The contours on the Bush tax cuts are starting to become clear. We’re going to see a short-term extension of the tax cuts, I think that’s clear enough from the public statements. The only question is how many of these other initiatives – Don’t Ask Don’t Tell repeal, New START, unemployment benefits, etc. – will get a guaranteed vote in exchange for the extension. Jon Kyl is saying there won’t be enough time for new START without a deal in place by Monday, and if you parse that he’s saying there will be a deal by Monday, giving enough time for new START.
I don’t think we have to go over why extending all the tax cuts would be very misguided. It’s a repudiation of 4 years of campaign work and what can be accurately described as the overriding principle of the Democratic Party. But in the context of this ridiculous deficit commission proposal, it turns into a farce. Jim White and Matt Yglesias both pointed out that the Bowles-Simpson clown show, designed to lower the national debt as a percentage of GDP, actually increases it over the next 10 years relative to current law. Current law includes no patches to the alternative minimum tax or the Medicare “doc fix,” but the overwhelming amount of that money comes from the Bush tax cuts. The other parts can and should be offset; as Yglesias notes, just Obama saying “I will veto any laws that increase the deficit relative to current law” would do more than Bowles-Simpson in the short and medium-term. Therefore, you can basically do one of two things – you can accept this really brutal destruction of the social safety net, with all its horrifying elements, or you can just let the tax cuts expire.
Maybe neither option is entirely palatable, and certainly both would have their detractors. But it’s pretty clear that the establishment has demanded their 30 pieces of silver. And so the way to do that with the least pain – and it’s super-easy, you just don’t pass anything – is to just let the tax cuts expire. Nobody will die, we’ll just have the tax rates from the Clinton years, a time of unparalleled peace and prosperity. Would I rather not see a tax increase for everyone, including those who clearly don’t deserve it? Of course. But if you accept the proposition that we’re not going to see any stimulative measures from Congress in the months ahead, and that some deficit reduction will take place, I don’t think there’s any doubt that letting the tax cuts expire is the best-case scenario. And anyway, the President can come up with some shiny new “middle-class tax cut” and run on that in 2012.
But instead, we have a White House and Democratic Party afraid of their own shadow, who will therefore basically reverse their position on the fundamental domestic policy of the past decade.
http://news.firedoglake.com/2010/12/01/as-tax-cut-capitulation-takes-shape-letting-them-expire-clearly-best-scenario-at-this-point/
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