As I noted yesterday, the war of words over whether tax hikes will be part of the second round of deficit reduction is well underway. Keith Hennessey with considerable assistance from Chuck Blahous has the best explanation of what is going on here. They use two questions to explain the debate. The first:

What does a current law baseline mean for hypothetical tax increase proposals in the Joint Committee?

Administration: We want to let current rates expire for those earning more than $250 K.

Joint Committee: Sorry, that doesn’t score as reducing the deficit. Under current law, those rates would expire for everyone. You can include it if you want, but it won’t help you meet your deficit reduction target.

Administration: OK, then, we want to impose a new surtax on sugary breakfast cereals.

Committee: OK, that counts as reducing the deficit.

The Administration is claiming the new Budget Control Act does not “require” the Joint Committee to use a current law baseline, I think because they’re getting blowback from their Left for agreeing to it. After reexamining the legislative language, I agree with House Budget Chairman Paul Ryan that this claim is absurd.

Then Hennessey and Blahous ask and answer a key question about baselines:

Is the Joint Committee required to use a current law tax baseline?

Administration: We want to score a tax proposal in relation to a different baseline. Nothing prevents you from requesting that.

Committee: Well, nothing prevents us from requesting that or anything else from CBO, but the law says our proposals must be scored relative to the current law baseline, and that we must vote on a report that includes that score relative to the current law baseline. So, scoring by other baselines has no value to us.

The Democrats by this point must understand what the legislation says. But theirs is a political argument, intended to rally the liberal base. And we get it: No law is going to muzzle the tax-hike cheerleaders.

Republicans have responded to the Democrats with statutory arguments. But quietly they are delighted. You can see it now: Ad after ad in 2012 showing how determined President Obama is to raise taxes.

You do have to enjoy the comic irony. Obama yesterday recited another ode to job creation. He told the country that “when Congress gets back from recess, I will urge them to immediately take some steps — bipartisan, common-sense steps — that will make a difference; that will create a climate where businesses can hire, where folks have more money in their pockets to spend, where people who are out of work can find good jobs.”

You would think that someone in the White House might suggest that perpetually threatening to raise taxes acts as a drag on hiring. Whatever. Right now, and until the 2012 election, for Obama it’s all about politics and virtually nothing about policy.