Despite an election that delivered a mandate to raise taxes on the wealthiest Americans in order to reduce the deficit and invest in the middle class, Republicans are standing pat in their support for the wealthy over the middle class. Today Speaker Boehner (R-OH) once again ruled out tax increases for the wealthy, as did Senate Minority Leader Mitch McConnell (R-KY).
During remarks at the White House today, President Obama once again called on Republicans in the House to immediately pass a bill extending tax cuts for 98 percent of Americans:
While there may be disagreement in Congress over whether or not to raise taxes on folks making over $250,000 a year, nobody — not Republicans, not Democrats — want taxes to go up for folks making under $250,000 a year. So let’s not wait. Even as we’re negotiating a broader deficit reduction package, let’s extend the middle-class tax cuts right now. Let’s do that right now. (Applause.)
That one step — that one step — would give millions of families — 98 percent of Americans and 97 percent of small businesses — the certainty that they need going into the new year. It would immediately take a huge chunk of the economic uncertainty off the table, and that will lead to new jobs and faster growth. Business will know that consumers, they’re not going to see a big tax increase. They’ll know that most small businesses won’t see a tax increase. And so a lot of the uncertainty that you’re reading about, that will be removed.
In fact, the Senate has already passed a bill doing exactly this, so all we need is action from the House. And I’ve got the pen ready to sign the bill right away. I’m ready to do it. (Applause.) I’m ready to do it. (Applause.)
As the president noted, the Senate has already passed such a bill. House Republicans are literally the only thing standing in the way of trillions of dollars in tax cuts for 98 percent of Americans.
And the president also reminded Republicans of the mandate he won on the issue of taxes:
And I just want to point out this was a central question during the election. It was debated over and over again. And on Tuesday night, we found out that the majority of Americans agree with my approach — and that includes Democrats, independents, and a lot of Republicans across the country, as well as independent economists and budget experts. That’s how you reduce the deficit — with a balanced approach.
So our job now is to get a majority in Congress to reflect the will of the American people.
Finally, we’d note that a new report from the Congressional Budget Office shows that ending tax breaks for the wealthy will have a negligible impact on the economy.
Why This Fight is Different
In the previous crises manufactured by Republicans, the fight over the Bush tax cuts in 2010 and the debt ceiling debacle of 2011, Republicans held most of the cards.
In 2010, the economy was weak and the president didn’t want to do anything to risk weakening it further, including the possibility of extended unemployment benefits or other stimulative measures expiring. So in order to protect those two things and guarantee that middle class taxes would not increase, the president reluctantly agreed to extend the Bush tax cuts for the rich for another two years.
In 2011, the Republicans appeared fully willing to crash the entire economy in order to get what they wanted. The president was not willing to take that risk.
This time, things are very different. The president just won an election with a mandate on this very issue. It’s also very to raise taxes on the wealthy. In fact, it happens automatically if there’s no deal by the end of the year.
Everyone else’s taxes will go up as well and it seems hard to imagine that Republicans could resist the immense public pressure to pass a middle class tax cut-only bill come January. During last December’s fight over extending the payroll tax cut, Republicans balked and the president took his case directly to the American people. Republicans then caved within days. It appears something similar may be in the works if this fight spills over into January:
One top Obama adviser, however, told ABC News that if the House GOP refuses to cut a deal with the president that includes some tax increases on the wealthy, the tax cuts will expire. One scenario the official discussed included the president barn-storming the country, telling the public that Democrats will put forward a bill to restore middle class tax cuts as soon as Congress convenes, and calling on them to pressure Republican congressional leaders to stop holding those tax cuts hostage in exchange for tax cuts for wealthier Americans.
It’s also worth noting that in the next Congress there will be fewer Republicans in the House and, more importantly, in the Senate.
BOTTOM LINE: Instead of drama, manufactured crises, and hostage taking, Republicans should immediately extend middle class tax cuts and agree to a balanced approach to solving our fiscal problems.