Thursday, December 09, 2010

Congressional Democrats Not Addressing Tax Cuts Before Midterms Lead To Tax Cut Compromise Fiasco

Who sold out whom?
"Once again we are caught up in the moral superiority snobbishness idealism of the elitist left demonstrated by the likes of Olbermann, Maddow, and Huffington, who tend to be more interested in minutia and finite details of the issue and who's to blame than accepting reality and moving forward to finding a solution that best serves the working class."
The question is what is the end game for House Democrats who continue to play chicken with themselves in refusing to bring the Obama tax compromise proposal to the floor for a vote. I think they will attempt to get Republicans to sweeten the package. But I don’t think that if push comes to shove that they will go so far as to reject the package.

Democrats play a dangerous game because if they do not accept the Obama compromise or something close to it and the tax cuts expire for everyone rich and poor on December 31st they will be blamed for the tax increases. The failure to get what they want when it can be argued their bargaining power was the strongest can be found in the fact that congressional leaders and the white house did not to take action to address the tax cuts before the midterm elections.

Now Congressional Democrats are blaming the White House and Obama for his failure to address the issue before the election. Many liberals were surprised that Democrats did not take this issue of tax cuts for the rich up before the election. It seemed like it could of set up the perfect narrative for them to use on the campaign trail against Republicans and demonstrate how Republicans are more than willing to protect the interests of the rich and privileged over that of the middle class. I suspect that Democrats in Congress for reasons that seem somewhat indefensible now saw the pre-midterm tax cut fight as a overall negative and something that would somehow hurt them at the polls. If the Democrats had brought up the tax issue before the election would it of made a difference in the outcome? Well we will never know for sure, but certainly it couldn’t of hurt given the final outcome and the lost of 65 seats in the house in the midterms.

The lame duck Congress voted on continuing the tax cut for the middle class and raising taxes on those making over $1 million. It failed due to a lack of 60 votes to break the filibuster in the Senate. This has lead to the Obama compromise now on the table which gives Republicans what they want in exchange for taxes not going up on the middle class, an unemployment insurance extension and some other simulative taxes. 80% of the taxes proposed in the compromise package benefit the middle class while 20% give tax breaks to the rich. Here’s the chart.

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