Democrats Threaten January 1 Tax Hike for All Americans
Senate Democrats appear willing to use your paycheck to play political hardball on taxes unless Republicans agree to President Obama's plan to raise taxes on America's top earners.
A top Senate Democrat warned Monday that, if Republicans don't relent, her caucus is willing to let all the Bush-era tax rates expire at the end of the year -- in effect threatening to let the country fall off what many in Washington call the "fiscal cliff."
That cliff is approaching at the start of 2013, when the Bush tax cuts are set to expire and billions of dollars in automatic spending cuts -- spawned by last summer's debt-ceiling debate -- are set to take effect. Lawmakers on both sides of the aisle are hoping to shift around those spending cuts to spare key areas like defense, and to temporarily extend the Bush tax rates for at least some Americans. Some have warned a failure to do so could send the nation back into recession.
But Sen. Patty Murray, D-Wash., indicated Democrats are willing to let the deadline pass in order to better their negotiating position.
"So if we can't get a good deal, a balanced deal that calls on the wealthy to pay their fair share, then I will absolutely continue this debate into 2013 rather than lock in a long-term deal this year that throws middle-class families under the bus," she said in an address Monday afternoon at the Brookings Institution. Murray is head of the Democratic Senatorial Campaign Committee, the campaign arm for Senate Democrats.
In the remarks, Murray explained that if all the tax cuts expire, then that will diminish the GOP argument that the Democratic plan is tantamount to a tax hike -- because come 2013, any change to the tax code would be a tax cut.
"We will have a new fiscal and political reality," Murray said. "If the Bush tax cuts expire, every proposal will be a tax cut proposal and the pledge (to not raise taxes) will no longer keep Republicans boxed in and unable to compromise.
"If middle-class families start seeing more money coming out of their paychecks next year -- are Republicans really going to stand up and fight for new tax cuts for the rich? Are they going to continue opposing the Democrats' middle-class tax cut once the slate has been wiped clean? I think they know that that would be an untenable political position. And I hope this pushes them to come to the table with real revenue now before being forced to the table if we don't get a deal before the New Year," she said.
Murray added that she hopes "it doesn't come to that," and that she's seen "encouraging signs" that Republicans are ready to deal.