- For a few weeks around New Year’s Day, Washington turned topsy-turvy. Well, topsy-turvier than usual. #fiscalcliff
- There are features of the conservative movement that will limit its political effectiveness even after the cliff debate.
- Too many Republicans wanted us to take the fiscal cliff plunge writes @RameshPonnuru
For a few weeks around New Year’s Day, Washington, D.C., turned topsy-turvy. Well, topsy-turvier than usual. Conservative groups blasted a huge tax increase, the Congressional Budget Office estimated the size of a large tax cut, and they were all talking about the same bill. The Club for Growth’s president said he would hold congressmen’s votes for the bill against them — including the vote of a former president of the Club who is now a senator. Congressional Republicans refused to vote for spending cuts they favor. Some of this oddity was the result of the peculiar circumstances that gave rise to the month’s political debate, circumstances that will not soon be repeated. Some of it resulted from features of the contemporary conservative movement that will continue to limit its political effectiveness even after that debate has run its course.
In 2001 and 2003, President Bush, most congressional Republicans, and a few Democrats cut almost all income-tax rates, cut taxes on capital gains, dividends, and estates, and expanded the child tax credit. To get the tax cuts through Congress, Bush had to choose between shrinking their size and making them expire at the end of 2010. He chose the latter course, subsequently trying to make the tax cuts permanent or at least push back the expiration date. After taking the House in 2010, Republicans succeeded in getting President Obama to agree to push the date to the end of 2012.
Obama’s position was that the tax cuts on everyone making less than $250,000 a year should be made permanent, while the tax cuts on incomes above this level should expire. He also wanted taxes on estates, capital gains, and dividends to go partway back to their pre-Bush levels. It was estimated that these tax increases would increase federal revenue by $800 billion over ten years.
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