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Whereas it seemed Democratic House Leadership was prepared to do the right thing and force a single vote on extending the middle-class tax cuts, the Senate's effort to do the same may fail because of a lack of votes. According to The Washington Post, here are their excuses:
Democrats acknowledged that such a bill is unlikely to pass the Senate, where Republicans -- and at least half a dozen Democrats -- are arguing that it makes no sense to raise anyone's taxes when the economy is so weak.But there's little evidence that the Bush tax cuts helped the economy -- they produced five years of weak growth. Economists believe that, as far as economic stimulus goes, targeted investment (and the unemployment benefits extension that Republicans blocked yesterday) is a better balm for a wounded economy. Next excuse.
Democrats also said they were reluctant to take any permanent action while a presidential commission seeks to identify fiscal reforms aimed at lowering deficits over the long term.Actually, the fiscal commission assumes the president's tax policy is passed as part of its baseline -- that is, no extension on upper income tax cuts, keep middle-class tax cuts, and a middle ground on dividend and capital-gains taxes. Should Congress fail to pass that policy, the fiscal commission will have to go back to the drawing board for more savings. So, both of those reasons are pretty much worthless. Sadly, the real analysis here is that moderate Senate Democrats are either afraid to be tarred as tax raisers by voting on the fiscally sound, politically popular plan proposed by the president, or are just so rich themselves that they are out of touch with most Americans. Unless I'm missing something else?
-- Tim Fernholz
