We are still months away from the so called “fiscal cliff” or “taxmaggedon” when among other things the Bush tax cut extension expires. But the Democratic leadership has already started negotiations against itself. With negotiations with the GOP not having really begun, Pelosi has already moved the Democratic ask to the right in a preemptive surrender. From Pelosi’s letter to Speaker John Boehner:
Without further delay, the Majority Leadership should schedule a vote on extension of the middle-income tax cuts, as early as next week, to increase certainty for millions of American taxpayers and for the economy. We should not delay passing this legislation that will help afford all Americans the opportunity to reach their goals and realize the promise of the American Dream.
We must ask the very wealthiest Americans to pay their fair share. Democrats believe that tax cuts for those earning over a million dollars a year should expire and that we should use the resulting revenues to pay down the deficit.
By ensuring that the middle-income tax cuts do not expire, we will put money into the pockets of American consumers, saving the typical middle-income family thousands of dollars per year. Extension of this middle-income tax cut will inject demand into our markets and strengthen small businesses. By investing in both the short-term growth of our economy and the long-term prosperity of our nation, it will empower the entrepreneurial spirit of the American people. We cannot afford another manufactured crisis that unnecessarily threatens the full faith and credit of the United States and jeopardizes our economic recovery.
Since President Obama began his campaign back in 2007, the plan was to let the tax cuts expire for those making over $250,000 a year. While the process has been slow, the Democratic leadership’s line now seems to have been officially moved up to only ask the tax cuts expire for those making over $1,000,000 a year. This is really moving the goal post without any concession on the other side.
Given that Democrats didn’t actually end the Bush tax cuts for those making over $250,000 when they had the opportunity to do so easily using reconciliation in either 2009 or 2010, I’m forced to question whether the Democrats really ever wanted to see taxes on this group return to levels in the Clinton era.
If this is an actual policy negotiation move by Pelosi, it would be pathetic. But if Democrats’ past behavior means that they intended to only ever use this as a political talking point but never implement it, they might as well switch to some number that sounds better in a 30 second TV ad. I suspect the change was purely for political reasons, because “one million dollars” rolls off the tongue and polls slightly better than $250,000. If it’s all meaningless political posturing, we might as well go with the best sounding posture.
Regardless whether this move is an act of pure political cynicism, preemptive compromise or some combination of the two, it hardly makes the Democrats look good.