Democrats, Obama divided over whether to lock in Bush’s tax cuts

[babylonsister]

Democrats, Obama divided over whether to lock in Bush’s tax cuts
By Alexander Bolton - 09/29/10 06:00 AM ET


Senate Democrats are peeling away from President Obama over permanent extension of the middle-class tax cuts, saying that locking in low rates for the vast majority of taxpayers is an unaffordable luxury.

Several senators, including Democratic Policy Committee Chairman Byron Dorgan (N.D.), are hesitant about giving up an estimated $1.5 trillion in revenue over the next decade, when the federal deficit is unsustainable and there are no obvious spending cuts to fix it.

They say it would be smarter to pass a short-term extension of the expiring Bush tax cuts for families earning less than $250,000, then re-evaluate tax policy in a year or two when the economy is stronger.

“I think a far better approach is to extend the middle-income tax cuts for two years and then make a judgment,” said Dorgan. “There’s a lot of uncertainty about the economy and the indebtedness.”

more...

http://thehill.com/homenews/senate/121515-dems-obama-differ-over-locking-in-bushs-tax-cuts

[iamjoy]

1. Extend For One or Three Years

IF they are going to stop Bush's tax increase from going into effect, they should approve the extension for one or three years. This would make it less of an election year issue.

[Bitwit1234]

2. They don't know what a furor that is going to cause

since there are not enough people that letting those super rich loose those tax cuts they are going to see a backlash like they never seen before. Remember representatives get voted in every TWO years. And there are a heck of lot of senators who are up for re-election in 2012.

[budkin]

3. Letting the middle class tax cuts expire would be a disaster of epic proportions

[LiberalFighter]

4. Have it expire at the end of 2013.

And increase the number of tax brackets for over $250k.

250k - 500k -- 33%

500k - 1 mil -- 38%

1 mil - 5 mil -- 41%

5 mil+++ 43%

Have taxes at a lower level for businesses and prohibit any deductions for any expenses that benefits any specific individual or group of employees unless made available to all employees. And if the benefit is provided at a reduced cost any employee must be able to purchase the benefit.

[kentuck]

5. Let them expire ...

and pass a "Democratic" tax bill for those making less than 125,000. The Senators are correct. We cannot afford the Obama plan.

[geek tragedy]

6. Morons. If you make the middle class tax cuts as well as the

upper class tax cuts temporary, then the upper class tax cuts will never get repealed.

[harun]

7. This is what the Senate really wants, to make the upper class tax

cuts permanent. They just haven't figured out a way to do it yet where everyone is blamed but them.

[karynnj]

9. You have absolutely no proof behind this

What seems to be the case, which this article highlights is that there are at least factions among Democratic senators.

1) Those who agree with Dorgan that all should expire (They have NO incentive to join any compromise as inaction ends with what they want)
2) The majority, who agree with some variation of Obama's plan
3) The Bayh, Lincoln, Nelson gang - who want to extend everything

Among the Republicans - at least so far - they are in lock step with group 3.

It is clear that from this, they can't get the votes for 1 or 2 - and they are against 3.

But, who does waiting advantage? To me it is clear that it is the republicans. First, the issue has little clarity in the election - when it could help Democrats if the choice were clear. Second, it will be acted upon either in the lame duck session or the next Congress. If the Republicans have big gains, why would they not filibuster anything in the lame duck session to force it into the next Congress, where they will have more power.

So, as it seems the Democrats have nothing to lose by getting a vote on the record, why are they not doing it. The only reason I can think is that there are enough Democrats in 1) or 3) that the vote would be an embarrassment to the President and actually make the difference between the parties seem less. (How many would explain that some of the democrats are in group 1)

[harun]

13. Politics, Blame

Think about the scenarios. The Republicans have vowed all or nothing on the income tax cuts. Meaning they want all the Bush income tax cuts renewed.

If Republicans gain control of the House, a possible scenario, you'd have a Dem majority lame duck House about to switch hands. In this scenario they would definitely pass a bill extending middle class tax cuts and expire upper class tax cuts.

What would the Senate do? No way the Republicans gain 60+ votes in the Senate. They may get a majority there, albeit even that is unlikely. Anyway the lame duck Senate Republicans would not let a vote come in on extending middle class tax cuts, and expiring upper class tax cuts (the likely House Bill). So all tax cuts would expire and they can blame the Republicans for it.

Of course the other scenario is the Dem's cave and extend all the cuts. Which I think they would likely do if forced to vote before the election. But if it was after the election and most of them have been voted out of office anyway, why would they care if they expired. It would be a big F U to the people who voted them out and the new Republicans coming in to office.

This post is to the reality of what would happen, however my original post was to what the Dem's in the Senate really want. And that is to somehow extend all the tax cuts without being blamed for doing so. If an opportunity arises where they can do this they will do it in two minutes. In the mean time, I think reality will get in the way. Pelosi won't let it happen.

[kentuck]

10. I must admit....

that thought is in the back of my mind. I hope you are wrong. We will know soon enough.

[karynnj]

8. Here's another potential proposal - from the NJ group

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=167x4709

It calls for extending:
the under $250,000 income taxes for 5 years
the capital gains and dividends for 5 years
the taxes from $250,000 to $500,000 for ONE year

The Representatives behind it include Michael Capuano, D-Mass and Bill Pascrell Jr, D- NJ.

This would cost less than Obama's plan because it is not permanent. It also means that the taxes on income above $500,000 ends immediately. It would be difficult for the Republicans to extend the last group an additional year - especially if we keep the House.

[PVnRT]

11. Good job, Senate. Why not just give up on the 2010 election?

Idiots - you already passed on the chance to make Republicans support higher taxes on the middle class, now you're coming out saying the same damn thing a month before everyone votes. Brilliant strategy.

[kentuck]

12. We cannot have a credible national budget...

unless people making $250K pay more. The numbers don't add up.

[Liberal_Stalwart71]

14. To be honest, we should have tax cuts for anyone right now. Why? Because people are losing jobs!

The focus should be on job creation. Tax cuts are useless for those who have no jobs. And we simply cannot afford any kind of tax cut at the moment.

However, if there has to be a tax cut, then they should be targeted to the middle class and some relief for low-income families as well.

I'm just not convinced that tax cuts are the answer in most cases.