The Clock's Ticking

By Varney and Co

Time is running out as Democrats and Republicans struggle to reach a compromise on Bush-era tax cuts. If Congress does not act fast, the tax cuts will expire at the end of the year. Democrats want to extend the 2001 and 2003 tax cuts only for families with annual income of less than $250,000, allowing the upper brackets to expire. Republicans are calling for tax relief for all Americans, including the wealthy. S.E. Cupp, author of “Losing Our Religion,” joined Varney & Co. this morning to discuss the possibility of a tax compromise.

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“The last thing you want to be accused of right now is compromise,” said Cupp. “It’s a bad word these days. Republicans have to basically come out of the gate looking real strong saying we’re not going to give an inch on this. They’re pleasing the tea party contingent and want to make the most of this moment.”

A middle ground needs to be found if Congress is going to make progress. Dozens of congressional Democrats embraced the Republican stance for extension of tax cuts for the wealthy in tough midterm reelection battles, forcing the Democratic leadership to wait until the lame-duck session to vote on the issue. Now, neither side is budging.

“[Republicans] have to go in looking pretty strong. The problem is so does [President] Obama, so do the Democrats,” said Cupp. “[Democrats] just took a beating and they’re looking to regain some momentum as well.”

As time passes, the chance of permanent extensions of Bush-era tax cuts for all Americans dwindles. If Republicans are given the option to extend the tax cuts for all Americans for two years from the Democrats, should they compromise? “It’s in everyone’s best interest, both economically and politically to extend these tax cuts for as many people as they can and for as long as they can,” said Cupp. “Everybody wins.”