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As Co-Chairs of the Congressional Progressive Caucus, we would like to reiterate our support for President Obama's Fiscal Year 2011 budget proposal that would extend the Bush tax rates for the middle class, but permit the tax levels to return to previous levels for single taxpayers making more than $200,000 or married couples making more than $250,000. We respectfully request that we have a Caucus discussion regarding our position before any proposal is brought to the Floor. The Treasury Department estimates that President Obama's tax proposal will collect $41 billion in additional revenue in Fiscal Year 2012 and $680 billion over the next ten years. If we are serious about cutting our budget deficit, we must allow the Bush tax cuts for the wealthiest to expire. Before President Bush's tax cuts were enacted, the federal budget had a steadily rising surplus that the Congressional Budget Office (CBO) estimated would hit 5.3 percent of GDP by 2011. Within a few years of the enactment of the Bush tax cuts, these projections turned to deficits. Therefore, we believe extending the Bush tax cuts would be a giveaway to the nation's wealthiest people and would significantly increase government debt. This debt, in turn, will be paid by the lower and middle classes through increased interest payments and decreased social services for generations to come. This astronomical sum could instead be used to close our budget deficit. It is critical that we pass President Obama' s middle-class tax proposal without providing an even greater lift for the wealthiest Americans.It remains incomprehensible to me how the Democrats don't see this as a political winner. As Greg Sargent says, holding such a vote would "force Republicans to vote for Obama's proposal, or against a middle class tax cut. By contrast, a phony 'compromise' on a temporary extension of all the cuts would only muddy all these waters further [and] merely telegraph Dem weakness, signaling clearly that Dems will cheerfully give the GOP their way as long as everyone agrees to call it a 'compromise.'"
As opposed to the progressives' position, we have two Democratic Senators floating their ideas for a compromise. Charles Schumer suggests raising the threshold to $1 million, rather than $250,000, and Mark Warner wants to let just the high-end cuts expire for two years while using the revenues gained to cut taxes for small businesses. Jon Walker at Firedoglake explains why these proposals fail to shift the debate: "If Democrats actually want to win political fights, they need to pose a stark choice between their own position and that of the Republicans. Neither Schumer’s compromise or Warner’s wonky proposal does that. That is why Democrats need to make this a clear choice between their wanting to provide direct help to all working Americans, and Republicans demanding that money be funneled to the wealthy."
Paul Krugman's column today notes that Obama appears to be ready to "give in to Republican demands that tax cuts be extended for the wealthy as well as the middle class." Krugman argues that, instead, "Obama could and should be hammering Republicans for trying to hold the middle class hostage to secure tax cuts for the wealthy. He could be pointing out that making the Bush tax cuts for the wealthy permanent is a huge budget issue — over the next 75 years it would cost as much as the entire Social Security shortfall. Instead, however, he is once again negotiating with himself, long before he actually gets to the table with the G.O.P." Steve Benen of Washington Monthly sums it up: "I've never seen a party so afraid of doing the obvious, popular thing that puts their rivals on the defensive. It's a gift-wrapped present that Dems seem afraid to open."
[Related posts: Weak in Preview, Greider on Obama, Let's Make a Deal, Wrong Lessons]
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