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The Politics of Extending the Bush Tax Cuts

By Philip Klein on 12.6.10 @ 11:15AM

With Democrats having failed to pass a partial extension of the Bush tax cuts on Saturday, the road is now paved for the White House and Republicans to strike a compromise to extend all of the Bush tax cuts while extending unemployment benefits at the same time. The only question now is whether that extension is going to be for one year, two years, or three years. Each of these possibilities has different political ramifications, which I speculate about below.

One Year — This could be the potentially best option for President Obama politically. Liberals are already smarting about the prospect of Obama reneging on his campaign promise and caving into Republicans on the tax cuts, but a one-year extension is the easiest to explain away. At the same time, it would disappoint conservatives who were hoping not to merely punt on the issue for a year. Perhaps a year from now the economy will be better and maybe the public will have already grown tired of House Republicans, allowing Obama to re-fight the battle in a more favorable political climate. By this time next year, Republican presidential candidates will be at each other’s throats in Iowa, New Hampshire and South Carolina. If Obama is able to hold his ground next year and allow the tax rates to expire, the left will largely forgive him by the time the 2012 general election rolls around. Of course, if he caves again, this could be potentially demoralizing to liberals who will start to assume that the Bush tax rates will have become immortal, and they’ll lose faith in Obama’s ability to stand up to Republicans. This issue could become the liberal equivalent of when Bush I angered conservatives by breaking his “no new taxes” pledge.

Two Years — This would be the worst of all worlds for Obama. Not only would it mean that Obama capitulated to Republicans, but that he couldn’t even limit the extension to one year. Also, this would mean that the tax cuts would be scheduled to expire at the end of 2012, making them a major issue in the election. It’s tough to see what Obama’s posture would be. If he reiterates that he wants to let the rates for top incomes expire, Republicans can still attack him for wanting to raise taxes, yet those who those who support the tax hikes won’t believe he’d actually let them expire. It would become the symbol of all of Obama’s broken promises to the left, of how he became a creature of the Washington establishment he passionately campaigned against, and how his presidency turned hope into cynicism rather than the other way around.

Three Years — This would make the anger on the left even worse, but on the flip side, it would have the advantage of deferring the urgency of the issue until well after the 2012 general election. So this option would likely be less favorable to Obama than the one year option, but have its advantages over the two-year option.

Lullabys, Legends and Lies| 12.6.10 @ 12:16PM

There's something seriously wrong with you "Base", when they're only going to be happy with letting the Government take more of the Taxpayers money, be it rich or poor, and letting the Government grow even larger than it already is. The President has got to cut ties with these freaks if he wants to be re-elected, but unfortunately, I think he may be a card carrying member of this group (I don't really think that, I know it), and believes as they do.

And another thing, how many weeks of unemployment benefits are we going to be held hostage for, if 99 weeks isn't enough, then is 200 weeks going to be enough? At some point you've got to draw a line in the sand, and say that's it, and I think almost two years of unemployment is enough. You can't retire off the unemployment line, but if we keep going this way, you will!!

Laurie G| 12.6.10 @ 12:43PM

Consider the money the people on unemployment are getting the same money they should have received that the big corporations all got instead. So in the end, the taxpayers do get a bail out of some kind as they should have in the first place. Billions and billions and billions to banks and big corporations, so why not the people who were put out of jobs by those same banks and corporations? It should have been the other way around, money for unemployed, but none for the banks!

George S| 12.6.10 @ 12:19PM

Why are we even considering the premise that the tax rates must have an expiration date? Did ObamaCare come with an expiration date? If conservative policies come with a time limit and liberal policies are carved in stone for all time, then how does a Republican victory in 2012 make any difference?

Todd Klimson | 12.6.10 @ 12:56PM

If the Presidential Election were held today Obama would be toast. He has to pull a Clinton "triangulation" here and extend the tax cuts. Look, more money in the governments hands is ridiculous and very dangerous for the US. Keep Money in the hands of the people, don't bite the hand that feeds you!!

