ATM fixed, PAYGO discarded
There was broad agreement in Congress that lawmakers should approve a patch to stem the AMT's reach for another year. But agreeing on how to do that put House Democrats and Senate Republicans at loggerheads.
Under their pay-as-you-go philosophy, House Democrats had insisted on raising revenue to offset the $50 billion in tax relief resulting from the one-year fix. Much of the revenue would have come from closing a loophole on offshore tax havens and increasing the tax rate on income earned by hedge fund managers and venture capitalists.
But Senate Republicans blocked the Senate from taking up legislation that included tax increases, and President Bush threatened to veto any bill that raised taxes.
Just put it on the credit card. What a principled stand those Republicans made.
The Dems share blame, too, for misplacing their spine -- and after getting my hopes up, too. Alternatively, they could have sought a compromise that included a mix of spending cuts and tax increases, putting pressure on Bush and the GOP for looking unreasonable by insisting on $50 billion in tax cuts after years of tax cuts and yawning deficits, and in the face of Democratic compromise offers.
Instead, we got the worst of all worlds. Either spending cuts or a tax hike would have been more responsible than the credit-card solution.
AMT, politics, midtopia