The Great Debate

Republican leaders such as Grover Norquist and Senate Minority Leader Mitch McConnell (R-Ky.) continue to strike a hard line on taxes and revenues, “warning” President Barack Obama that the GOP will not negotiate or compromise when it comes to tax policy and deficit reduction.

From an electoral politics standpoint, the Democrats should “have at it.”

As the election made clear, this policy is out of step with voters. Obama made raising taxes on people making more than $250,000 a year a centerpiece of his economic message – something he emphasized in his recent press conference – and he was rewarded with a resounding victory. Voters also handed Democrats an increased Senate majority, where the tax debate played out front-and-center in many campaigns.

This theme echoed through state politics as well. Voters in California, for example, passed Governor Jerry Brown’s plan to fund K-12 public schools through a revenue increase that comes from the highest earners.

Strikingly, on taxes – an issue long considered Republican terrain – Obama actually held a 46 – 44 percent advantage over GOP presidential nominee Mitt Romney among voters, according to our Democracy Corps/Campaign for America’s Future post-election survey.

Further, in our post-election survey of the presidential and Senate battleground states conducted for a coalition of environmental groups, nearly a quarter of swing state voters said the top reason for opposing Romney (22 percent) and Senate Republicans (24 percent) was their support for giving more tax breaks to millionaires while raising taxes on the middle class. An additional 18 percent said their top reason to oppose Republicans was their backing of tax breaks for companies that outsource jobs.

California is on the verge of becoming a one-party state — but policy gridlock isn’t going anywhere soon.

Democrats now hold all the statewide offices and have a shot Tuesday at achieving two-thirds majorities in the Legislature. Yet they are far from being able to unilaterally resolve California’s fiscal logjam.

For the past decade, California’s fiscal picture has been awash in red ink, legislative stalemates, borrowing and a lot of budgetary gimmickry.  Three governors in a row, Gray Davis, Arnold Schwarzenegger and Jerry Brown, hit a stone wall in trying to resolve the state’s structural deficit—the  imbalance between ongoing spending and available tax revenues — that has persisted in the $10-billion plus range.

– Christopher Swann is a Reuters columnist. The views expressed are his own –

It’s not just California that threatens to sabotage the Obama stimulus. State and local governments across the nation are gradually unravelling federal efforts to revive growth.

The states have been inveterate stimulus eaters in the past. For most of the 1930s the expansionary policies of the federal government were just sufficient to offset the shrinking of state and local governments. Click here for PDF.