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ThePlumLIneGS whorunsgov plumline
Posted at 09:00 AM ET, 11/09/2012

The Morning Plum: Dems should call GOP’s bluff on tax hikes

For months, President Obama pointed out — rightly — that the single greatest obstacle to a compromise between the two parties remained their seemingly unbridgable differences over whether to raise taxes on the rich. In a campaign focused heavily on the proper moral responsibilty the most successful have to give a bit more back to the society that helped enable their good fortune, at a time when the middle class continues to take a beating, Obama repeatedly asked voters to break this “stalemate.”

On Tuesday, they did — in Obama’s favor. Yet Republicans interpret the results very differently. They argue that the fact that they retained the House has given them a mandate to hold the line against higher tax rates on the rich. Indeed, John Boehner is now arguing that high end tax hikes have no prayer of ever passing the House.

Putting aside the argument over the election results, what does this mean for the next few months? Today Obama is set to make a statement on the economy that will hint at how Dems plan to proceed.

If Republicans won’t agree to budge on high end taxes, Democrats can simply do nothing, let all the Bush tax cuts expire, and allow us all to go over the fiscal cliff. As many have pointed out, while there’s no minimizing the long term risk to the economy that poses, a deal early in 2013 would prevent any real damage. Senate Dems can simply come back in 2013 with their stronger, more liberal majority and vote on restoring just the middle class tax cuts. As David Dayen noted recently, they can vote on the Obama tax cuts for the middle class.

Republicans would then be challenged to vote against them. True, they have proven willing to do that before — the House GOP voted against a plan to extend just the middle class tax cuts this summer, insisting that taxes on the wealthy must be extended, too.

But this time, Republicans would have to vote against the Obama middle class tax cuts after Obama decisively won an election that was, at bottom, a straight up clash of philosophies over how best to restore long term middle class economic security. They’d have to do this at a time when the political world is consumed with talk about the serious “soul searching” Republicans must do about the way forward.

As Roll Call’s Steven Dennis puts it, if Republicans don’t budge, Obama can launch a public campaign asking why Republicans are threatening to tank the economy to protect the wealth of the one percent — painting Republicans as the unrepentant party of the rich. A post-election vote on middle class tax cuts would constitute a direct challenge to Republicans as to whether they will heed the will of the people as it was expressed on Tuesday.

*************************************

UPDATE: Actually, ignore the previous update I posted here. The original, above, is accurate.

* Schumer says “chastened” GOP will agree to deal: Dem messaging chief Chuck Schumer says the Tea Party ranks in the House have been so weakened by Tuesday’s results that an agreement on taxes is more likely. Note Schumer’s interpretation of the election results:

“You elected a Republican House, and what was their watch-word: cut spending. You elected a Democratic Senate and a handsome victory for President Obama. What was our platform? The wealthy should pay a little bit more and there should be new revenues. Just marry the two.”

This is fairly simple. If you reach what’s known as a “compromise,” it means that both sides make concessions. And so, a mix of spending cuts that Democrats don’t want, and tax hikes on the wealthy that Republicans don’t want, would constitute a “compromise,” one very much in keeping with the election results.

* Obama should hang tough in fiscal cliff talks: Paul Krugman rightly notes that Obama has all the leverage, and adds a point I hadn’t heard before. He theorizes that the GOP’s position might be weakened, because “a stalemate would hurt Republican backers, corporate donors in particular,” meaning “Republicans would face intense pressure to cut a deal.”

* Another bogus GOP talking point crashes and burns: As the fiscal cliff talks heat up, you’ll be hearing a lot of Republicans claiming that hiking taxes on the rich will kill 700,00 jobs right away. But as Glenn Kessler documents, the study that this claim is based on falls laughably short of supporting that claim.

Footnote: A recent nonpartisan report found no correlation between top tax rates and economic growth, which Republicans responded to by simply making it disappear.

* Looks like Obama will win Florida: Miami Herald writer Marc Caputo, who’s monitoring the Florida vote counting, tweets that it’s “still trending Obama.” The current numbers: 49.9 to 49.2. A win would put Obama’s electoral count at 332 — a small victory!

* Cuban-Americans supported Obama: Via Tagean Goddard, the Wall Street Journal has more bad news for Republicans: In Florida, Romney won among those born in Cuba, 55-45, but Obama prevailed by 60-40 among Cuban-Americans born in the United States. The Cuban vote, of course, is key to the GOP coalition in this pivotal swing state, so this could be yet another way changing demographics are leaving the GOP behind.

* GOP tries to figure out what went wrong: Peter Wallsten reports that chastened GOP officials are planning extensive focus grouping and research to determine how the party can broaden its appeal. But there’s also this:

Party officials said the review is aimed at studying their tactics and message, not at changing the philosophical underpinnings of the party.

Without a shift in core positions on immigration, gay rights, women’s health and high end tax rates, among other things, how much of a difference will a retooling of tactics and message make?

* Romney lacked positive vision of government: Michael Gerson has a clear eyed diagnosis of why Romney fell short: He never articulated any positive role government can play in improving people’s lives, which may have alienated voters who don’t hate government and want it to help address their challenges. Voters heard Romney attack Obama for saying, “you didn’t build that,” and they agreed with Obama.

* And the GOP’s Latino problem goes beyond immigration: Kevin Drum illustrates that conservatives need to undergo a very thorough housecleaning if they want the GOP to survive in an increasingly diverse future.

What else?

By  |  09:00 AM ET, 11/09/2012

 
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