Michael L. Hauschild| 12.6.10 @ 1:07PM

“We will do nothing unless the tax cut issue is resolved.” This was the promise that propelled many into (and many out of) office.
The facts; the Senate is now ready to “Omnibus” all the things that will cost, cost, cost, and be paid for by deficit, deficit, deficit. The pre-negotiation no one was privy to will be the real START platform, a sellout to the Communists (other communists) and will debilitate our world role. The unemployment benefits will continue (deficit again) at rates that will not promote job seeking. (I have nothing against unemployment payments but they should decrease every week they are drawn to lessen the blow when they stop).
The liars; This group is comprised of those assuming the mantle of power in the House and the Senate in 2010 and those carryovers from previous successful lying campaign endeavors.
The fools; that would be us, the last great bastion of the demented electorate, those of us who actually believed that anything would change.
Once again fiscal restraint is relegated to that biannual window of popularity, and as we write the victors are conniving for fame, power, and influence while bartering for re-election with the money of our grandchildren.

hsr0601| 12.6.10 @ 7:42PM

** How do you pay for tax cuts for the wealthy ?
　
1. First attempt : threatening Social Security and Medicare Cut through the deficit panel.
　
2. Second attempt : holding the desperate Hostage, say, the Ransom.
How long will it take for Obama to learn that we think compromise is a synonym for unconditional surrender, or another Bush-era?
　
** The deal based on the outright lies and supportive Dead Media will lead to another Bush-era & irreversible RECESSION.
　
1. The reps uses the recession as an excuse for tax cuts for the wealthy.
　
THIS IS A MIDDLE CLASS RECESSION.
　
2. The Republican Senate minority leader has been arguing that the outcome of the midterm elections confers a mandate on Congress to extend the Bush-era tax cuts.
"There's bipartisan opposition to raising taxes on anyone at this time."
　
(a). Only 34 percent of Americans believe that tax cuts ought to be extended for those households making more than $250000 a year, according to a new CNN poll.
　
(b). A recent CBS News poll indicated that Only 26 percent indicated they support extending the tax cuts for all Americans regardless of income level
　
(c). In the AP-CNBC poll, 34 percent favor extending the tax cuts for all Americans.
　
(d). A recent Gallup poll found 40 percent favor maintaining the Bush-era tax cuts for all Americans.
　
3. The reps road the waves of deficit reduction just 2 months ago.
　
Now, 2 months later they are set to increase the deficit and increase the governments debt ceiling just so they can give themselves and their rich pals more money.
This isn't what Americans voted for.
　
4. Tax cut for small businesses.
　
A small business bill was blocked for weeks by a republican filibuster in the Senate.
　
5. Tax cut for job creation.
　
(a). There is no evidence that the tax cuts created even a single job.
Back when Bush was pushing his tax cut packages through Congress in 2001 and 2003, supporters said the cuts (which weren't balanced with spending reductions) would initiate an era in which the American economy would grow so robustly the nation would be running a surplus of more than $5 trillion at the scheduled expiration date. U.S. now runs a deficit of about $1.3 trillion.
In fact, the available evidence is the exact opposite:
Former President Bill Clinton left a record surplus and created 20 million jobs, despite the warning of potential economic disaster over tax increase for the wealthiest.
　
(b). Your Waterloo = our windfall.
Even when the economy was on the cusp of entire collapse just like Lehman Brothers ahead of the roll-out of stimulus package, it was held hostage by Audacity of Nope, and the time was running out.
Power first then said : Nope ! How do we pay for it ?, Just let it go under exactly like Lehman Brothers.
　
6. The GOP along with Big Business bought this past midterm election.
The structure that the last champion is authorized to pick the next match winner .
　
The ruling that allowed Corporate money to back Political Candidates destroyed the very fabric of the Elections and Americans are paying dearly for it.
The incessant barrage of negative campaign ads drove most Americans towards something they knew nothing about, the Republican/Corporate take-over of the US. Millions upon millions were spent to defeat certain Democrats.
　
7. From my perspective, Communism & extreme Capitalism have one thing in common : Power First, Corruption at the cost of people !

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