Wealthy GOP senators will shut down government to secure their tax breaks

Pres. Obama met with Republican and Democratic leaders Tuesday and it seemed to go well. “We had a very nice meeting today,” said GOP House leader John Boehner. “The question is, can we find the common ground the American people expect us to find?” Republican Senators Wednesday, however, signaled they weren’t interested in common ground, at least not when it comes to securing tax cuts for the wealthiest Americans, a tax bracket that includes almost all (or all) of the Republican senators.

In a letter signed by all 42 current GOP members of the Senate and delivered to Majority Leader Harry Reid, the Republicans said they “cannot agree to prioritize any matters above the critical issues of funding the government and preventing a job-killing tax hike” by which they mean tax hikes for Americans making more than $250,000 per year.

In other words, in the long debate over the Bush tax cuts– where economists have said the cuts for the wealthy have mostly been banked by the wealthy, which is good for them, but for that reason have not generated jobs by any significant measure, even while expanding the budget deficit, and where Democrats have proposed granting the tax breaks to all the rest of Americans– Republican lawmakers have not compromised. They have found no common ground on which to stand.

As the Washington Independent reported months ago, some lawmakers have also proposed simply raising the ceiling and providing tax cuts for all Americans except millionaires. Today’s letter from the Republicans would seem to rule out that compromise, too.

Here’s how Obama adviser David Axelrod talked about the debate on the News Hour after the White House meeting Tuesday:

JUDY WOODRUFF: You were in the meeting today. Did it accomplish the goal the president had set out?

DAVID AXELROD: Oh, I think it really did. You know, we have had an election. I think the American people want us to work together to try and solve some of the big challenges facing this country. And this was an opportunity to sit down and — and — and talk things through.


JUDY WOODRUFF: You said it was positive, constructive. But we gather no real differences were bridged today. The president wasn’t looking for that?

DAVID AXELROD: Well, I think that there was — I think there was a significant discussion outlining a way forward to solve some of the things that are in front of us right now.

As the president mentioned, and you know, he’s designated his treasury secretary, Tim Geithner, and Jack Lew, the new budget director, to sit down with designees, members from the two chambers, to work through potential solutions on this tax issue. That would be very important for the economy, very important for every middle-class person in this country, who will see their taxes go up by thousands of dollars if we can’t resolve this before January 1…

JUDY WOODRUFF: Well, we’re, all of us in the media, in fact, the whole country, I guess, is interested in knowing where these gaps are going to be bridged, because the Republicans most recently have said they think that the president ought to be doing the compromising.

So, if that’s their view, where do you see the give?

DAVID AXELROD: Well, look, I think people say things and they — you know, and they posture. That’s the nature of politics. That’s sometimes the requirement of politics.

But I think the fundamental requirement that people have for Republicans and Democrats in Washington right now is to find a way forward, not to compromise their principles, because they have theirs; we have ours. But, at the end of the day, we need to move forward on some of these things particularly things that are — affect our economy.

We have a recovery. It needs to accelerate. A lot of people are still feeling the effects of this recession. There are things we can do to help accelerate that recovery, and we ought — we ought to do them.

JUDY WOODRUFF: On the tax cuts question, David Axelrod, we know the president would prefer that they not be extended for the wealthy. But, if the Republicans insist on that, is he prepared to go along with it?

DAVID AXELROD: Well, look, the president’s position is very clear. He thinks there ought to be a permanent tax cut for the — for the middle class. The middle class has had a — not just a difficult time in this recession, but it’s been battered through the last decade, where incomes have actually declined, while incomes at the top have actually — have grown exponentially.

So, that makes sense. What he’s also said is that we can’t afford a permanent tax cut for the wealthy. It would cost $700 billion that we don’t have in the next 10 years alone. We don’t want to borrow that money and add to our debt to do it. And those are the parameters he’s set. And we’re — Mr. Geithner and Mr. Lew are going to sit down with their representatives and see where we can go from there.

JUDY WOODRUFF: But it sounds like you’re saying — you’re basically saying what the president has said before. Is there give is what I’m asking.

DAVID AXELROD: Not on those issues. I mean, we obviously — we want a tax cut for the middle class. We have to have that. The middle class can’t go into January 1 without — without that tax cut. And we can’t accept a permanent tax cut for the wealthy, at a cost of $700 billion we don’t have.

But, you know, what I’m not going to do, Judy, is on this program do the job that those other gentlemen were tasked to do and have the authority to do. It’s good to have a conversation with you, but neither you or I — or — nor I are empowered to resolve this. And we will see what they come up with.

JUDY WOODRUFF: We will see.

The signs Wednesday aren’t good. The Senate Tuesday night failed to extend unemployment insurance for millions of jobless Americans, a serious blow to the unemployed and, economists say, to the recovery, where millions in regular spending and consuming will simply fall away over the next half year unlikely to be made up in any sudden appearance of job openings.

Lawmakers also must act to keep the government funded before the 112th Congress meets in January. The nation’s Republican senators are clearly not seeking common ground. They’re playing a game of chicken, banking on the Democrats granting them their wealthy-American tax cut before letting the government shut down.

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