In an editorial today, The Wall Street Journal editors takes a top Senate Democrat to task for a speech staking out a position that would sink tax reform efforts. They write, “The polls say voters want more bipartisanship, and one possibility in 2013 is tax reform that trades lower rates for fewer loopholes. Well, so much for that. The man who wants to be the next leader of the Senate Democrats has declared that this ‘old-style of tax reform is obsolete.’ The antireformer is Chuck Schumer, the Senator from Wall Street, er, New York, who averred at the National Press Club last week that his party will have nothing to do with tax reform of the kind that Ronald Reagan negotiated with Democrats in 1986, or that the Simpson-Bowles deficit commission proposed in 2010, or that the Gang of Six Senators have been working on. It’s Chuck’s way or no way. . . . Mr. Schumer says the only way to reform is to broaden the tax base and raise tax rates. If you’re wondering how this differs from a plain vanilla tax increase, good question.”
Democrats’ insistence on raising taxes, illustrated by Schumer’s speech, threatens the ability to avert the fiscal cliff the country faces at the end of the year. As The New York Times put it last week, “Mr. Schumer’s position complicates efforts to seal a deal before January, when the ‘fiscal cliff’ of tax increases and automatic spending cuts goes into effect.” Politico agreed: “If embraced by other Democrats, Schumer’s approach would represent a hardening of the party’s position on taxes and could complicate the prospects for a bipartisan deal before year’s end to avoid the expiration of the Bush-era tax cuts and the start of automatic budget cuts.”
Senate Democrats are so wedded to tax increases, Schumer is the second member of Democrat leadership to suggest that tax hikes are so important, they’re willing to hold the economy hostage over their demands. Recall that over the summer, Sen. Patty Murray (D-WA) suggested Democrats were “willing to risk racing over the fiscal cliff and into financial chaos in 2013,” as AFP put it, in order to get tax increases.
The WSJ editors note that Schumer “says that all revenue from any tax loophole closing must go to ‘reduce the deficit, which is strangling our economic growth.’ That’s a good one coming from a Senator who has never met a spending increase he didn’t like and who has led the fight against spending cuts offered by House Republicans in the last two years.”
They conclude, “Mr. Schumer’s speech is best understood as a political marker no matter who wins re-election. If Mitt Romney wins, Mr. Schumer will browbeat any Democrat who even thinks about supporting a Simpson-Bowles-Reagan-style reform. If President Obama wins, the Senator will fight the kind of tax deal that House Speaker John Boehner has said he wants as part of a grand budget compromise. Who’s the real partisan obstructionist?”
As Senate Republican Leader Mitch McConnell said last week, “Sen. Schumer is now the second member of the Senate Democrat leadership to endorse ‘Thelma and Louise economics.’ Senior Democrats are now openly acknowledging their plan to hold the economy hostage to massive, job-killing tax hikes, and espousing the fiscally irresponsible view that says the country should be driven off the fiscal cliff rather than Congress working toward bipartisan solutions to reform and strengthen entitlements without killing jobs.”