership so much wants to raise taxes on the rich, because it is “unfair” how much of their money the “rich” are getting to keep, that they are not going to give in.***
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* Maybe they could have raised the level at which the tax increase kicked in to $500,000 or agreed to delay the increase on those making over $250,000 ($200,000 if single) for a year or two, while locking in the cut/continuation for those making under that level. Or they could have agreed to raise taxes on the rich a little less than they were originally proposing. But they didn’t try any of those.
** Also, the fact is that the Republicans don’t control Congress. They don’t get to decide what bills get voted on or when; that’s Nancy Pelosi’s job and Harry Reid’s job.
*** I realize this last point seems a little extreme, but consider then-Senator Obama’s interview with Charlie Gibson back in 2008, when he basically said he wanted to raise capital gains taxes because of fairness, regardless of whether the increase in the tax rate actually raised money or not. (See here.)
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