A controversial new ad campaign is hitting the airwaves to pressure President Barack Obama into rejecting any compromise with Republicans that would extend all Bush-era tax cuts in time to prevent a massive tax hike from taking effect automatically at year’s end.
On Thursday, the lame-duck House voted to allow the expiration of tax breaks for household income above $250,000. But even Democrats admit that the bill, widely viewed as a bid to win favor with the Democratic base, is dead on arrival in the Senate, where all 42 GOP senators have said they oppose it.
But that vote, combined with the ad campaign launched by left-wing heavyweights MoveOn.org and the Progressive Change Campaign Committee, could rouse the Democratic base and complicate the administration’s effort to reach a compromise with Republicans.
Obama has directed a White House team to negotiate with Republicans on the tax-break extensions. Until Thursday, the consensus among D.C. insiders was that with Obama’s support, moderate Democrats and Republicans would be able to strike a last-minute bargain to extend the tax breaks.
But now some analysts are no longer so sure a deal will get done during the lame-duck Congress.
“Gosh, you know, it’s hard for me to predict at this point,” Wall Street Journal editorial board member and economic analyst Steven Moore told Newsmax on Thursday. “I honestly don’t know at this stage, and I don’t think anybody knows.
“That’s the thing that’s so crazy about this,” Moore said. “Nobody knows how this is all going to turn out.”
Moore told Newsmax that, in his 27 years of covering Capitol Hill, he’s never seen “such irresponsible behavior” as allowing a massive tax increase that could endanger a fragile economic recovery, he says.
The progressive groups are stoking the fire, kicking off ad campaigns to pressure Democrats to let the high-end tax breaks expire no matter what.
One ad by the Progressive Change Campaign Committee, which will air on CNN, MSNBC, and “The Daily Show” with Jon Stewart, opens with video of then-candidate Obama promising to let the Bush tax cuts expire for wealthier Americans. The ad ends with the statement: “Tell President Obama to keep your promise. Fight, don’t cave, on tax cuts.”
Progressive Change co-founder Stephanie Taylor told The Washington Post: "President Obama made a clear promise during the 2008 election, and our ad reminds him that he has a choice. He can keep his promise and make sure that the wealthiest Americans pay their fair share of taxes. Or he can break his promise, add billions to our national debt, and leave his past supporters demoralized by caving to Republicans even when they are clearly wrong.
“The choice is his," she said.
Those sentiments reflect the pressure Obama and his fellow Democrats will be under as they try to find a way to work out a compromise with Republicans.
MoveOn.org has a new ad hitting the airwaves as well. The ad is a montage of video clips from rank-and-file Democrats praising Obama, while also urging him to return to the principles the ad implies he has strayed away from.
“We want you back, and need you back,” one voter pleads.
Another asks: “What’s happened to that bold, progressive man we elected president in 2008?”
Of course, it is an open question how much impact the ads will ultimately have. According to conservatives, the ongoing uncertainty over 2011 tax rates could hurt the economic recovery.
The incoming, tea party-oriented Congress probably would reinstate the tax cuts. But the higher tax withholding probably would extend for several weeks, and for possibly months, into the new year before the cuts could be officially reinstated.
“That’s a bad way for the economy — and the president — to start the year,” GOP strategist and Fox News commentator Karl Rove wrote Thursday in a Wall Street Journal Op-Ed.
The latest compromise the White House floated would involve an extension of tax credits included in the Obama stimulus bill, in return for an extension of the Bush-era tax cuts as well.
Sen.-elect Rand Paul, in what probably reflects the view of many grass-roots conservatives, told Fox News on Thursday he would support that arrangement.
“I’m for extending all the tax cuts,” Paul said. “I’m not for rescinding any tax cuts, no matter who originated them.”
It remains to be seen, however, whether those who control the lame-duck Congress will allow any deal that would keep the lower tax rate for wealthier Americans.
Pollster and Fox News contributor Frank Luntz remarked that voters are alarmed by a political establishment that seems oblivious to the historic anti-incumbent landslide that occurred on Nov. 2.
“You raise taxes on anyone in this economic cycle and you are killing jobs,” he said. “And the American people are smart enough and sophisticated enough to know this.
“They’re frightened by what’s going on in Washington,” Luntz said. “And Washington had better pay attention to that fear.”
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