With a potentially bruising election less than six weeks away, Democrats on Capitol Hill came to an impasse Thursday over what to do about the Bush tax cuts. The result was a decision to do nothing, at least until after the elections, when Congress comes back to Washington for a lame duck session.
For weeks, Republicans have happily watched from the sidelines as liberal and moderate Democrats have struggled to agree on the best course of action, both politically and on policy grounds, with the Bush-era tax policy that Democrats describe as a "time bomb." All of the tax cuts -- including those on income, estates and dividends, as well as the child tax credit, the marriage penalty and the Alternative Minimum Tax -- will return to 2001 levels (as the legislation originally called for) unless Congress acts this year.
Greg Sergeant points out that the Democratic leadership is afraid that if the tax cuts expire on the top 2%, the Republicans will accuse them of “raising taxes”.