House Dems to Hold Tax Cut Thursday

by Daniel Foster

We knew that Democrats were cohering around the idea of holding a standalone vote on the “middle-class” tax cut extensions — a vote they have no chance of winning — as a way to get Republicans “on record” and set the stage for eventual concessions. Now we have a date (tomorrow) and a new wrinkle: a separate vote on extending current rates for high-earners could be attached to an extension of unemployment benefits:

The second-ranking House Democrat said that the House will vote on extending the bulk of tax cuts Thursday, and has considered tying upper-rate extensions to a vote on unemployment insurance.

House Majority Leader Steny Hoyer (D-Md.) said Wednesday that the plan to lump the two divisive measures together has “been on the table,” even though he signaled that he is not in favor of it.


The bulk of the tax cuts — for lower and middle-class incomes — will be considered in a separate vote on Thursday. Democrats have long sought to only renew tax breaks for households under $250,000 in income, but Republicans have insisted on an extension of current tax rates for everyone.

Hoyer’s comments signal that some Democrats have tried to figure out a way to thread the needle, giving their party a vote on the middle class tax cuts, while pairing the upper income tax cuts with an extension of unemployment on a completely separate vote.

“I believe that passing unemployment insurance is a moral imperative, not a political deal,” Hoyer told reporters in the Capitol. “We have millions of American families who are without the resources to have any confidence they can put food on the table the next day. That they can pay the rent, get gasoline in their car so they can go look for a job. I think that making a political deal on unemployment insurance is not what America ought to be about.”

I don’t see why the Republicans would take the bait. As I noted yesterday, if the Democrats won’t give them an all-or-nothing vote in the lame duck, newly strengthened GOP caucuses can move retroactively on the tax cuts come January.

UPDATE: I have been made aware of one potential — and potentially massive — problem with the retroactive tax cut strategy: When the new rates kick in on Jan. 1, so will new automatic-withholding formulas. Not only will this suck money out of the economy, but it will require not-inconsiderable administrative costs to get that money back. I’ll endeavor to find out more.

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