Partisan Debate Over Taxes Fuels Grudging Bipartisanship

President Obama announced the framework for a bipartisan extension of the Bush tax cuts in his speech Monday night.
The compromise centered on the inclusion of a temporary extension of emergency jobless aid for the longtime unemployed, which Republican leaders have resisted.

“Make no mistake,” Obama said. “Allowing taxes to go up on all Americans would have raised taxes by $3,000 for a typical American family. And that could cost our economy well over a million jobs.At the same time, I’m not about to add $700 billion to our deficit by allowing a permanent extension of the tax cuts for the wealthiest Americans.

And I won’t allow any extension of these tax cuts for the wealthy, even a temporary one, without also extending unemployment insurance for Americans who have lost their jobs or additional tax cuts for working families and small businesses.”

The gesture comes days after a Senate vote to extend the tax cuts for middle class earners failed.

While the vote on Saturday passed with a majority of 53-46, it was well short of the 60 vote margin needed to prevent a Republican filibuster.

The vote is indicative of the Senate’s filibuster-induced deadlock. Five Democratic Senators joined Republicans to vote against the measure.

Democrats largely want an extension of the tax cuts for the middle class, while allowing cuts for those making over $250,000 per year to expire.

However, tough opposition from Republicans and some conservative Democrats has created a necessity for compromise.

If nothing is done to extend the tax cuts, tax rates will return to pre-2001 levels, amounting to a tax hike for all income brackets.

Though Obama ran on a platform that included allowing the Bush tax cuts to expire for those making over $250,000 per year, political urgency has made him favor a temporary extension of all the cuts.

An additional compromise, spearheaded by Senator Chuck Schumer, also failed in the Senate on Saturday. Schumer proposed a tax increase for those making over $1 million per year. This vote also fell short of the 60-vote filibuster-proof margin.

“I’m going to be here for the next year, next two years,” Schumer said, “to remind my colleagues that they were willing to increase the deficit $300 billion to give tax breaks to people who have income over a million dollars.”

Republicans argue that raising any taxes during a recession would be devastating to the economy.

Senate Minority Leader Mitch McConnell said Sunday on Meet The Press, “Every Republican and five Democrats said we’re not raising taxes on anybody in the middle of a recession.”

Some, including economist Paul Krugman, believe that the tax cuts for all incomes should be allowed to expire if Republican leaders are not more willing to work with the White House.

Writing in the New York Times, Krugman said, “Democrats have tried to push a compromise: let tax cuts for the wealthy expire, but extend tax cuts for the middle class.

“Republicans, however, are having none of it. They have been filibustering Democratic attempts to separate cuts that mainly benefit a tiny group of wealthy Americans from those that mainly help the middle class.”

Krugman argues that, while an across-the-board increase would be harmful to the economy, the effects of extending the tax cuts for the wealthy would be even more damaging.

MSNBC’s First Read points out that the potential cost of extending the Bush tax cuts for two years (approximately $1 trillion including an extension of unemployment benefits and targeted tax cuts) is more than Obama’s stimulus package, which cost $800 billion.

All signs point towards an extension of the tax cuts. Leaders in Congress from both parties have said that the deal is likely to happen midweek.

Micheal Angelo Rumore can be reached at michealangelorumore@gmail.com.