…The lame-duck House of Representatives, still firmly-controlled by the Democrats, has just passed a measure, by a vote of 234-188, to extend the tax cuts for those making $250,000 a year or less. For those in the top tax bracket, Bush’s 2001 income tax cut is now on-course to expire on December 31st.
Here we go…Senate Republicans have already said they intend to hold up all business remaining on the docket until they get a vote on extending Bush’s tax cuts for all Americans (read: “including the rich”). Senator Charles Schumer had recently offered a compromise–one I first saw raised in the Washington Post–to extend the tax cuts for those making less than $1 million a year; that salary level would become the new top bracket. He chided Senator Lamar Alexander (R-TN) to support it in a humorous episode discussed in Gail Collins’ latest op-ed. The proposal had a certain elegance, “elegance” here meaning “opportunity for the Democrats to tell the public that the Republicans were threatening to filibuster the middle- and working-class tax cuts in order to protect millionaires’ tax cuts if they refused to deal.” Senate Majority Leader Harry Reid–who is immortal, by the way–put it this way: “We do not support giving tax cuts to million- and billionaires…”
About making a deal: This was the Democrats’ compromise offer to the Republicans. If you don’t remember hearing about it, it’s because the Republicans have refused to compromise; the Republican Congressional leadership patently said, both before and after the $1 million-a-year income level became the new threshold for a tax increase, that no compromise short of extension (or better yet, locking-in) of all of Bush’s income tax cuts would be acceptable. So, I don’t want to sound alarmist, but right now there is a possibility that everyone’s taxes will increase because Congressional Republicans aren’t willing to raise them on millionaires.
“Happy New Year!”
The Republicans have the power to hold up several pieces of legislation which President Obama hopes to sign into law in the lame-duck session before the very-Republican 112th Congress meets next January. The President hopes for an extension of unemployment benefits, Senate ratification of the New START Treaty which would further reduce and monitor US and Russian nuclear missile stockpiles, the repeal of the ridiculous Don’t Ask, Don’t Tell policy that bans outed gays from the military, passage of the DREAM Act (the most-significant immigration reform bill since George W. Bush’s stalled reform, which would give illegal immigrants with clean records a path to naturalization if they complete either 2 years in the military or 2 years at an undergraduate college), and some form of his proposed energy bill (most likely sans the cap-and-trade emissions tax).
Is any of that possible now? The Democrats have the first move, but they’re in an ugly game of “prisoners’ dilemma” with the Republicans; whichever party commits first (whether it be the Democrats in issuing an extension of all the Bush tax cuts or the Republicans in allowing the President votes on all of his policy goals for this term as a conciliatory gesture intended to soften the President’s opposition towards their future tax- or budget-cutting proposals) has a huge disadvantage because the other party has a commitment problem. (A “commitment problem,” for those unfamiliar with the language of political rationalism, isn’t a problem for the political actor concerned at all; whoever makes the 2nd move can do whatever they want, as they are responding to whatever choice the other actor made.) The Liberal Ironist doesn’t know for certain whether the Democrats want revenge for the November drubbing or the Republicans consider denying the President any political victories an inherent good; what he does know is that, without a lot of trust on both sides, nobody is going to get anything further from the lame duck session, and the President and Congressional Republicans will have demonstrated an inability to work together before the 112th Congress even starts.
Considering the President has the veto power, Executive orders, and the bully pulpit used so effectively by his recent predecessors, Congressional Republicans should plot their next move carefully. Speaker-to-Be Boehner should find some way to put the Senate Minority Leader on probation, considering the former will actually have the power to craft bills.