President Obama, who campaigned on repealing the breaks for the wealthy, angered his base last year when he agreed to extend all the tax cuts beyond their original expiration, at the end of 2010. This time, the president has vowed to veto any effort to extend the tax breaks on upper-income Americans.
Democratic lawmakers had hoped that the potential loss of these breaks in a little more than a year would prompt Republicans to offer larger concessions on the supercommittee, but a deal has remained elusive.
The deadlock on the committee offers the latest reminder that the country’s political class seems unable to address fundamental national problems unless faced with an immediate crisis. In this case, the Bush tax cuts — and, with them, the fate of the nation’s precarious finances — will in all likelihood be punted beyond next November’s election.
That makes December 2012 the next critical deadline in the budget wars, with Obama, safely reelected or acting as a lame-duck president, wielding a veto pen with the power to return tax rates to Clinton-era levels.
Democrats say they see the issue as an easy way to portray Obama’s opponent in the presidential election as a defender of tax cuts for the rich.
Republicans vying to challenge Obama argue the tax cuts should be made permanent, not just for the wealthy but for middle-income Americans as well. And GOP strategists say the White House’s position makes the president vulnerable to charges that he would impose what many Republicans are already calling the “biggest tax increase in American history” if reelected. “We’ll run against their tax increase,” said GOP anti-tax activist Grover Norquist, “and we’ll crush them.”
The competing views on the Bush cuts helped stymie the supercommittee, which had been tasked with trimming at least $1.2 trillion from the deficit over the next 10 years but reached an impasse in large part over the question of raising taxes.
Republicans charged Sunday that Democratic unwillingness to compromise on cutting programs such as Social Security and Medicare prevented a deal. But the supercommittee’s Democratic co-chair, Sen. Patty Murray (Wash.), said Sunday on CNN’s “State of the Union” that the Bush tax cuts were “the one sticking divide.”
Referring to those cuts, she said: “The wealthiest of Americans, those who earn over a million dollars every year, have to share, too. And that line in the sand we haven’t seen any Republicans willing to cross yet.”