Dems trying to make lemonade with approaching debate over tax increases

Democrats in Washington will argue that the debate coming in September over whether to extend the Bush tax cuts for all Americans – or whether to let them expire for families making more than $250,000 a year – is one they relish.

“I’ll let Congressman Boehner unwind his eloquent argument for preserving the tax cuts for those that are quite wealthy,” White House press secretary Robert Gibbs said Tuesday after House Minority Leader John Boehner, Ohio Republican, argued with President Obama over the issue during a meeting that included other congressional leaders at the White House.

The idea that Democrats put off the debate on the tax cuts, which all expire at the end of this year unless Congress acts, gained a foothold in long takeout pieces in the Washington Post and New York Times this past weekend.

But it’s more likely that Senate Majority Leader Harry Reid, Nevada Democrat, simply couldn’t get to the issue any earlier given an already busy and ambitious legislative schedule, and that the White House and Democratic leaders are now trying to frame the debate as one they are looking forward to.

“I’d be surprised if any top Democrat wanted to have this debate and intentionally scheduled it to come up right before November. Traditionally debates about raising taxes don’t tend to favor the Democrats,” said Sen. Evan Bayh, Indiana Democrat, in an interview.

Bayh noted that while allowing the tax cut for families making more than $250,000 a year “doesn’t affect most Americans … it still raises the subject people are sensitive about.”

Senate Majority Whip Dick Durbin, Illinois Democrat, didn’t answer the question directly when asked if leadership had planned all along to wait until right before the midterm elections to debate the tax cuts.

“We have to face it. We want to face it before the end of the year. And we don’t have much time,” Durbin said. “We’re just running out of time to do it before August.”

The cuts, which were passed in 2001 and 2003 as one of the major agenda items for former President George W. Bush, are set to expire on Dec. 31. If the cuts for all income tax brackets expire, tax rates would rise, from 35 to 39.6 percent, from 33 to 36 percent, from 28 to 31 percent, from 25 to 28 percent, and from 10 to 15 percent.

Obama is in favor of extending all but the cut for the top bracket. Treasury Secretary Tim Geithner began making the case publicly last week and on talk shows this past weekend for why cuts for the highest earners should expire.

“The President believes that, as, again, as you heard the Secretary of Treasury this weekend say quite clearly, that there are tax cuts that, based on our fiscal situation, simply can’t be afforded,” Gibbs said.

Gibbs said of the cuts for the highest tax bracket: “I don’t think there’s an economist that believes there’s a stimulus to, or a good reason in terms of economic growth to, extend those tax cuts.”