The Morning Line: Van Hollen: Tax Cuts for Rich ‘Can Be Part of the Mix in the Very Short Term’

BY Terence Burlij and David Chalian  September 3, 2010 at 8:59 AM EST

The Morning Lne

The man charged with saving the Democratic majority in the House seems to be providing an opening on a short-term extension for the Bush tax cuts targeted at the wealthiest two percent of Americans.

“We know from economists on all sides of the political spectrum is that is not a very efficient way to boost the economy — that there are better alternatives. But it seems to me the big issue here is on the Republican demand for permanent tax cuts. Because they are not saying only well let’s keep this going for just one more year,” Democratic Congressional Campaign Committee Chairman Chris Van Hollen said in an interview with PBS NewsHour. “That can be part of the discussion. That can be part of the mix,” he said of the possibility of a short-term extension for the tax cuts for the wealthy so as not to raise anyone’s taxes in the middle of a recession.

“That can be part of the mix in the very short term,” he added.

(Be sure to check out our entire interview with Rep. Van Hollen in our new interview series with key midterm players. We’ll have more highlights on the Rundown blog later today.)

President Obama and congressional Democrats are preparing for a fall debate surrounding the Bush tax cuts. They are eager to make the tax cuts permanent for the middle class, but the president has publicly remained committed to allowing the tax cuts for the wealthiest two percent of Americans expire at the end of the year. Unlike Mr. Van Hollen, neither Speaker Pelosi nor President Obama have yet to publicly appear open to the idea of a possible short-term extension of the tax cuts for the wealthy.

Republicans charge that a tax hike on that top two percent will harm many small businesses in the middle of a recession. In addition, Republicans are calling for a permanent extension of all the tax cuts which would cost $3.2 trillion over the next decade according to the non-partisan Congressional Budget Office.

Many Blue Dog Democrats in the House and a handful of Senate Democrats including Sen. Evan Bayh, D-Ind, Sen. Kent Conrad, D-N.D., and Sen. Ben Nelson, D-Neb., are all opposed to allowing the tax cuts for wealthy Americans to expire at the end of this year.

With the latest monthly jobs report out Friday morning still showing a wheezing economy, President Obama is preparing to roll out some new policy proposals perhaps as soon as next week.

The president has spent his first week back from summer vacation focused on the anniversary of Hurricane Katrina, the end of combat operations in Iraq, and a diplomatic push for Middle East peace.

Next week, he plans to keep public attention on the economy with stops in Wisconsin and Ohio before capping the week off with his first full blown solo press conference in many months.

In a must-read preview, the Washington Post reports what may be the crux of Mr. Obama’s fall economic policy push, including hundreds of billions of dollars of tax cuts for businesses to spur hiring:

“Among the options under consideration are a temporary payroll-tax holiday and a permanent extension of the now-expired research-and-development tax credit, which rewards companies that conduct research into new technologies within the United States.”

BREWER’S BRAIN FREEZE

Political debates are all about the exchange of words and ideas, but perhaps the most significant part of Wednesday’s Arizona gubernatorial debate was what wasn’t said.

The reason: Republican Gov. Jan Brewer’s cringe-worthy opening statement, with two inexplicable pauses, which transformed her performance into cable news chatter, a YouTube sensation and the talk of the political world.

The first stammer last just a few seconds, with Brewer seemingly losing her train of thought. “I have … done so much and I just cannot believe that we have changed everything since I’ve become your governor in the last 600 days. Arizona has been brought back from its abyss,” said the governor.

Brewer continued: “We have cut the budget, we have balanced the budget and we are moving forward. We have done everything that we could possibly do.”

Then, for 10 seconds, the governor said nothing, looked down at her notes, laughed awkwardly, before finally regaining her thoughts, but not full command of the English language: “We have … did what was right for Arizona. I will tell you that I have really did the best that anyone could do.”

In an appearance on a Phoenix radio station Thursday, Brewer acknowledged she drew a blank. “It was the longest 16 seconds of my life,” she said, before adding, “I’m human, I’m human.”

Brewer’s Democratic challenger in the race, state Attorney General Terry Goddard, avoided the gaffe during the debate. He and Brewer battled instead on the economy and immigration, including the state’s controversial new law signed by the governor this past April and which is now the subject of legal challenges.

Brewer said the law helped gain the attention of the federal government, which she claims has not fulfilled its responsibility to secure the border. Goddard accused Brewer of damaging the state’s image and economic prospects by making false statements about beheadings in the desert.

According to the Arizona Republic, reporters tried to press Brewer following the debate on her past claims of beheadings, but the governor refused to answer the questions and quickly escaped into a service elevator.

MIDTERM MADNESS

Two key midterm data points emerged this morning that you will want to take with you as you go about your Friday.

1.From the Gallup organization we get some data that suggest voters leaning to supporting the GOP this year may be doing so as much in anger at Democrats as in support of Republicans.

“Among voters backing Republican candidates, 44% say their preference is ‘more a vote against the Democratic candidate,’ while 48% say it is ‘more a vote for the Republican candidate.’ The 44% of Republican voters who say they are voting more against the Democratic candidate exceeds the level of negative voting against the incumbent party that Gallup measured in the 1994 and 2006 elections.”

2. Charlie Cook, the congressional race watcher extraordinaire, writes in his National Journal column Friday that control of the Senate is more in play now than it has ever been, but still a tough hill to climb for Republicans.

“For much of this year, it seemed a near mathematical impossibility that Republicans could score the 10-seat net gain needed to flip the Senate, which is split between 59 Democrats (including two independents who caucus with Democrats and largely vote with the party) and 41 Republicans. As recently as six weeks ago, I wrote in a CongressDailyAM column that a GOP win was “certainly possible” but “still fairly unlikely.” Although the “fairly unlikely” part is still valid, the possibility of a GOP takeover is growing. To be sure, a 10-seat gain for Republicans remains hard,” writes Cook.

JOBS, JOBS, JOBS

With 60 days left until November’s midterms, Democrats are running out of time to convince voters the economy is moving in the right direction. That task became even harder Friday with the release of the Labor Department’s jobs report showing the unemployment rate edged up a tenth of a point to 9.6 percent in August.

Overall, the economy shed 54,000 jobs as 114,000 temporary Census workers saw their positions come to an end. Private sector employers, meanwhile, added 67,000 jobs, better than the 40,000 or so that had been expected.

President Obama will make a statement on the report at 10 a.m. EDT before departing the White House for Camp David.

After a week spent marking the end of the U.S. combat mission in Iraq and bringing together Israeli and Palestinian leaders for Mideast peace talks, the president has also loaded his schedule next week with events on the economy.

On Monday, President Obama will deliver Labor Day remarks at the Laborfest event in Milwauikee. Then, on Wednesday, he will travel to Cleveland for an economic speech, before capping the week off with a White House press conference.

We won’t have a Morning Line on the Labor Day holiday, but tune into the NewsHour that night for a recap of the president’s speech plus a look at how the campaign season is shaping up in four key states.