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SENATE MODERATES: ROUND TWO.
This wasn't exactly unpredictable, but a group of Senate centrists are beginning to balk at Obama's budget. General grumblings over a big budget probably don't need to be taken seriously. The Senate is the Senate. It likes the quiet life, and gets cranky when asked to work on weekends. But Bayh and Nelson both voice specific complaints about the tax increases. “I have major concerns about trying to raise taxes in the midst of a downturn of the economy,” says Ben Nelson. Bayh agrees. "Before we raise revenue, we first should look to see if there are ways we can cut back on spending."
There are two issues here. The first is an empirical question about taxes. If the majority of Americans are facing a tax decrease, then are "taxes" going up? Revenues might be rising because the rich are paying more. But for most people, taxes are going down. I'd be interested to hear Nelson's answer.
The second is a question of tradeoffs: The tax increases in the budget pay for specific things, health care among them. So it becomes a fairly simple issue of tradeoffs. Does Ben Nelson think universal health care is more or less important than keeping itemized deductions for filers making $250,000 a year at 35 percent rather than 28 percent? Because that's the actual question at hand. No one is attempting to "raise taxes." They're attempting to "raise taxes in order to pay for things." The relevant question, then, is not whether Nelson opposes raising taxes, but whether he opposes raising taxes more or less than he opposes not having the thing the new revenues would pay for.
COMMENTS (12)
Of course Bayh is also wrong on the economics. Cutting spending and cutting taxes is worse for the economy than raising spending and raising taxes.
Posted by: Rob | March 4, 2009 1:42 PM
Isn't he actually asking "in order to pay for these new things, can we look at not paying for other things we don't actually want? If we don't find anything, then let's look at raising taxes."
This is fairly in line with much of Obama's rhetoric on "programs that don't work".
Posted by: Tito | March 4, 2009 1:47 PM
Can we stop calling them "Senate moderates"? That gives them too much cover. Which side are they on?
How about "Senate plutocrats"?
Posted by: chrismealy | March 4, 2009 1:49 PM
tito, i wish he was saying such a thing, but in fact, what he's saying is "i'm scared that someone is going to brand me a big-spending liberal."
Posted by: howard | March 4, 2009 2:04 PM
What Howard said. Everybody needs to become a lot more cynical. Nelson and Bayh, like nearly all elected officials in nearly all legislatures, care first and foremost about job security. I'm not saying it's their sole concern. Just their biggest one. And it prompts many a lawmaker to say deliberately stupid or misleading things, and cast deliberately harmful votes.
Posted by: Jasper | March 4, 2009 2:11 PM
"Cutting spending and cutting taxes is worse for the economy than raising spending and raising taxes."
Really? Can you point me to an economist that thinks this? Even the most ardent Keynesian wouldn't argue that. Keynesian theory argues that government spending can be used to balance things out in a counter-cyclical fashion, and that some things are more efficiently handled by the government for various reasons, but not something as crass as that statement. If this were true, why not just have the government tax everything and decide where the resources go?
I'm constantly amazed at how I end up being "conservative" on liberal blogs. I think Obama's stated position on this, "eliminating programs that don't work", isn't bad.
Posted by: Tito | March 4, 2009 2:12 PM
These status quo ante Democrats seem to have forgotten (expediently?) that the tax hikes on the wealthy are no more than letting Bush's tax cuts expire in the year they're supposed to expire. That's 2010, a year away by my calendar. Hopefully the worst of the recession is over by then.
Posted by: Linkmeister | March 4, 2009 2:19 PM
It's easy to dismiss these concerns but Obama needs to take them as seriously as the GOP opposition.
These Dems give the GOP cover and we do not need a repeat of the White Houses mishandling of the Stimulus Bill.
Nelson, Bayh, McCaskill, who every needs and deserves a forceful, if polite response.
Posted by: Don | March 4, 2009 2:21 PM
Revenue from income taxes is not rising. Even Obama's tax plan during the campaign was a net tax decrease, and that was with the Bush tax cuts expiring early!
Posted by: anonymous | March 4, 2009 5:17 PM
Well, the problematic part of the argument is it sounds like Nelson is saying we should not raise taxes in a recession. This is sound enough except that Nelson/Bayh offer as an alternative cutting spending, which is equally bad in a recession. So their argument makes no sense in a "this is not the time" frame.
Of course, shifting the burden of taxes up the income scale is very much called for in a recession, and even tax increases on the whole would be acceptable if they are matched with spending (i.e. one isn't using it to fight the deficit during the recession).
Posted by: Bondo | March 4, 2009 6:18 PM
Tito..
Who would believe that? Christine Romer. The balanced budget multiplier isn't 1, but it is positive and that's where Romer's 0.8 value comes from. But since you are talking out of your ass you are playing the role of conservative nicely.
Posted by: Rob | March 4, 2009 6:51 PM
If the majority of Americans are facing a tax decrease...
Handing out checks in the form of refundable credits is hardly a 'tax decrease'. It would be more accurately characterized as a federal welfare increas.
Posted by: El Viajero | March 5, 2009 8:08 AM