Fiscal Cliff Hangers

Senate Dems are pressing their advantage on the Bush tax cuts this year, knowing that if there's no agreement, the cuts expire for everyone.  Republicans have always warned that the cuts need to be made permanent or else, and now it seems Harry Reid's boys are calling that bluff.

Senate Democrats — holding firm against extending tax cuts for the rich — are proposing a novel way to circumvent the Republican pledge not to vote for any tax increase: Allow all the tax cuts to expire Jan. 1, then vote on a tax cut for the middle class shortly thereafter.

The proposal illustrates the lengths lawmakers are going to in an effort to include new federal revenues in a fix for the “fiscal cliff,” the reckoning in January that would come when all Bush-era tax cuts expire and automatic spending cuts to military and domestic programs kick in. 

Virtually every Republican in Congress has taken the pledge, pushed by Grover Norquist’s Americans for Tax Reform, never to vote for a tax increase — a pledge both parties see as a serious impediment to a tax compromise. But if tax rates snap back to the levels of the Clinton presidency on Jan. 1, any legislation to reinstate some of those tax cuts — but not all of them — would be considered a tax cut. 

“Many Republicans are starting to realize something important: On Jan. 1, if we haven’t gotten to a deal, Grover Norquist and his pledge are no longer relevant to this conversation,” Senator Patty Murray, Democrat of Washington, said this week in a speech at the Brookings Institution. “We will have a new fiscal and political reality.” 

That's a dangerous game, potentially.  Certainly if the GOP keeps the House and wins the Senate, the resulting legislation would be everything they want:  permanent tax cuts that favor the wealthy.   This plan only works if the Democrats keep control of the Senate, and both sides know it.

It's good however that the Democrats are at least willing to go to the mat on this.  We're going to have to back them up.  Numbers are starting to get grim in a couple of Senate races, most notably in Missouri, Montana, Nebraska and Virginia.  Should Florida, Nevada and South Dakota go all pear-shaped too, things could get bad fast.

Those Senate races are in a lot of ways more important right now.  Obama's holding his own for President, we need to worry about the Senate.