From the November 9, 2034 edition of the New York Times:
Unbowed by disastrous midterm results for his party, President Gerald P. Hedge insisted that he plans on going ahead with executive action on tax reform. “I’ve been very patient with Congress,” the president said at a press conference the day after the midterms. “But the American tax system is broken. And Democrats in Congress have refused to step up to the plate. So I will act as much as I can within the confines of the law to grant the tax reform that our nation so desperately needs.”
An ambitious tax-reform package — headlined by 20 percent rate cuts across the board — passed the Republican-led Senate in 2033 but was blocked by the Democratic-led House. In the lead-up to the 2034 midterms, Mr. Hedge pledged to take executive action to provide what advocates term “tax relief,” but he had delayed announcing the specifics of that action until after the midterms on November 7.
Details about what executive action the president may take remain unclear, but top administration sources say the White House is looking at a variety of steps. One policy under consideration would build on 2032’s Deferred Action for Striving Americans (DASA), an executive order that put a hold on all efforts to penalize households making under $200,000 a year for not paying capital-gains taxes. A potential DASA+ might, some say, halt all penalties for income-tax evasion or underpayment for those making under a certain threshold each year (perhaps $75,000). Some tax activists are encouraging the Hedge White House to “go big” by refusing to have the IRS investigate or penalize any household that professes to make below $100,000 annually, and to refrain from prosecuting or levying fines against anyone above that threshold as long as they pay at least 80 percent of their legally mandated tax burden.
“The IRS has enough on its hands going after the big fish,” said Fielding Soderquist, president of the National Council of American Taxpayers and a leading tax activist. “They don’t have the resources to go after the minnows, too. President Hedge needs to go big in order to deliver on his promise to the American taxpayer that he will get the economy moving again. The American taxpayer community and the nation cannot afford to wait any longer.”
Mr. Soderquist and others argue that DASA and any other actions taken by Mr. Hedge are simply an extension of his executive powers of prosecutorial discretion. As Anita Schilling, a professor of constitutional and tax law at the University of Chicago, said, “Very, very few people making under $100,000 a year are audited anyway — let alone targeted for tax evasion. DASA+ would merely formalize what is already implicit government policy.”
Some, however, are concerned about the political implications of the president’s potential executive action on tax reform. California’s Pat Reedy, the No. 2 House Democrat, has blasted this plan: “If President Hedge thinks that he can rewrite tax policy at whim, he’s got another thing coming. The American people rebuked his policies at the polls on November 7. Going rogue on tax policy would be like firing a nuclear missile at bipartisan relations.”
And even some congressional Republicans have expressed anxiety about the president’s actions. Ohio senator Roger Khanna, facing a close reelection race, urged the president to forgo executive action on tax reform during the summer. Having scraped out a narrow win, Mr. Khanna still encourages the White House not to act: “It’s better for Congress to act on tax reform than to have the president go it alone.”
The White House and its allies sniff at these objections. As Chief of Staff Louis Paige said in an interview the day after the midterms, “The president will take action as a catalyst to encourage Congress to act. If Congress passes the 20 percent rate cut, the president can withdraw his executive action. Congress had a chance to act to pass tax reform. Now it’s the president’s turn.”
Off the record, administration insiders are even more dismissive of White House critics.
“If they don’t like the president’s policies, they can go out there and win an election,” said one White House aide before stopping himself and suddenly laughing. “Actually, it doesn’t even matter if they win an election or not.”
A key Senate Republican outlined the thinking of some in Congress: “Democrats can whine and howl, but, at the end of the day, what are they going to do? Try to impeach him? For giving people a tax cut? Give me a break. Until you can get two-thirds of Congress to tell the president no, he can do whatever he wants.”
Top Hedge aides have cited “the Obama precedent,” which one top adviser summarized as follows: “The president is patient. The president gives Congress a space to act in. But if Congress won’t act, the president can and must act. If Congress won’t govern, the president must.” This adviser also added, “In a time of gridlock, it’s the responsibility of the executive to go in and fill the vacuum.”
During his Wednesday press conference, the president also addressed the topic of governance in light of the election results. “I hear the 40 percent of Americans who voted on Tuesday, but I also hear the 60 percent of Americans who did not vote,” he said. “That 60 percent of Americans did not vote in favor of more gridlock and a broken Congress. Both those who voted and those who did not vote want things to get done here in Washington. And I will get things done if Congress can’t.”
One journalist asked Mr. Hedge why he is taking executive action on tax reform now after insisting for the first six years of his presidency that he lacked the constitutional authority to change U.S. tax policy unilaterally. In response, the president smiled and said, “I’m the president, and I can change my mind whenever I want. And I can change a whole lot of other things, too.”
— Fred Bauer is a writer from New England. He blogs at A Certain Enthusiasm, and his work has been featured in numerous publications.