Democrats Gambling Tax Cuts Will Be Popular in 2012

Democrats are gamblers. And as it happens, they are bad ones. In gambling parlance they would be called the “fish.” They make bad bets, lose their money, but always come back for more.

It happened with the stimulus. They passed historic levels of new spending, betting that it would help the economy recover to the point voters would be willing to overlook the ridiculous pricetag.

It happened with Obamacare. With Americans having expressed their concern over the size and cost of government, Democrats gambled that once the bill was passed, voters would be so enamored with the benefits that they would ignore its more unseemly elements.

Despite this dismal record, Democrats bought some more chips and are back at the poker table. Their latest bet? Tax cuts. Austan Goolsbee, the chairman of the White House Council of Economic Advisers, said Sunday on “Meet the Press” that, “In 2012, I believe they will have to stand up and defend, on their own merits, that they think that these high-income tax cuts work.”

In essence they are gambling that Republicans will face a much more difficult time defending tax cuts when the economy is back on its feet. They’re betting that voters will no longer be willing to buy the Republican notion that raising taxes on anyone would slow the recovery, since presumably the economy will have recovered.

Interestingly, they already made this very same bet. As the Washington Post wrote in July,

President Obama and Democratic leaders in Congress are setting the stage for a high-stakes battle over taxes in the final weeks before the November congressional elections, betting that their plan to eliminate tax breaks for the wealthy will resonate with voters who have lost houses and jobs to what many see as an era of Wall Street greed.

This past summer Democrats thought that the looming debate over taxes would create the perfect opportunity to paint Republicans as the party of the wealthy. It didn’t work like that. Republicans wanted all the tax cuts extended. They didn’t parse by economic class. Taxes needed to remain low…for everyone.

It was a message that obviously resonated. President Obama eschewed negotiations with his own party, instead choosing to sit down with Republican leaders to hammer out a compromise. A deal was ultimately reached, and despite some initial “rage and frustration,” Democrats appear ready to sign on to the agreement.

They lost their initial gamble, but now say that they are going to double-down on the same bet in an election year? Doesn’t seem like good politics to me. Mainly because it rests on a poor premise.

Democrats’ bet relies on a substantial improvement of the economy. They believe that this will undercut the argument that Republicans offered this year – that raising taxes will harm the recovery. But, if the economy recovers enough to undermine this line of though, doesn’t it simply prove Republicans’ point that tax cuts bolster the economy? Would Republicans actually be in a stronger position?

After all, would Democrats be prepared to stand up in an election year and argue that we must eliminate the very tax cuts that spurred our recovery?

Perhaps. History shows they’re bad gamblers.

by Brandon Greife, Political Director of the College Republican National Committee