Compromise possible on tax cuts

Our view: House minority leader's shift on issue suggests there may be some GOP support for middle class tax break after all

September 13, 2010

Finally, a sign that Congressional Republicans may have some flexibility after all. House Minority Leader John A. Boehner's recent disclosure that he'd be willing to vote for President Barack Obama's proposed tax break for families earning $250,000 or less demonstrates that a compromise over Bush-era tax policy is possible.

It appears Mr. Boehner has recognized that outrage and extremism only gets you so far. The GOP's all-or-nothing approach to tax cuts — reminiscent of the party's oppose-at-all-costs philosophy toward the president's agenda generally — wasn't going to play well with working class Americans.

At stake are the income tax cuts approved under the first term of the George W. Bush administration that are set to expire at the end of the year. If Congress does nothing, everybody's taxes go up. Democrats want to preserve the cuts for the middle class but oppose extending the tax break to the wealthy, and rightly so. What was a mistake in 2001 would be just as great a mistake today.

But the GOP has made a lot of political hay during the Obama term by digging in their heels and avoiding political engagement. This brand of ideological purity is not only appealing to the party's right-wing, but as the economic recovery lags, it's extremely helpful for ducking responsibility in an election year.

It's also quite possible that Mr. Boehner knows he can safely play the role as voice of reason on Sunday TV talk shows because Republican senators are bound to block the president's middle class tax cut anyway. GOP senators may rail against the deficit, but they don't mind worsening it by making the Bush tax cuts permanent across the board.

Of course, all that is going to accomplish is gridlock and the assurance that nobody gets a tax break. But too many conservatives smell blood in the water to readily change course so close to November.

The critical question, of course, is what effect will any of this have on the economy? While President Obama's stimulus spending had some immediate benefit (if not nearly enough) with its investment in public works projects, the green economy, targeted tax cuts and the preservation of thousands of jobs for teachers and public safety personnel, the proposed extension of the Bush era tax cuts is unlikely to provide a boost of great consequence. The better argument is that not extending them amounts to a tax increase that could harm a still-fragile recovery.

But at what cost? The unhappy prospect of borrowing billions of dollars and worsening the deficit so that millionaires can continue to pay less in taxes is a line that is serving the White House well because it's true. The GOP can complain about "class warfare" all they want, but it's easy to complain about such combat when you're one of the small number on the winning (wealthy) side.

Should the Bush tax cuts expire, America wouldn't exactly be plunged into the abyss. It would simply be a return to Clinton era tax rates, a time of record prosperity, incidentally.

Mr. Boehner's position doesn't signal a consensus, of course, and it may just be a Lucy-like political move so that he or others can subsequently pull the football from under trusting Charlie Brown Democrats. But it suggests President Obama's more reasonable approach to the tax cuts is gaining some traction on the Hill, and that's welcome news.

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