The Senate made it official last night that they would not move forward on the Bush tax cuts until after the election. Here’s the statement from Harry Reid’s spokesman, Jim Manley:
“Democrats believe we must permanently extend tax cuts for the middle class before they expire at the end of the year, and we will. Unfortunately, to this point we have received no cooperation from Republicans to do so. Democrats will not allow families in Nevada and across the country to suffer or be held hostage by Republicans who would rather give tax giveaways to millionaires and corporations that ship jobs overseas. We will come back in November and stay in session as long as it takes to get this done.”
It’s not clear who drove this decision, but it doesn’t really matter. The White House and Congressional Democrats say they’ll continue to use basically the same language, that Republicans are holding tax relief for the middle class hostage. That was certainly David Axelrod’s message on yesterday’s conference call with liberal bloggers and writers:
I don’t think anybody in American at this point doubts where the president is, where we are, and where the Republican Party is. We will repeat it every day. The Republican Party is holding hostage tax cuts for the middle class. If the Republican Party would allow us to move forward in the senate, without using procedural techniques, we could do that… So I don’t think there is going to be any ambiguity about where we stand or they stand and I am very, very confident that we will ultimately win this fight because I don’t think the American people are going to sit still and allow the republicans to inflict a tax increase on them… to facilitate additional tax relief for millionaires and billionaires.
I think the problem with this is obvious, right? All anybody will see is that Democrats walked off the field. If Republicans actually blocked a vote, there’s at least evidence for this claim. Unlike in the House, where ensuring a clear contrast would be tricky given the motion to recommit and other procedural games, I don’t think there are 19 Democrats in the Senate who would abandon the party on a straight vote on tax cuts for millionaires, though I could be wrong. Therefore you could have structured the vote to show a somewhat clear contrast, although you’d definitely get some defectors. But some skittish Dems don’t ever want to talk about taxes because they think they’ll lose the argument even when the public is on their side. So they walked away. And it just feeds a narrative of weakness. I think the tax cut debate reflects more a conservative working majority in Congress, but in the “win the day” of politics, Democrats lost big here as well.

The replacement for this will be that strange anti-outsourcing bill which may create tens of jobs. It eliminates some loopholes that encourage corporations to ship jobs overseas, which is fine, but it uses those funds to create a two year employer-side payroll tax holiday for companies which repatriate jobs from abroad. Unless the company planned to “insource” anyway, I fail to see how a credit like that would attract any company to move their operations. There’s a conference call a little later on this, so I’ll see what I can find out.

UPDATE: Just to reinforce the fact that many Democrats see giveaways to the rich, their fellow class, as just sound policy, read this letter from some House Democrats to Sander Levin of the Ways and Means Committee. They actively want to protect mega-millionaire investment fund managers paying lower marginal tax rates than secretaries and janitors. By the way, the co-author of this letter, Jared Polis, is a member of the Congressional Progressive Caucus.