It's not every day that Nancy Pelosi gets whacked from the left by The Washington Post's editorial page, but it happened yesterday, when the Post chastised the minority leader for asking John Boehner for an immediate vote on extending permanently the Bush tax cuts for all households under $1 million a year. Obama's position (roughly) is to extend those cuts on households under $250,000 a year. The Post says, and rightly in my view:
The Democratic leader’s position offers the political benefit of letting Democrats argue that the GOP opposed curtailing tax cuts even for millionaires. The risk of this particular pander, however, is that $1 million becomes the new, high bar; tax cuts below that level remain off-limits. Do Democrats really want their new slogan to be: “Almost as irresponsible as the Republicans?”
As we know, the Bush cuts expire at the end of the year. If Congress does nothing, the Clinton-era rates kick in. You can go to this chart and see for yourself what the differences would be. On it, the Bush rates really start to kick in in 2003.
I supported the $1 million level when Chuck Schumer was pushing it a while back. The difference between then and now is that Chuck wasn't pushing to make it permanent. That is a bad idea. I have a better one, but it will never happen in a million years.
I would sort of like to see Obama just let the Bush rates expire. All of them, for everyone. Yes, he will have broken his promise to taxpayers under $250K, and he'll suffer in the polls for a while, no doubt. And then...
Well, says Michael Linden of the Center for American Progress, letting all the Bush cuts expire would...let him say it: "The short answer is that letting all the Bush tax cuts expire would generate $4.5 trillion over ten years in revenue, and reduce the deficit by $5.3 trillion over that same period. The difference between those two numbers is the reduced interest payments since, with all that additional revenue, we’ll have a lot less debt."
The projected deficits over the next 10 years come to around $12 trillion. So this one move would cut the deficit by nearly half. Throw in the spending cuts that both parties have agreed to, $1.5 trillion over a decade, and 57 percent of the deficit is gone. Add in a stronger economy (i.e. greater corporate tax revenues etc.), and the deficit won't be an issue.
Now, I'm not saying here that I believe that the deficit is the number one issue. I don't. But millions of Americans do seem to think it's mighty important. So let's put the choice to them. You're bugged by the deficit? You want to see something done about? There is only one thing that can be done that can practically cut it in half in one fell swoop.
Right-wingers will scream cut, cut, cut. But you can't cut that much. Just can't. It'll start eating into things that even they support. Despite what they have been told and believe, that much fat simply isn't on this goose anymore.
Obama's numbers would dip down into probably the mid-30s if he raised everyone's taxes. But Bill Clinton did it and he survived it. By year two, or three, moderate voters would see, "Ya know, I don't love paying more in taxes, but I do see that this is producing more revenue and helping reduce the deficit, so maybe it's actually true that there's a connection here." Do you think Clinton's surplus had nothing to do with higher tax revenues?
Then, maybe just maybe, after people will have seen that a) Clinton tax increases helped move us into surplus, b) Bush tax cuts helped cause a massive deficit, and c) Obama tax increases helped fix that hole, then maybe just maybe people will finally start to ignore the lies they get fed and be able to add two and two and get to four.