Wednesday, July 25, 2012

Senate passes bill to limit Bush tax cuts

This really is an historic vote.  All Democrats have to do now, to win the tax extension fight, is not surrender, ...and win in November.

The key to understanding this tax fight is the so-called Bush tax cuts in 2001 and 2003 were passed with an expiration date of 2010. Republicans feared that if the tax cuts were permanent, Americans would baulk when they saw the CBO forecasted mulitple trillion dollar cost and impact on the deficit.

In December, 2010, Obama reached a deal with the GOP to extend the cuts to the end of 2012, at which time the expire.

This expiration puts Obama and Democrats in a position to dictate terms. A GOP filibuster in the Senate and/or House inaction will result in ALL the tax cuts will expire.

This expiration coupled with Democrats standing firm led Mitch McConnell to relent after months of filibustering to allow an up or down vote on both parties proposals.  I think McConnell earnestly believed that if forced to vote, Democratic defections would pass permanent cuts.

This afternoon, the Democratic plan passed the Senate by a 51 - 48 vote after the permanent extension failed 54-45.

Of course the House for now will refuse to even vote on the Senate bill, instead passing their own bill to make permanent the Bush tax cuts. But, again, Obama and the Democrats hold all the cards.  The House GOP can huff and puff and threaten a plague on all Democrats, and ALL the Bush tax cuts will expire this December.

By the way, it would suit me fine, if all the Bush era tax cuts expired.

Assuming Democrats hold firm, the House won't even consider compromise until the eve of the expiration in December.

If Romney wins in November, the GOP will simply look to pass retroactive extension sometime after January 20th.  Senate Democrats could filibuster, but in the face of a Romney win, history says they will capitulate.

But if Obama wins re-election?  We will see political hysterics in the House of Representative unlike anything seen since Succession.  All those ultraconservative Republicans will collectively explode vitriol and fury as they come to terms with the reality that if they don't accept Democratic terms (i.e. the Senate bill passed today), ALL the tax cuts expire.

I guarantee, they will introduce Articles of Impeachment against Obama.

All the Democrats have to do to win is not surrender.  Sadly, that's a tall order.

No comments: