Thursday, December 9, 2010

A DREAM Deferred, And A Taxing Loss

The DREAM Act has died as Republicans have killed it.

Senate Republicans opposed the bill, standing by their pledge to block any legislation during the lame duck session until the chamber approves bills to extend the Bush tax cuts and fund the government.

The so-called Development, Relief and Education for Alien Minors Act would have affected immigrants who entered the United States illegally as children under the age of 16 and have lived in the country for at least five years. Other requirements include graduating from high-school or obtaining a General Education Development diploma and demonstrating "good moral character."

They killed it in retaliation for the House Dems blowing up the tax cut deal as predicted.  I figured the Senate Republicans would kill this too, but Nancy Pelosi used her gavel one last time.  I was hoping the Senate Republicans would kill it to avoid headlines like these:

House Democrats voted Thursday not to bring up a tax package that President Barack Obama negotiated with Republicans, raising questions over the president's influence in his own party.

"This message today is very simple. That in the form that it was negotiated, it is not acceptable to the House Democratic caucus," said Democratic Congressman Chris Van Hollen. "It's as simple as that."

Short version, the Dems will never accept the estate tax cut for the wealthy...

Two years ago the estate tax was 55%, with the first $1 million exempt. Then, in 2010, the rate fell temporarily to zero. But on January 1st, it's slated to become 35% on any amount over $5 million. And just because President Obama and the Republican leadership have arrived at a compromise, of course, doesn't mean it will find the votes to become law.

Indeed, a number of House Democrats told ABC News after their members caucused Tuesday night, that the estate tax provision is the element that is causing the most resistance to the tax cut compromise endorsed by President Obama and Congressional Republicans. 

...and the GOP will never accept the payroll tax cut for the working class.

Republicans acknowledged that the expiration of the tax holiday will be treated as a tax increase. "Once something like this goes into place, a year from now, when it expires, it'll be portrayed as a tax increase," said Sen. Bob Corker (R-Tenn.). So in a body like Congress, precedents matter and this is setting a precedent. I think that certainly is going to create some problems down the road if it passes."

Given that Congress, under Democratic control, can't gather itself to let tax cuts for the wealthiest Americans expire, members of both parties are convinced that letting the payroll tax rate revert back to its current spot will be near impossible.

"Once you bring a rate down, if it goes back up, people will feel that. They'll feel their paycheck being less and that argument" -- that letting it expire amounts to a tax hike -- "eventually is bound to be made," said Sen. Mike Johanns (R-Neb.).

"There's always a tendency to continue those things... Once something comes in, it's very difficult to change it," said Sen. George Voinovich (R-Ohio.) He then volunteered, without prompting, that "It would be detrimental to the Social Security system, especially when it's in bad shape."

So again, Mr. President...what's Plan B?  I've seen some ideas, but the White House is acting like this is the only option in town and that if it doesn't pass, we're all screwed.

President Obama warned his fellow Democrats on Wednesday that they risk plunging the country into a double-dip recession if they reject his tax-cut deal with Republicans.

Got news for you, ace.  We're already there.  We lost $1.7 trillion from the country's real estate wealth just this year.  Housing is already in a double dip as a result.  The rest of the country is following housing back down into the abyss.  I understand we need to try, but threatening a double dip recession if this isn't passed is too much for even me to take:  we're going to end up there anyway.

That was already a guarantee.  What's Plan B then?  Because your Plan A just blew up in your face.

Don't say you weren't warned.  All that remains now is for Senate Republicans to kill DADT repeal and we've got a big fat back to square one situation.

[UPDATEGreg Sargent echoes my own warning that the deal that will eventually pass now will almost certainly be far, far worse.

[UPDATE 2Steve M. wants to know what Plan B is, True Progressives Who Have A Better Plan Than Obama.  Let's see what you've got...

[UPDATE 3AP with the winning lede:

House Democrats voted Thursday to reject President Barack Obama's tax deal with Republicans in its current form, but it was unclear how significantly the package might need to be changed.

Well that's because the plan so far is:

  1. Reject Obama's SELLOUT of the middle class!
  2. ????
  3. Enduring progressive majority!
Step 2 I'm thinking involves Ralph Nader.


Lowkey said...

Well, that went well. Everybody's mad, nothing's changed, the session is finished (assuming the GOP and Congressional Donks don't work out a deal to their improved mutual satisfaction, heh), muni bonds are going to have a sad, and the 27+ weekers are fucked.

Hooray, we're fighting the deficit!

Zandar said...

As I said two days ago, nice deal, now what's plan B because plan A will never pass.

Lo and behold, here we are deep in the weeds now and little chance of a way out.

Zandar said...

Oh, and Nancy Pelosi just made it pretty goddamn clear where Plan B is coming from, and it's not 1600 Pennsylvania Avenue.

Lowkey said...

Well, here's to hoping the Donks have just been keeping Plan B close to the vest. LOL, perhaps we can triangulate a bit leftwards, this time?

SteveAR said...

It's all theater and huffing and puffing. I'd be surprised if they don't give Obama what he wants.

If Republicans were smart, which is questionable, they would use this opening by Democrats to submit an alternative package that leaves the high rate as is and lowers the income tax rate for everyone else.

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