JULY 27, 2012
Talking Point Memo’s Brian Beutler argues, persuasively, that this week’s tax cut votes in the Senate were a bigger deal than most of us realized. The Republicans voted to extend the Bush tax cuts for everybody, and the Democrats voted to extend them only for family income up to $250,000. It was so obvious that neither bill was going anywhere that the Republicans didn’t bother to filibuster. Predictably, the Republican bill failed, 45-54, and the Democratic bill—which has no chance of clearing the Republican-controlled House—passed, 51-48. No surprises there.
Except, Beutler reminds us, Senate passage of the limited tax-cut extension, with the $250,000 threshold that Obama's favored for years, should surprise us. In the past Senate Majority Leader Harry Reid could never round up enough Democrats to pass the Democratic tax bill in the Democratic-controlled Senate. It’s easy to forget how lame Senate Democrats can be (perhaps because the memory is so painful):
[T]hey didn’t do it in the brief period when they had 60 votes. They didn’t do it via the budget process, which would’ve required rounding up only 50 votes, and they were so scared of every GOP utterance by the fall of 2010 that they didn’t even effectively turn GOP hostage-taking into an effective political weapon. Senate Democrats fractured over whether to set the expiration threshold at $250,000 or $1 million, and even at that higher bar they weren’t able to unite in a way that clarified the Republican’s politically noxious legislative strategy. House Democrats were in even greater disarray. It was a mess.
Obviously many things are different now. Obama’s on the ticket this time. His opponent is a poster child for tax inequity. A sea change in national politics has made it easier for politicians to address issues like inequality.
Smart politicking by Obama, Reid, and Sen. Patty Murray, D.-Wash, chairman of the Democratic Senatorial Campaign Committee, made the difference, Beutler argues. The Democrats still lost two votes—those of Sen. Jim Webb, R.-Va., a Republican-turned populist Democrat who represents a somewhat conservative state, and Sen. Joe Lieberman, a Democrat-turned conservative independent who caucuses with the Democrats. But you can’t blame either of their dissents on fears of voter reprisals, because both men are retiring from the Senate.
Why did Webb and Lieberman bolt? Well, they’re both pretty quirky, irritating people, and both of them voted against both the Democratic and the Republican bills for reasons that are characteristically ... quirky and irritating. Webb refuses to vote against any income-tax increase on wages, even for the rich, because he thinks we need to raise taxes on capital gains and dividends instead. “Two-thirds of the money that is being made by the top 0.1 percent in this country—that’s 140,000 taxpayers—is being made from passive income,” Webb said in a prepared statement after the votes. I’m all for raising taxes on capital gains (they should be taxed at the same rate as wages), but if your beef with the tax system is that it favors the rich, then it’s perverse not to raise taxes on them wherever you can. Lieberman refused to support either bill because he's holding out for “a bipartisan, long-term debt elimination agreement” that includes tax reform and spending cuts. He’s making the perfect the enemy of the good. Me, I’m not persuaded that the “perfect”—tax reform—is even desirable right now.
Perhaps Webb and Lieberman would have voted differently had they thought a.) that their dissent would cost the Democrats a symbolic victory or b.) that this bill had a chance in hell of becoming law. Effectively, they voted in favor of the “fiscal cliff,” which I continue to think is the best option of all. So maybe it’s churlish for me to feel irritated with them at all. But I can’t help being glad to see the Democrats (mostly) hang together, for the very first time, on Obama’s tax increase for the rich.