The 2012 Presidential campaign is heating up, as are the politics which accompany it. It seems the Democrats want to win the battle of hearts and minds by framing this election in class warfare terms: defending the poor and middle classes against the Republican-favored rich. The Republicans, on the other hand, are in a tricky situation. In 2010 and 2011, they waged a spirited campaign against government spending, and appeared to move President Obama to the right, ruffling the feathers of many on the far left as Obama offered concession after concession. The President, reflecting his weak position at the time, even offered Speaker of the House John Boehner a deal this summer that included $3 dollars in spending cuts for every $1 in increased revenues (i.e. taxes). Ultimately, though, the Republicans may have fumbled at the goal line. The Tea Party caucus held out against ANY tax increase, Grover Norquist raised hell, and the deal fell through. Obama at that point learned he couldn't get a deal even by giving away the Democratic party's farm.
With nothing to lose, Obama has gone on the attack, emboldened with a strategy that just may extend his presidency despite conditions which predict he should lose handily (slow growth, high unemployment). The Republicans have their hands tied in allegiance to Norquist's no-tax pledge, and Obama has seized an opening by publicly framing the argument as rich versus poor. The current activity in Congress serves to illustrate: Several extensions are being taken up by Congress before the holiday recess. One involves extending the payroll tax holiday, another involves extending unemployment insurance. Allowing the payroll tax holiday to expire would primarily hit the middle class hardest, and those needing the unemployment insurance extension are, at the moment, closer to poor. Neither party can afford to be seen as neglecting the middle class or the poor, so there is broad support for both policies (though the support from republicans is grudging). The difference comes from how to pay for it. Obama has proposed a millionaire surtax to offset the costs, while Republicans look to cut government programs and freeze federal wages to finance the extension.
Rather than abandon the wealthy, Republicans hope instead to ride the wave of dissent against big government, as expressed by the Tea Party movement in 2010, but they may be counting on a wave that has flattened. Polling data consistently shows the public favors hitting up the rich to "pay their fair share". This year's Occupy Wall Street (OWS) movement introduced a discussion about income inequality, and volumes of data-sets have emerged which point out how well the uber-rich have fared recently, especially relative to the rest of us. Though the public didn't love the tactics or the image of the Occupy Wall Street crowd, they were sympathetic to the message, and it appears the President hopes to capitalize on this in the year ahead.
The policy battles set for 2012 will include the looming expiration of the Bush-era tax cuts, whose gains went disproportionately to the rich, and the continuing efforts to close corporate tax loopholes, such as those that allowed GE to pay no income tax despite clearing over $5 billion in U.S. profits. President Obama and the Democrats are seeking to extend the Bush tax cuts for everyone except those making over $250,000, whose taxes would rise from the current 36% rate back up to 39%, where it was during the Clinton years. Republicans will fight against the increase, calling it class warfare against the job creators. This at a time when corporations are experiencing record profits, holding more cash-on-hand than they've ever held before. Many naturally find this an odd homage to trickle-down economics, particularly when there's little evidence that these job creators are doing anything lately to earn that moniker. On the face of it, it seems an argument that Obama and the Democrats can win.
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