US Senate does something unbelievable: passes a bill

Taxmaggedon's not averted, but the competition is on fair ground

The United States got a little more likely to avoid Taxmaggedon yesterday, as the Senate voted narrowly to pass the Democrats' bill extending "middle-class" tax cuts 51-48.

On December 31st, 2012, the tax cuts passed by George Bush will all expire at once, along with a number of other tax cuts and spending provisions. If this isn't averted, the resulting economic shock – dubbed a "fiscal cliff" by Fed chairman Ben Bernanke, and Taxmaggedon by others – has been predicted to knock 4 per cent from US growth in 2013.

The strange thing about the situation, though, is that both parties want to avert it. Unfortunately, their chosen outcomes are different enough that each would rather let the nation burn and blame it on the other than pass something they don't agree with.

The desired outcome for Republicans is keeping all the tax cuts except for two – Obama's payroll tax cut, and the tax cuts implemented in the 2009 stimlus package. Not coincedentally, these are two of the cuts which affect low-income people most, and as a result, the party isn't hugely eager to mention that they are in favour of repealing them with the "Tax Hike Prevention Act of 2013" (which will directly implement tax hikes. America).

The Democrats, however, want to keep those low-income tax cuts, and also all of the Bush tax cuts up to $250,000 per year. Despite the fact that only 2 per cent of the country earns above that, they have come to be called the "middle-class" tax cuts. In return, they want to soak the rich a bit more, reverting marginal tax rates above that level to where they were in the Clinton era, and implementing the so-called "Buffet rule" to prevent brazen tax avoidance.

It is clear, however, that there are a large number of tax hikes which both parties want to avoid. So why the reticence? Because after the election – indeed, after Taxmaggedon actually takes effect – it will be a lot easier to get bipartisan support. Right now, the Democratic position involves tricking or cajoling Repbulicans into voting for tax hikes, even if only on the rich. But coming to that same position in 2013 will involve voting for tax cuts, since the hikes they want will happen automatically. That vote is a far more palatable prospect.

So while the Democrat-controlled Senate passed the their preferred bill, the Republican House of Representatives in gearing up to reject it out of hand. It will not make it to the President's table in this form, and nothing is likely to until at least November. 

But there is, buried in this, a small bit of good news. Because the Senate did something rather unusual: they had a vote which was won by the side with the most people on it. Normally, the arcane standing orders of the Senate require a supermajority, of at least 60, to win any vote - otherwise it can be filibustered indefinitely, preventing any other business from occurring. The fact that this was passed by a simple majority could mean a simmering of tensions on the matter, or an eagerness (however slight) to work together. Or it could be that they knew it wouldn't pass the House and weren't in a mood to fight.

Time, as ever, will tell.

Senate majority leader Harry Reid, the Democrats' man in the Senate. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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What Donald Trump could learn from Ronald Reagan

Reagan’s candidacy was built on more than his celebrity. Trump not only lacks experience as an elected official, he isn’t part of any organised political movement.

“No one remembers who came in second.” That wisdom, frequently dispensed by the US presidential candidate Donald Trump, came back to haunt him this week. Trump’s loss in the Iowa Republican caucuses to the Texas senator Ted Cruz, barely beating Senator Marco Rubio of Florida for second place, was the first crack in a campaign that has defied all expectations.

It has been a campaign built on Trump’s celebrity. Over the past eight months, his broad name recognition, larger-than-life personality and media savvy have produced a theatrical candidacy that has transfixed even those he repels. The question now is whether that celebrity will be enough – whether a man so obsessed with being “Number One” can bounce back from defeat.

Iowa isn’t everything, after all. It didn’t back the eventual Republican nominee in 2008 or 2012. Nor, for that matter, in 1980, when another “celebrity” candidate was in the mix. That was the year Iowa picked George H W Bush over Ronald Reagan – the former actor whom seasoned journalists dismissed as much for his right-wing views as for his “B-movie” repertoire. But Reagan regrouped, romped to victory in the New Hampshire primary and rode a wave of popular support all the way to the White House.

Trump might hope to replicate that success and has made a point of pushing the Reagan analogy more generally. Yet it is a comparison that exposes Trump’s weaknesses and his strengths.

Both men were once Democrats who came later in life to the Republican Party, projecting toughness, certainty and unabashed patriotism. Trump has even adopted Reagan’s 1980 campaign promise to “make America great again”. Like Reagan, he has shown he can appeal to evangelicals despite question marks over his religious conviction and divorces. In his ability to deflect criticism, too, Trump has shown himself as adept as Reagan – if by defiance rather than by charm – and redefined what it means to be “Teflon” in the age of Twitter.

That defiance, however, points to a huge difference in tone between Reagan’s candidacy and Trump’s. Reagan’s vision was a positive, optimistic one, even as he castigated “big government” and the perceived decline of US power. Reagan’s America was meant to be “a city upon a hill” offering a shining example of liberty to the world – in rhetoric at least. Trump’s vision is of an America closed off from the world. His rhetoric invokes fear as often as it does freedom.

On a personal level, Reagan avoided the vituperative attacks that have been the hallmark of Trump’s campaign, even as he took on the then“establishment” of the Republican Party – a moderate, urban, east coast elite. In his first run for the nomination, in 1976, Reagan even challenged an incumbent Republican president, Gerald Ford, and came close to defeating him. But he mounted the challenge on policy grounds, advocating the so-called “Eleventh Commandment”: “Thou shalt not speak ill of any fellow Republican.” Trump, as the TV debates between the Republican presidential candidates made clear, does not subscribe to the same precept.

More importantly, Reagan in 1976 and 1980 was the leader of a resurgent conservative movement, with deep wells of political experience. He had been president of the Screen Actors Guild in the late 1940s, waging a campaign to root out communist infiltrators. He had gone on to work for General Electric in the 1950s as a TV pitchman and after-dinner speaker, honing a business message that resonated beyond the “rubber chicken circuit”.

In 1964 he grabbed headlines with a televised speech on behalf of the Republican presidential candidate, Barry Goldwater – a bright spot in Goldwater’s otherwise ignominious campaign. Two years later he was elected governor of California – serving for eight years as chief executive of the nation’s most populous state. He built a conservative record on welfare reform, law and order, and business regulation that he pushed on to the federal agenda when he ran for president.

All this is to say that Reagan’s candidacy was built on more than his celebrity. By contrast, Trump not only lacks experience as an elected official, he isn’t part of any organised political movement – which enhanced his “outsider” status, perhaps, but not his ground game. So far, he has run on opportunism, tapping in to popular frustration, channelled through a media megaphone.

In Iowa, this wasn’t enough. To win the nomination he will have to do much more to build his organisation. He will be hoping that in the primaries to come, voters do remember who came in second. 

This article first appeared in the 05 February 2015 issue of the New Statesman, Putin's war