House Speaker Nancy Pelosi (D-CA) indicated just a few weeks ago that a vote on the expiring Bush tax cuts would happen in mid-December. It turns out that the rest of the House is a bit more optimistic than she is: Rep. Chris Van Hollen (D-MD) has announced that he expects a vote on Thursday. As in tomorrow.
So what does that mean? It looks like the Democrats in the House will, as predicted, extend tax cuts for the bottom tier of tax rates and hold rates for those taxpayers making $250,000 or more. That measure has enough support to pass in the House so I think you can count on it happening.
But then expect it to sit.
You see, there are not enough votes in the Senate to pass a similar measure. The Senate has indicated that they, too, will take a vote on the tax cuts sometime this week (probably also Thursday) but the Democrats do not have the 60 votes they’ll need to make the measure stick. And it’s clear that the Republicans in the Senate aren’t going to budge with Senate Minority Leader Mitch McConnell (R-KY) saying:
How about we start with this? No tax hikes on anybody. No tax hikes on anybody, period.
Of course, for his part, President Obama continues to throw about the “s” word (sacrifice), saying:
I believe and the other Democrats in the room believe that this would add an additional $700 billion to our debt in the next ten years. I continue to believe that it would be unwise and unfair, particularly at a time when we are contemplating deep budget cuts that would require broad sacrifice.
So there you go. No compromise in sight.
Because of the heated rhetoric, it’s been suggested that the final vote will be something of a “split the baby” approach with cuts for the middle class being extended immediately and a final vote on the higher end taxpayers being delayed. Earlier in the year, I would have said that could never happen since the middle class tax cuts are the Republicans’ bargaining chip for the other. But that was before November. The shift of power in Congress means that the Republicans can certainly try again on this come January so they *might* concede pushing off the vote. Then again, the Dems are still desperately looking for a win before the end of the year, a fact of which the GOP is well aware. This approach would give Democrats the right to say that they opposed extending tax cuts at the top and would allow the Republicans to pass them anyway. In that sense, it’s a win-win for everybody.
Well, except for the taxpayers who have to figure the darn thing out. But hey, who cares about that? You would think it would bother Congress more than just a little bit that a recent survey showed that 65% of taxpayers don’t even know enough about the tax cuts to know how they will affect them for the 2010 tax year. And 70% of taxpayers aren’t doing any year end planning, largely due to the uncertainty. These aren’t encouraging numbers.
If you had asked me eight years ago if I thought we’d actually be in this position, with this much uncertainty this close to 2011, I would have laughed out loud. These days, nobody is laughing.
Our politicians are still playing games. My feelings on the matter are clear. The Bush tax cuts should be extended for everyone. For at least two years. Let any tax increases on anyone be a campaign discussion point in 2012. If the Democrats are right and re-elect President Obama, I will have to live with the higher taxes. If on the other hand, a new Republican, fiscally conservative and pro limited government candidate is elected then the electorate will have decided. Isn’t that the way it should be ?
The result will be a three-year (because that will make it fall comfortably after the next election) extension of the cuts for everyone. If they weren’t so frelling dishonest they would just pass that now, as well as the continuing resolution so the government can keep wasting our money. Then they could all go home for the holidays.