This story from Jay Newton-Small of Time confirms what I posted earlier today about the Senate Democratic leadership wanting to vote before the election on extending the tax cuts enacted during the Bush administration.
I will resist the strong urge to say I told you so.
Here's the money quote:
The emerging tax plan is designed, as much as anything else, to clarify the differences between the two parties as they hurtle toward the fall elections. Following on their success with the financial-regulatory-reform bill, Democrats are betting that Republicans will once again take up a legislative battle on behalf of the wealthy. "Republicans are going to have a real choice ahead of them," says a Democratic aide.
In my Fiscal Times post today I provide more links to the rapidly growing literature endorsing fiscal consolidation and throwing cold water on the value of fiscal stimulus. (Earlier links here.) The German-dominated European Central Bank is pushing the idea especially strongly, but the IMF and OECD are on the same team.
It's hard for me to disagree with Pete's reporting and analysis in his post from July 14 that Congress will likely vote to extend the tax cuts enacted during the Bush administration in a lame duck session after the election.
But Pete's statement is misleading. Although Congress as a whole is more likely to act after the election, the Senate is far more likely to debate and pass the extension before the election. In fact, the only way the Senate may be able to get enough votes to stop what may be a virtually inevitable filibuster is if it acts before anyone goes to the polls in November.
The calculus for the Senate Democratic leadership has become a bit easier in recent days as the Republican leadership has increasingly indicated it wants all of the tax cuts -- including the three provisions (the 35 percent top marginal rate on individual income and the 15 percent rate on dividends and capital gains) whose extension the White House did not propose
Courtesy of The Rachel Maddow Show last evening:
Over the weekend Republicans unveiled their brilliant new political strategy strategy: the George W. Bush years were the good old days and we should go back to them. A stupider strategy is hard to imagine. The Bush years were an unmitigated disaster. Here is a quick list of his screw-ups off the top of my head in no particular order. Readers are encouraged to add others in the comments.
Thinking that Iraqis would welcome liberation and immediately embrace Western-style democracy, and failing to manage the occupation of Iraq properly. (How can people defend Bush on the basis that he kept us safe after 9/11 without also blaming him for 9/11? If he had the power to keep us safe after 9/11 then why didn’t he keep us safe on 9/11?)
On July 13, Senate Minority Leader Mitch McConnell, R-Kentucky, asserted that there was no net revenue loss from any of the Bush tax cuts, in defense of an earlier comment by Senator John Kyl, R-Arizona, that all spending increases must be offset so as not to increase the deficit but tax cuts must never be offset. Said McConnell:
New York City Mayor Michael Bloomberg gave the inaugural Presidential Lecture at Dartmouth yesterday. It was a very engaging hour, spent roughly half in lecture mode and half in Q&A. I think mayors are fascinating people to put in front of students. Most public policy issues have a local dimension, and in many cases -- health, education, the environment, for example -- local actors will play very important roles. And mayors are the people we elect to get things done. According to Bloomberg, what's the most important public policy issue facing the nation? Immigration.
Enjoy!
There's been an enormous amount of media commentary in recent days on President Obama's slipping popularity and what he woulda coulda shoulda done differently. One day after Obama scored his latest big accomplishment -- passage of the huge financial reform bill-- the NYT puzzles over why Obama's star is falling and says he hasn't been able to "change the partisan tone in the capital." In Politico, editors John Harris and Jim Vandehei say Obama "has shown himself to be a Big Government liberal,'' which is "killing him with independent-minded voters."
I'm skeptical about journalistic second-guessing about political tactics and messaging. When unemployment remains stuck above 9 percent, with a huge share of those people jobless more than six months, nobody is going to be popular.
That said, two new pieces today -- one in Salon and one in the Fiscal Times -- offer specific examples of tone-deafness at the White House.
President Obama went to Holland, Michigan, yesterday to focus attention on the impact that the American Recovery and Reinvestment Act will have on communities hard hit by the economic downturn. Jonathan Cohn is on the case, and he describes the scene as follows:
Under the American Recovery and Reinvestment Act, the Department of Energy has made a mutil-billion dollar investment in electric cars, by providing matching grants to companies that help build the cars or the facilities that will help them run. One of those grants went to Compact Power, Inc, a subsidiary of a Korean company, in order to build a factory in Holland that will produce the batteries that go into Chevy Volts and other new electric vehicles.
The company, which matched the $151 million federal grant dollar-for-dollar, says the factory will eventually employ 300 people--most of them in the kind of well-paying manufacturing jobs that are increasingly hard to find. Eight other factories like it are under construction, most of them in the Midwest. By 2015, the administration estimates, domestic manufacturers will get nearly half of the batteries for plug-ins and hybrids from U.S. factories. Right now, car-makers rely almost entirely on foreign factories.
Cohn's is a thoughtful post in which he lays out the advantages and disadvantages of this investment as a strategy for recovery and reinvestment. I commend the whole thing to your attention. I would only add a few relevant points.
In my Fiscal Times column this morning I look at the Fed's options and constraints in terms of stimulating growth through monetary policy now that additional fiscal stimulus is effectively off the table.
