A Mexican Standoff On The Tax Cuts For The Rich Could Cause All The Bush Cuts To Expire

In the old West, when you had three bandidos confronting each other in anticipation of a gunfight, it typically resulted in nothing happening because each of those men knew that, if they drew first to kill one of the gunslingers, the other would kill them.  That failure to fight is commonly referred to as a Mexican Standoff.

In a strange way, a similar thing might just happen with regard to the expiration of the Bush tax cuts on January 1st.  Our three bandidos, in this case, are the House of Representatives, the U.S. Senate, and President Obama.  But, instead of thinking about who will draw first, in this scenario, we're talking about who will "cave first" on their particular stand on extending the Bush tax cuts for the rich.

The House of Representatives is majority controlled by Republicans and is in favor of either extending all the Bush tax cuts -- including those for the rich -- or, even making them permanent.  Over in the Senate, the Senate Majority Leader, Harry Reid, is all for Obama's push to extend the them for everyone but the rich.  In fact, following the reelection of Obama, Harry believes he now has a mandate from the people to raise taxes on the rich.  Further, Patty Murray, also part of the Democratic leadership in the Senate, has gone on record and threatened that, if the Republicans continue to push for keeping the tax cuts for the rich, her party is prepared to let them all expire; increasing heavy tax burdens on all Americans.  Then, too, the President -- a clear advocate for increasing the taxes on the rich -- says he will veto any bill that comes to his desk and doesn't include raising taxes on individuals making in excess of $200,000 and families with incomes above $250,000.

So, there's our standoff.

Unless the Republicans cave, it just might be possible that the Democrats of the Senate will allow all the Bush tax cuts to expire by not voting on any extension of any of the cuts; leaving Obama out of the "apparent" loop on this because there will be no bill for him to either veto or sign into law.  In fact, Obama might just secretly favor this inaction; thinking he could use it as a mid-term, 2014 election issue by blaming the Republicans for the increases.  At the same time, increasing all the tax rates would help him out of the deficit hole he's created.  Of course, raising taxes at this time would also send this country spiraling into recession.

I personally think that there are enough Democrats in the Senate who probably believe that raising taxes on the rich, during this weak economy, is a bad idea and they will force Obama, Murray, and Reid to accept a year's extension of the Bush tax cuts in their entirety.  But, we'll just have to see.

--- New York Times: Senator Murray Says Democrats Will Let Tax Cuts Expire: http://thecaucus.blogs.nytimes.com/2012/07/16/senator-murray-says-democrats-will-let-tax-cuts-expire/