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Tax Deal Dissent?



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Earlier today, Obama signaled that he will likely be willing to compromise with Republicans on tax rates on high earners. The president said that the default expiration of the Bush tax cuts — which will automatically go into effect in 2011 if a compromise bill does not pass — “would be very tough not only on working families. It would also be a drag on the economy at this moment. So I believe we should keep in place tax cuts for workers and small businesses that are set to expire.” He is adamant about extending the Bush tax cuts for the middle class, and personally opposed to extending tax cuts on high earners. But, he said, “We’ve got to make sure that we’re coming up with a solution, even if it’s not 100 percent of what I want or what the Republicans want.” All day, there have been rumors about a deal in the works.

The Democratic whip, Sen. Richard Durbin (Ill.), seemed angered by the prospect, but ultimately agreed:  “That we would give tax cuts to those making over $1 million a year . . . is unconscionable.” But, he added, “we’re moving in that direction.”

Democrats are unable to effect any tax increases against a Republican senate filibuster. The rumors have been that Democrats will accept a compromise deal involving an at least temporary extension of all tax cuts, in return for Republican support for extended unemployment benefits.

But there could be some dissent. According to CNN’s political ticker blog, a Democratic congressional source said, “We won’t rubber stamp a deal between the White House and Mitch McConnell. …We want to make it clear — don’t take our support for granted.”

Indeed Paul Krugman’s editorial today discourages Dems from making a deal:

The answer is that they [Democrats] should just say no. If G.O.P. intransigence means that taxes rise at the end of this month, so be it.

The New York Times polemicist was joined by a few New York politicians. Rep. Anthony Weiner (D., N.Y.) tweeted:

“Memo to our president: Why are we always punting on 3rd down? Lets get our offense on the field (sic).”

Senator Kirsten Gillibrand (D., N.Y.) doesn’t look kindly on tax cuts for many of her Manhattan constituents. She tweeted: 

Outrageous that GOP is turning their back on these families and instead borrowing $700b from China to extend Bush tax breaks for wealthiest.

Senator Chuck Schumer (D., N.Y.), seemed to share their sentiments. Asked if he would like to, as per Krugman’s recommendation, fight Republicans even to the point of allowing all of the tax cuts to expire, he seemed sympathetic as he replied, “there are lots of people in our caucus who do have that appetite. There are some who don’t.”

And even one Republican, Sen. George Voinovich (Ohio), came out against extending tax cuts across the board.

The conventional wisdom has been that Democrats can’t risk a serious effort to raise taxes in this environment. With Republicans seeming willing to extend unemployment benefits, it looked like it would be easy to fashion a compromise. But there’s some strong dissent among liberal intellectuals and Democratic pols — that could at least make things messy.



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