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This week, Congressional Democrats found that they could not enact policies that economists find to be the most effective economic stimulus (extended unemployment benefits, tax cuts for low-income families) unless they gave into Republican demands to also enact something that provides virtually no economic stimulus — tax cuts for millionaires.

It would be difficult to explain to a high school social studies class how this happened. The majority of Americans want the Bush tax cuts for the rich to expire. The majority of the House of Representatives and the Senate feel the same. So does the President of the United States. In fact, Barack Obama campaigned on allowing the Bush tax cuts to expire, as scheduled, but only for income in excess of $200,000 for unmarried taxpayers and $250,000 for married taxpayers. Over 80 percent of the revenue savings from Obama's (original) plan would have come from millionaires.

And yet, the House and Senate approved legislation to extend the Bush tax cuts for even the very richest taxpayers for two years. This turn of events is a stunning victory for those who want to continue the economic policies of George W. Bush — policies that are as discredited as any could possibly be.

Before the compromise negotiated by President Obama and Republican leaders was accepted, the House passed a bill based on President Obama's original tax plan. The Senate tried to as well but it was filibustered by Senate Republicans. That means Senate Republicans voted against a full extension of the Bush tax cuts for 98 percent of taxpayers and a partial extension for the two percent with incomes above the $200,000/$250,000 threshold.

Senate Democrats then voted on their tax plan again, except with the threshold raised to $1 million, and Republicans filibustered that as well. Republicans literally blocked tax cuts for all Americans in order to secure larger tax cuts for millionaires.

The Senate operates under rules in which a bill supported by 59 percent of the chamber does not have enough votes to pass. This gives a distinct advantage to whichever party is willing to block any and all legislation even if the result will be economic catastrophe. Conversely, it creates a serious disadvantage for whichever party is committed to avoiding that catastrophe at all costs. It's a bit like a hostage situation, in which one party cares about the life of the hostage and the other does not.

And so, the Democrats, committed to providing extended unemployment insurance benefits for an additional 13 months and extending tax cuts for low- and middle-income families, were forced to give into the demands of Republicans who were willing to allow the extended UI benefits to end and were willing to allow tax cuts to expire for families at every income level.

Of course it's true that some of the tax breaks in the compromise plan go to low- and middle-income people. But, as our report explains, over 38 percent of the tax breaks next year will go to the richest 5 percent of taxpayers. Over 25 percent of the benefits will go to the richest one percent — and that's more than will go to the entire poorest 60 percent of taxpayers.

The procedural rules of the U.S. Senate have made that chamber the greatest embarrassment of the democratic world. Meanwhile, the House of Representatives will be controlled for the next two years by politicians who purport to believe that cutting taxes causes government revenue to increase. The political debate is driven by pundits who think that the federal budget crisis will be solved by the coming together of the two parties — even though one of those parties has made it clear that they will only accept a budget overhaul that reduces revenues rather than increases them.

Our sole hope lies in our ability to convince the public that the plans offered by anti-tax, anti-government lawmakers will devastate public investments that American families depend on while enriching the wealthiest Americans. We have pointed out again and again and again that their plans are a disaster for tax fairness and fiscal responsibility. Our work has only just begun.

Thank you for visiting Tax Justice Blog. CTJ and ITEP staff will soon retire this domain. But ITEP staff are still blogging! You can find the same level of insight and analysis and select Tax Justice Blog archives at our new blog,

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