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The headline is a quote from Lawrence O'Donnell's "Rewrite," that aired last night and it comes at the 08:06 point in the video.
It was one of the most informative episodes I have ever seen about the sausage-making required to get a deal done and a bill made in Washington, D.C.,--by someone who has actually done it.
Also check out WineRev's diary, The Left's Sequester Leverage, which provides excellent information about the advantage the Democrats have in the debt ceiling deal to come.
Here's my transcript of Lawrence O'Donnell's "Rewrite".
JOHN BOEHNER: It's a very simple equation. Tax increases destroy jobs.LAWRENCE O'DONNELL: So that's the big lie. Right? That's the big Republican lie about taxes and yeah the way John Boehner just said it: It's a lie.
We did the biggest tax increase in history in 1993. The economy soared. Unemployment went down dramatically.
That's the Democratic party's answer to the Republicans big lie.
But then, there's the time, that taxes did destroy jobs and Democrats admitted that and fixed it and they fixed it without any help from a single Republican.
As mentioned here last night, the last time Congressional Republicans voted for a tax increase was in 1990 under President George H.W. Bush and that included a tax increase that was a brand new tax, a luxury tax on cars, private planes and private boats.
The automobile industry was not hurt by the luxury tax on cars. It meant a $300 tax on a $33,000 car over 20 years ago, which back then was a very expensive car.
But the luxury tax on boats?
It wiped out jobs in the boat-building communities in Rhode Island, in Maine and elsewhere.
It was not a tax on commercial fishing boats--just new boats, recreational boats--priced over $100,000.
It was never going to hurt the cop, or the autoworker or the teacher who goes out on the lake in the summer, with a little island and a little outboard.
Just new boats, big boats, over $100,000. Something that no one actually needs. A perfectly targeted luxury tax. Right?
New boats over $100,000. But that tax instantaneously killed boat-building jobs in America. It did not kill mega yacht-building jobs in foreign countries, where the mega-rich went to buy their newest floating palaces. It did not kill boat-selling jobs here in the United States because the tax didn't apply to used boats.
So the buyer who was looking at a $200,000 new boat or a million dollar new boat, took another look at the market here and went out and bought a used boat--maybe a year or two old--and didn't pay any tax at all, no matter how much they paid for the used boat.
John Chafee, then a Republican senator from Rhode Island, teamed up with Democrat George Mitchell of Maine (who also happened to be the Majority Leader at the time), to teach the Senate that the luxury tax on boats was basically raising zero revenue.
It really was.
And it was killing jobs which meant it was actually losing money for the Treasury because those unemployed boat builders were no longer paying any income taxes.
A classic case of unintended consequences which we set about to fix in 1993, when the Senate was working on a huge deficit reduction bill that cut Medicare spending and increased income tax rates and while we were at it, got rid of the luxury tax on boats.
John Chafee was then known as a moderate Republican from Rhode Island. Today his voting record would qualify him as a liberal Republican from Rhode Island.
John Chafee liked most of what we were doing in that deficit reduction bill. He did not like tax increases. But he had voted for tax increases before, under Republican Presidents.
He certainly thought the Medicare cuts were a necessary step and he loved--and I mean, loved--the elimination of the luxury tax on boats.
At that point, there was nothing more important to Republican John Chafee, in the Senate, than repealing the Rhode Island, job-killing, luxury tax on new boats.
04:07
Before putting the repeal in the bill, I personally went to John Chafee and tried to get his vote for the tax bill on the condition that we put in the repeal of the luxury tax on boats.And I couldn't get his vote.
John Chafee's dear friend, then the chairman of the tax committee, Senator Moynihan, tried toget Senator Chafee's vote on the basis of the repeal of the boat tax and brought a broader appeal to John Chafee's old-fashioned Republcan sense of fiscal responsibility.
And he could not get John Chafee's vote.
There were other Republican votes we were hoping to get--all Senators who would now be considered liberals in the Senate.
But we couldn't get one of them--not one Republican vote--because the bill contained increases in income tax rates.
Now if you know that story. If you've ever actually tried to get a Republican in the House or Senate to vote on an income tax rate increase, proposed by a Democratic president--if you've done that--and perhaps only if you've done that, then you understand how hard it was for President Obama to get a tax increase out of a Republican House of Representatives and out of a Senate where the Republicans can block anything.
Most pundits and members of Congress for that matter have never negotiated anything more complicated than a car loan or a mortgage and some of them will surely continue to criticize the President's negotiating skills but the President was playing a very long game here, literally years of strategizing, including allowing a two-year extension of the Bush rates in order to get strategically positioned, so that he could force Republicans to cast a vote they vowed never to cast.
05:57
JOHN MCCAIN: I stand on my record and my record is 24 years of opposing tax increases and I oppose them and I will continue to oppose them.LO: So first of all, Senator Barack Obama had to beat John McCain to win the Presidency. Then he had to go and win re-election while his Republican opponents were saying this every day:
ERIC CANTOR: We say, we weren't elected to raise taxes. We want to go and help people get back to work.
LO: And President Obama was not just trying to get these guys to vote for a tax increase. He needed them to vote for an extension of unemployment benefits, which were going to be cut off on New Year's Day.
The dynamics of the fiscal cliff gave the President the strategic advantage of negotiating the tax side of what he wanted to do but he absolutely had no leverage on the unemployment side of the bill.
He was also absolutely determined to not let that lifeline be cut off to those people who have been out of work for so long and so he made a minor concession to Republicans on exactly where the top tax bracket would kick in.
07:13
And the President and the Democrats very cleverly set that threshold at exactly where it would be today if the Clinton tax rates had never been repealed: a 39.6 percent tax rate on incomes over $400,000.When we enacted the 39.6 percent rate in 1993, it was on incomes over $250,000. Adjusting for inflation, which the IRS actually does every year with the tax brackets, that $250,000 in the last 20 years, has moved all the way up to $397,000.
So the Republican party, which voted unanimously against the 39.6 percent top tax rate under President Clinton, provided more than enough votes to restore it under President Obama.
08:06
I have not heard one word of criticism of President Obama's negotiating skills from anyone who has ever been in the room, with a real live, Republican--one on one--trying to get that Republican to vote on a tax increase.
I was in the room with President Clinton when he caved on the big item in the tax bill in 1993. Some of you might remember the so-called BTU tax, a tax that Al Gore was supporting, on all energy sources.It was the centerpiece of the Clinton tax bill. And the President gave up on it in the Oval Office on the day that we told him that we did not have the votes for it in the Senate.
And that was the right thing to do. The Presidential thing to do.
I never admired President Clinton's quick decision-making more, than in that moment, when he set us free to go pursue a simple, old-fashioned, increase in the gasoline tax.
So instead of a big, shiny, new environmental tax, we got a tiny little 4.3 cent increase in the gasoline tax. And when the bill passed in the Senate at 2 o'clock in the morning--the time these bills always pass in the Senate--there were no reports of President Clinton caving on the BTU tax.
The President did what he had to do to get the job done. The President did what he had to do for the good of the country.
That's what the oath of office promises he will do.
And so the Clinton top income tax rate of 39.6 percent is back in law tonight, because once again, the President did what he had to do to get the job done.
The President did what he had to do for the good of the country.