JONATHAN CHAIT SEPTEMBER 23, 2010
So it looks like the Democrats are going with the Curl Up In A Fetal Position Plan on taxes, apparently deciding not to hold any vote at all. Greg Sargent thinks the party lacks balls, and draws a comparison to the health care debate. But it's not a god perfect comparison. Health care reform was upside-down in the polls last March. Passing it took "balls" to the extent that democrats had to realize that the damage of not acting, at such an advanced point in the process, outweighed the damage of acting.
On taxes, the Democrats' current position is the sellout. Their position is to pass a major tax cut on all income under $250,000 -- a totally unaffordable policy. Having balls would mean letting all the tax cuts expire after promising to extend them for the middle class.
Here's the really crazy thing. Moderate Democrats worry that passing a tax cut for income under $250,000 would be portrayed as a tax hike, because it allows rates to rise on income over $250,000. As I've noted several times, that could be solved by holding a separate vote. But the moderate Democrats' solution is not to hold a vote on any tax cuts. In other words, they're worried that failing to vote on a tax cut for the rich will be portrayed as a tax hike on the middle class. Answer: decide not to vote on a tax hike for the middle class either.
If this winds up with a total stalemate and no extension of tax cuts for anybody, it's a huge policy win. At the same time it's sheer political suicide. Just one of the nuttiest decisions, on pure political grounds, I've ever seen.