The Hill just released a set of polls in which voters in 10 battleground districts were asked if they support the extension of the Bush tax cuts. When asked if they favored or opposed the "extension of the Bush tax cuts," responses broke along party lines, with an overwhelming majority of Republicans in favor, a somewhat smaller majority of independents in favor, and a large majority of Democrats opposed.
However, when asked if they would favor extending tax cuts only for families earning less than $250,000 a year, the response was almost exactly the same among all three groups--two-thirds of Democrats, two-thirds of independents, and two-thirds of Republican are in favor of extending the cuts only for families earning less than $250,000 a year. What poll respondents probably don't realize is that the latter question is exactly what the President and the Democrats are proposing.
Reid, Pelosi, and the Democrats could have used this fact as an opportunity to force Republicans to vote on an extension of tax cuts for the wealthy, exposing them to the ire of the American middle class, and to the hypocrisy of calling for deficit reductions while adamantly opposing the expiration of unneeded tax breaks. But it seems the Republicans' messaging campaigns, as usual, are just better executed, regardless of the lack of actual support for their policies.
Senator McConnell has the messaging down: keep blaming the Democrats for spending, spending, spending, while completely ignoring the fact that tax cuts are contributing to the deficit. Make the middle class think that the Democrats are trying to tax them more by portraying them as avid taxers, even though that is the opposite of the truth. And even as House Minority Leader Boehner conceded that "If the only option I have is to vote for some of those tax reductions, I'll vote for it," he was immediately rebuked by Senate Republicans, who seem to know that they have the edge in the messaging campaign to keep Americans confused about how these tax cuts actually work.
This morning, President Bush announced that his administration will be tapping the $700 billion financial stabilization fund for a $17.4 billion loan to save Chrysler and GM—$13.4 billion now and $4 billion more in February, provided they reorganize their models toward more certain profitability. Ford has opted out of accepting government assistance, at least for now, claiming that they can get themselves back on track without taxpayer assistance.
So, a couple weeks after Senate Republicans shot down a bill similar to the one passed in the House—which would have required the Big Three to achieve new, stringent efficiency and fuel economy standards—the Bush Administration has taken up the auto bailout on its own. Initially, the Administration refused to let the auto bailout money come from Paulson’s $700 billion fund (which hasn’t seemed to help much so far, after $350 billion spent), wanting it instead to come from a 2007 energy bill fund dedicated to developing fuel-efficient vehicles. But without successful Congressional legislation moving through Mitch McConnell and the Senate minority, the Administration, acknowledging the pressing need for an auto bailout, will indeed draw from the $700 billion fund.
While Republicans’ obstruction of a bailout bill may have been another means of distancing themselves from the wildly unpopular President, they have effectively taken Congress out of the picture and left the Treasury Department with ultimate authority over the bailout. And perhaps this is what they wanted all along—the symbolic act of defying the Administration while keeping the bailout out of the hands of Democrats, and ideally helping to keep the American automotive industry afloat. Indeed, many of the Administration’s stipulations are less than progressive ones. According to the New York Times,
The loan deal requires the companies to quickly reduce their debt by two-thirds, mostly through debt-for-equity swaps, and to reach an agreement with the United Auto Workers union to cut wages and benefits so they are competitive with those of employees of foreign-based automakers in the United States.
The conservative argument over the past several months has been that the car companies’ failures have been largely a result of worker-favoring labor agreements that have brought costs up higher than they should be. Of course, they contend, it had nothing to do with the size and inefficiency of American cars, and their consequent inability to compete with foreign cars. And so now the conservative solution is to decrease worker salaries and benefits, instead of enacting sweeping changes to automobile efficiency that will wean us off of unfavorable energy sources, cut emissions, and help us resist capricious oil prices—which OPEC has been trying desperately to push back up this week.
I suppose not much can be expected from a lame duck Presidency, especially such an unpopular one. But if there were ever an opportunity to make the most out of a dire situation and get things back on the right track in the long run, now would be the time. Obama’s picks for his energy and environment staff have been fairly impressive, but it’s going to take a serious commitment from the President-elect himself to make sure some of the most necessary changes are carried out, many of which need to come from the automotive industry. And based on his nominee for Secretary of Transportation, it doesn’t seem like Obama is taking the sector especially seriously as a point of comprehensive change.
In such uncertain economic times, government cannot just continue to throw money at failing industries and corporations and tell them to change their habits, or else. Government needs to make more clear prerequisites to financial assistance, and use the opportunity to help our country in the long run. Let's remember that oil prices are low right now, which translates to a lack of incentive to make more efficient cars. Think the Big Three are less myopic than I'm giving them credit for? Try to remember why they're being bailed out in the first place. There is too much at stake right now to handle these issues so delicately. After eight long years of sitting on our hands, we need to start being proactive.
Photos: Senator Bob Corker (R-TN) (New York Times), Obama's energy/environment team (USA Today)
