See if you don't lose your lunch by this story by David Halbfinger in the New York Times about the extreme budget problems in Nassau County, New York.
In case you're not familiar with it, Nassau County is the first county you enter when you leave Queens and drive east to Long Island. I can tell you from personal experience and observation that it's a county with a population that is exceptionally wealthly. When I grew up in Brooklyn, you always wanted to date a girl from one of the five towns because of the presumption that her parents had money. I don't know what the comparable experience is now, but back then hanging out at Nathan's in Oceanside was a favorite destination.
This story from Jay Newton-Small of Time confirms what I posted earlier today about the Senate Democratic leadership wanting to vote before the election on extending the tax cuts enacted during the Bush administration.
I will resist the strong urge to say I told you so.
Here's the money quote:
The emerging tax plan is designed, as much as anything else, to clarify the differences between the two parties as they hurtle toward the fall elections. Following on their success with the financial-regulatory-reform bill, Democrats are betting that Republicans will once again take up a legislative battle on behalf of the wealthy. "Republicans are going to have a real choice ahead of them," says a Democratic aide.
It's hard for me to disagree with Pete's reporting and analysis in his post from July 14 that Congress will likely vote to extend the tax cuts enacted during the Bush administration in a lame duck session after the election.
But Pete's statement is misleading. Although Congress as a whole is more likely to act after the election, the Senate is far more likely to debate and pass the extension before the election. In fact, the only way the Senate may be able to get enough votes to stop what may be a virtually inevitable filibuster is if it acts before anyone goes to the polls in November.
The calculus for the Senate Democratic leadership has become a bit easier in recent days as the Republican leadership has increasingly indicated it wants all of the tax cuts -- including the three provisions (the 35 percent top marginal rate on individual income and the 15 percent rate on dividends and capital gains) whose extension the White House did not propose
Pardon my incredulity! Alan Greenspan just taped an interview with Judy Woodruff for broadcast tomorrow and over the weekend. This Bloomberg News story quotes him saying, "They should follow the law and let them [the Bush tax cuts] lapse." He believes it is more important at this point to cut burgeoning deficits than to funnel more money to taxpayers. In a telephone interview after the taping, Greenspan acknowledged that this "probably will" slow growth.
At 10 a.m. this morning, the Senate Finance Committee held a hearing on extending the 2001 and 2003 Bush tax cuts. Former CBO Director Doug Holtz-Eakin and former Deputy Assistant Treasury Secretary Len Burman squared off in a very informative debate. They didn't agree on much, except that we desperately need income tax reform to lower marginal rates and broaden the tax base. Holtz-Eakin would focus on pro-growth policies led by making all of the Bush tax cuts permanent and cutting federal spending, and Burman would only extend the Bush tax cuts temporarily for low and middle-income Americans until Congress produces income tax reform and a carbon tax or a VAT to bring the public debt back to 60% -- a threshold we will cross in a few months time.