Last week, Barack Obama tried changing the subject from a bad jobs report and a sinking economy by shifting back to his class-warfare strategy. Insisting that the American people supported higher taxes on people earning more than $250,000 a year, he challenged Republicans in the House to pass a one-year extension on the other income-tax brackets while hiking taxes on the rest. It looks now like he should have challenged his own party in the Senate, which has balked at taking a vote on Obama’s tax hike:
Senate Majority Leader Harry Reid (D-Nev.) on Wednesday rejected a Republican request to vote on President Obama’s income tax plan amid defections within his caucus on tax policy.
Reid appeared exasperated by the Republican request to vote on extending the Bush-era tax rates when Democrats would prefer to focus this week on a small-business tax package estimated to create 1 million jobs. …
Reid was responding to a request by Senate Minority Leader Mitch McConnell (R-Ky.) to vote on Obama’s tax plan, which would extend the Bush tax rates for families earning less than $250,000, alongside a Republican proposal to extend the 2001 and 2003 tax rates for one year.
“The Senate should make itself clear which policy it supports. This is our chance to do it,” said McConnell.
The White House sent high-profile surrogates to “soothe” Democrats in the House and Senate for pushing a proposal they’d already rejected:
An under-the-radar White House lobbying campaign began to take shape on Capitol Hill on Tuesday, as senior administration officials pressed Democrats to back Barack Obama’s latest tax plan and top political operatives detailed the president’s reelection strategy in battleground states.
In a private lunch meeting with Senate Democrats, Treasury Secretary Timothy Geithner pitched the president’s plan for a one-year extension of the Bush-era tax cuts for families earning less than $250,000, saying it would give certainty to the middle class and plug a hole in the gaping budget deficit. And Geithner tried to assuage concerns by telling Democrats that the president’s plan would ensure that all taxpayers would pay the lower tax rates on their first $250,000 of income — and they would be hit with higher tax rates only for earned income over that threshold, attendees said. …
At the same lunch, David Axelrod, a top campaign adviser, tried to sell Senate Democrats on the political virtues of the president’s tax plan, saying an overwhelming majority of voters in key states supported the Obama plan. He got support from Sen. Al Franken (D-Minn.) who read aloud poll numbers saying just that. …
The one-two lobbying punch from the Obama administration and the campaign marked a concerted effort to quell anxiety in the party over the president’s tactics to win reelection. The president was significantly outraised by Romney in recent months, faced an onslaught of spending from conservative outside groups and remained in a dead heat with the GOP candidate in crucial swing states.
Don’t forget that Democrats already told Obama that they don’t want the cutoff at $250K. Last fall, the Senate specifically rejected that proposal, and the House refused to even consider hiking taxes. Now Obama wants them to sign off on a tax hike — and only a one-year extension of current rates for everyone else — right before the election. Good luck with that.
It’s no surprise that Reid doesn’t want to bring this up for a vote, and it’s a smart play by McConnell to put Reid on the record about it.
Meanwhile, the distraction from the economy won’t last long, as more bad news rolled in today. Wholesale inventories rose in May despite a large drop in oil holdings, while sales fell more sharply than any time since March 2009:
Total wholesale inventories increased 0.3 percent to $484.1 billion, matching the median forecast in a Reuters poll of economists. …
Stocks of durable goods, such as autos, computer equipment and machinery, rose 0.6 percent. Petroleum stocks fell 3.6 percent.
Sales at wholesalers in May fell 0.8 percent, held back by a 4.7 percent decline in petroleum sales. It was the sharpest drop for both readings since March 2009.
At May’s pace of sales, it would take businesses 1.18 months to clear their inventories, the highest such reading since July 2011.
We’re going the wrong direction, and Obama’s running out of distractions.