Posted on July 13 2012 – 8:30 AM – Posted by: Doug Brady
President Obama has staked his re-election on the promise to raise taxes on anyone making more than $200,000 a year, but it’s going to be fascinating to see if he can hold other Democrats through Election Day. June marked the third month in a row of lousy job creation, and the economy is growing slowly even as the January 2013 tax cliff grows closer by the day.
Already, as many as six Democratic Senators are hedging their bets as the economy looks worse. That list includes Joe Manchin of West Virginia, Jon Tester of Montana, Claire McCaskill of Missouri, Bill Nelson of Florida, Ben Nelson of Nebraska and Jim Webb of Virginia. The first four are running for re-election this year, while the last two are leaving the Senate. They haven’t all declared outright support for postponing the tax hikes, but they have expressed a willingness to negotiate a deal with Republicans that would avoid raising taxes on anyone next year.
Mr. Webb, for example, says he doesn’t want to raise income tax brackets on “ordinary income” but he favors raising capital-gains taxes. Senator Nelson from Nebraska told the Hill newspaper that “my druthers is to extend the tax cuts for everyone,” but he wouldn’t mind raising the tax on millionaires “if it has to come to that.” It doesn’t have to come to that if Democrats don’t want it to.
A spokesman for Senator McCaskill confirmed that she’s also willing “to compromise” on a temporary extension of the current tax rates. Florida’s Senator Nelson didn’t return our calls but has been reported in the press as open to an extension.
Messrs. Tester and Manchin both say that, rather than raising taxes in 2013, they favor an overhaul of the tax system along the lines of the Simpson-Bowles plan, which would lower tax rates while closing loopholes. That sounds close to the position of many Republicans—and akin to the offer that Pennsylvania Senator Pat Toomey made as part of last year’s Super Committee budget negotiations. Mr. Obama turned it down.