My guess is that sometime next Summer or Fall the GOP will pull a stunt to extend the Bush Tax Cuts, probably as a rider to any further spending cuts that are proposed by the debt deal commission, but maybe through some other bill. It doesn’t really matter what mechanism they will employ. We know it is coming. Preserving those favorable tax cuts for the well off, the people who have felt the least pain (and received the most gain) during the past two years, and indeed, giving the wealthy and large corporations even more tax cuts, is their prime objective.
The cuts are due to expire on December 31, 2012, and therefore they will be a large campaign issue next year. You can already imagine the framing: the GOP candidate will promise to extend them based on the tried and true premise that letting them expire amounts to a monstrous tax hike that will kill jobs and make the Baby Jesus cry. The truth is that the expiration of the tax cuts will return the rates to the level they were during the Clinton administration, and we all remember what terrible things they did to the economy back then. After all, who needs $4 trillion towards deficit reduction?
The advantage of letting the tax cuts expire is that it does not require any action on the part of Congress; they will die unless they do something to extend them. And we all know how much this Congress has accomplished in actually passing any meaningful legislation.
There’s a meme going around in some places that President Obama’s cave-in on the extension of the Bush tax cuts last December and his concessions on the debt ceiling were all part of a carefully crafted Ninja move for the 2012 campaign. It goes something like this: he gave all of that away so that he can nail the GOP on the Bush tax cuts, and at some crucial point in the campaign — say, late October — it would suddenly dawn on the hapless GOP that they were suckered into it and, like Admiral Ackbar, they start screaming “It’s a trap!”
Not only is that a little too much The West Wing (and genre-mixing), but manipulating the nation’s economy for political gain is the Republicans’ schtick.