There are interesting, challenging, and portentous political economy issues in play right now, and unless you’re taking a well-deserved post-election vacation from such matters, they’re worth your attention.
For example, there’s the question of whether the upper-income Bush tax cuts will finally sunset. This was a clear platform of the president’s campaign… in fact, it may have been the policy point he hit the hardest and most consistently. And significant shares of voters agree (about half support the upper-income expirations, and even more recognize the need for more revenue).
Republicans and their proxies, however, argue that the fact that they held the House was America’s way of saying they don’t want to see any tax increases. This is wrong, based on not just the above poll results but many other polls that preceded the vote, not to mention the fact that Tuesday’s results decidedly favored Democrats. But it’s predictable. The Republicans, virtually all of whom have pledged away tax policy to Grover Norquist, would make this argument no matter what the outcome was.
It’s also — and this is important — the case that the expiration of the upper-income cuts wouldn’t hurt the economy, a very common and consistent result across economic analyses.
Earlier we had a good conversation over at MSNBC with Martin Bashir on these matters. Like I say at the end of the segment, I keep running into this Republicans argument: “Ok, you won… now here are our demands.”
That’s some serious chutzpah. Of course, I understand and support the need for compromise. As the president emphasized in his victory speech, if we can work together we can solve this thing. But remember, we’ve already cut $1.5 trillion in spending over the next decade. Majorities rejected the Romney/Ryan/Norquist position, recognizing that a) there’s an important role for an amply funded federal government, and b) we can’t get there on spending cuts alone.
Sure, we’re a closely divided country. But the more I pore through election results, the more I think there’s a lot of people out there who understand the economic dynamics and needs of the country a lot better than House Republicans. So stick to your plan, Mr. President, and let’s see what unfolds.
Jared Bernstein joined the Center on Budget and Policy Priorities in May of 2011 as a senior fellow. From 2009 to 2011, Bernstein was the chief economist and economic adviser to Vice President Joe Biden, executive director of the White House Task Force on the Middle Class, and a member of President Obama’s economic team. Befpre joining the Obama administration, Bernstein was a senior economist and the director of the Living Standards Program at the Economic Policy Institute in Washington, D.C. Between 1995 and 1996, he held the post of deputy chief economist at the U.S. Department of Labor.
This post originally appeared at Jared Bernstein’s On The Economy blog.