As DC Tax-Cut Theater plays to unruly houses, the underlying truth is that the R's always planned it to play out this way

by Ken

The plot thickens. Even as the White House has been staging a media event to herald the support of every two-bit pol, dog-walker, and drifter who announces support for the "compromise" tax plan, and the world's teensiest-brained legislator, Sen. Jim DeMoron, announces he'll filibuster the thing (too expensive!), House Democrats voted today not to consider the package as negotiated. (And remember, "Mother Mitch" McConnell insists that "as negotiated" is the only way the package can be considered. It apparently represents the earthly pinnacle of negotiated-legislation perfection.) Says Chris Van Hollen:

This message today is very simple: that in the form that it was negotiated, it is not acceptable to the House Democratic caucus. It's as simple as that. We will continue to try and work with the White House and our Republican colleagues to try and make sure we do something right for the economy and right for jobs, and a balanced package as we go forward.

I don't know that anybody knows where any of this stands at the moment, or what's going to happen next. On the one hand, the White House is undoubtedly surprised that so many Democrats are unwilling to join him in his party switch. On the other hand, the extent of opposition from the Right seems to me to make it altogether possible that a further-negotiated package could wind up being worse, especially considering these bozos' pathetic negotiating skills.

OK, TO UNDERSTAND THE TAX-CUT FOLLIES
WE TURN TO DIGBY: THE GOP PLANNED IT ALL

But enough political theater. We can parse the specifics of the tax follies, though they always seem to come down to the same thing: What can the Republicans' and "centrist Dems'" oligarchical masters slip into the deal while they're in the process of giving away not much? I do believe that Digby hit the rock-bottom issue in a great post yesterday. With an assist from Profs. Jacob Hacker and Paul Pierson by way of our friend Rick Perlstein, she put the issue of the sunsetting of the Bush tax cuts into something like definitive perspective:

[T]he Democrats and Obama could have extended the middle class tax cuts during the worst of the recession as part of the stimulus back in 09, which was probably the only time they could have done it with any good chance of passage. (I'll leave it up to others to figure out their motivations for waiting until this fall to deal with it.)

I wrote the other day that this was baked into the cake years ago, and Rick Perlstein wrote in with this reminder:

From Hacker and Pierson's "Off Center" (2006):

Until 2001, sunsets...were a relatively minor feature of the tax code, and their usually routine extension posed a quite minor cost. After 2001 that changed.....this policy design reduced the estimated cost of the tax cuts. Yet, just as important, it means that future politicians will face a fundamental political quandary: Should they allow enacted provisions of the tax code to expire...? Or should they extend these provisions, incurring the $4 trillion in lost revenue and additional debt service that the sunset provisions of the tax cuts represent? The sunsets, in short, create an unprecedented new political environment--one that is highly favorable to tax-cutters' core goals.

None of this is accidental. Republicans reasonably predict that the pressure to extend the tax cuts will be intense, not least because well-off folks who receive the big tax provisions that take effect just before the sunsets kick in will be unusually well poised to make their voices heard....

The story is stark. To respond to their base, Republicans misled most Americans. On an unprecedented scale, phase-ins, sunsets, and time bombs were used to give the tax cuts of 2001 the most attractive public face possible while systematically stacking the deck in favor of Republicans' long-term aims. From top to bottom, Republicans larded the tax cut with features that made sense only for the purposes of political manipulation....

The success of this strategy is already [in 2006] apparent. In 2004, despite a deficit of almost half a trillion dollars, provisions of the 2001 bill scheduled to expire were instead extended, by votes of 339-65 in the House and 92-3 in the Senate. It is not coincidental that these provisions--the least skewed toward the rich of the 2001 and 2003 cuts--were set to expire right before the hotly contested election....

and the package, H & P note elsewhere, was set to expire in another election year, whereupon Democrats voting to end it could be framed as "tax hikers"....

People who do not get that the Republicans planned this --- and are thrilled to keep it going for another two years --- are failing to understand the political reality.

But more depressing than anything, the Democrats are now actively doing their dirty work for them and are on the verge of doing the same thing with the payroll tax, which pretty much destroys the whole concept of the Social Security trust fund -- and further opens the door to cuts in the program. It will not be any easier to restore that tax than the tax cuts for millionaires. Indeed, it will be more difficult.

At some point you either have to question whether they are simply working for the oligarchs too. Not that it matters because whether it's out of ineptitude or complicity, the end result is the same.


Update: Jonathan Alter just said that Russ Feingold went to the White House and begged them not to bring it up before the election because his constituents didn't want tax hikes. I have no idea if it's true. We do know that the Blue Dogs in the House id this, so it's not hard to believe.

But it didn't take a genius to see this coming --- Hacker and Pierson spelled it out in 2006. The Democrats had a rare --- and probably unique --- opportunity in 2009 to defuse this landmine and they didn't take it.

OF COURSE! IT'S ALL RUSS FEINGOLD'S FAULT!

With regard to this idea apparently now being sold by the inner scum of the White House that it's all Russ Feingold's fault for pressuring them into postponing the vote on the tax cuts till after the election, a waggish friend points out that the White House was for sure regularly in the habit of doing Senator Feingold's bidding -- right!

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