Dems to Extend Bush’s Middle Class Tax Cuts

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Just when you thought Congress was spent — literally — and done for the year they’ll turn around and surprise you. No money left to do anything? United Republican opposition? Democrats are planning to take on the great white whale of spending: extending President Bush’s middle class tax cuts. The cost is estimated from $1.6 trillion to extend them to as much as $2.7 trillion to make them permanent. According to Senate Democratic sources, the latter is what they’re going to go for — and they’re planning to do it before the midterm elections.

As I write in a story this morning, Dems are hoping to box the GOP in with this move. Republicans have balked at renewing Bush’s tax cuts unless those for the wealthiest are included. The questions are: will Republicans protest at a) such huge amounts of deficit spending, and/or b) extending the middle class cuts without those for the top two tiers?

Republicans argue that letting the top cuts lapse will hurt small businesses — the engine of job growth — at exactly the wrong time. Dems argue back that very few small businesses make more than $200,000 a year. But having this fight is exactly what Democrats want as they try to paint Republicans as defending the rich at the expense of the little guy ahead of the elections and, having been stymied in passing additional stimulus all year, Dems believe that the move is necessary to prevent a double dip recession.