In his weekly radio address to the nation last Saturday, President Obama repeated his oft-stated position that, when Bush-era tax cuts expire Dec. 31, tax cuts for the middle class should be continued and tax cuts for the rich should be ended. Now, less than a week later, a leading Blue Dog Democratic senator is already caving in to Republicans.
Sen. Evan Bayh, D-Ind., appeared at a forum with Wall Street billionaire Pete Peterson who touted his TV ad campaign to cut Social Security. There, Bayh called for extending all the tax cuts for two years and then allowing them to expire.
Unlike Bayh, most Democrats have backed the president on taxes and have supported extending the current levels for middle- and lower-income people only, defined as families earning less than $250,000, while allowing them to expire for top earners.
The Republicans want all the Bush-era tax cuts extended, including those for higher earners, at least for some period. The president has signaled he is willing to consider some extension for higher earners, but the two parties remain divided on details – including the size of the breaks that would continue for wealthier tax payers.
One other Senate Democrat, like Bayh, has moved toward the GOP position on tax cuts. Senate Budget Committee Chairman Kent Conrad, D.-N.D., has said all the Bush-era tax rates should be extended, at least until “Congress can tackle a comprehensive overhaul of the entire U.S. tax code.”
Labor and many of its allies, however, say that Democrats should use their majorities in the lame-duck Congress to stand firm on the tax cut issue, exposing the Republicans as willing to hold hostage the president’s tax cuts for the majority in order to protect the interests of their wealthy benefactors.
The Nov. 2 election, AFL-CIO President Richard Trumka told reporters in a post-election conference call, “was about jobs, plain and simple. It was a mandate to fix the economy and create jobs.” He said that the federation’s election night survey “shows clearly that the election wasn’t an endorsement of tax cuts for the wealthy.”
The poll showed just 34 percent of all voters back extension of tax cuts for the rich. Even among Republicans only 49 percent said they favored extending the cuts for the wealthy.
Bayh’s “compromise” idea on taxes is actually a Republican formula put forward a day earlier by Sen. Orrin Hatch, R-Utah. Hatch said he would be “open” to a two-year extension of all the rates. Hatch is in line to be the top Republican on the Senate’s finance panel that does the actual writing of tax policy.
Bayh was asked by reporters to predict what the Democratic-controlled lame-duck Congress would do about the tax cuts. Bayh said “an ultimate compromise could see rates for people earning less than $200,000 a year extended permanently, and those for wealthier Americans only continued for a shorter period of time.”
Hatch and other Republican lawmakers have already rejected out of hand even that compromise.
Photo: Sen. Orrin Hatch, R-Utah, determined as ever to please his wealthy patrons, has put forward his version of a tax compromise. (AP Photo/Susan Walsh)