The word on the streetfirst heard on the Huffington Post, which runs down the left side of Cyber Lane — is that Barack Obama is ready to cave in the fight over tax hikes for the (comparatively) rich.
If this is true — or even comparatively true — it would not only be bad policy. It would also be a terrible misreading of the recent shellacking at the polls, not to mention a portent of more shellackings to come.
The Democrats are in need of a good post-election fight. If this is the time, the coming lame-duck Congress (the perfect visual, by the way) is the place.
Everyone’s got a theory on the huge reversal of political fortunes between 2008 and 2010. You might think it was a lightning-quick recalculation of the American body politic, which seems unlikely to me. Do we move that quickly? I mean, ever?
Or you might think — as I do — that since this was a third consecutive wave election, it was yet another loud statement that government is not doing its job well enough.
Well, here’s a test.
As you know, the Bush-era tax cuts expire at the end of this year. Everyone now favors making the middle- class tax cuts permanent. This is not just a matter of pandering to the largest segment of the population — always a temptation. There’s also the fact that middle-class income has been stalled for years. And that was before the housing bust and before the credit bust and before the rest of the economy went bust.
Fortunately, if you were wealthy, you probably have done OK. And Democrats, noting this, want to permanently end the tax cuts on any income over $250,000. It came right after hope and change in Obama’s campaign speeches. And why not?
Only about 3 percent of families earn more than $250,000. And there’s also that whole budget deficit issue. According to Obama, ending those tax breaks would add $700 billion in revenue over the next 10 years.
Who in the name of the Tea Party could possibly object to that? Can you really be for tax cuts for the rich and also for deficit reduction?
OK, apparently you can be. Republicans want to keep all the tax cuts because there’s nothing Republicans like more than tax cuts, particularly those for really rich people. That’s not exactly how the argument is being framed, of course.
According to the theory, it’s the wrong time — now and forever — to raise taxes on the rich, because it’s actually, we hear, a tax on small businesses, meaning a tax on those mom- and-pop businesses on the corner, as if mom and pop were the ones clearing 250 grand.
If we let those marginal tax rates rise — we’re talking 3 percentage points on income from $250,000 to $375,000 — it would apparently shut down the job creation. That might be a better argument if the years since the Bush tax cuts hadn’t been such a job-creating disaster.
According to the exit polls, only 40 percent of voters said we need to keep the tax cuts for the rich, although a post-election poll did show that number already growing to just more than 50 percent. That’s what winning can do for you.
But there’s winning and then there’s overreaching, which is what winners typically do.
The irony of Obama’s first two years is that, for all his communication skills, he has yet to fashion a theme for his presidency. I was reminded of this by the sudden, shocking reappearance of George W. Bush, who’s everywhere now on his book tour for “Decision Points.” His best decision, many Republicans will tell you, was to not release the book until after the midterms. A quick review: Waterboarding good, Kanye West bad (really, really bad), Dick Cheney not as bad as you think. You can do your own campaign ad.
But maybe the most interesting thing in the book is when Bush talks about facing the economic meltdown and his decision to bail out the banks. “If we’re really looking at another Great Depression,” he said at the time, “you can be damn sure I’m going to be Roosevelt, not Hoover.”
This was Bush making a tough call — FDR over Hoover. I wonder what Glenn Beck would say. And even if you want to blame Bush for the deficits, for the wars that were paid for off the books, and for anything else, he did reverse core philosophy, and for all the right reasons.
The Republicans now are looking for a showdown on taxes — against those tax-and-spend Democrats. They say they’ll filibuster any attempt to decouple — the word of the day — middle-class taxes from rich-guy taxes. The compromise they’ll accept is to pass temporary tax cuts for everyone, or for no one. If the taxes are always coupled, then the end of the tax cuts for the rich never comes.
And yet, what better opportunity for Obama to show some, uh, core philosophy — and, not incidentally, to show Republicans on C-SPAN voting against tax breaks for the middle class in order to protect tax breaks for the rich?
It would be a defining moment. Of course, there’s defining and there’s defining. If Obama really does cave, he may have to call his memoir “Blinking Points.”
Mike Littwin writes Sundays, Wednesdays and Fridays. Reach him at 303-954-5428 or mlittwin@denverpost.com.
