An emerging consensus among economists is that Democrats’ Inflation Reduction Act won’t reduce inflation in any meaningful way but could reduce American incomes. James Freeman in the WSJ thinks there is a chance that Sen. Kyrsten Sinema (D.AZ) will refuse to go along with “Washington’s latest Tax and spending splurge.”
But if the Arizonan agrees to be the 50th vote for the plan, that presents the political opportunity of a lifetime for Vice President Kamala Harris. She can embrace her constitutional role and rescue her career while simultaneously sparing U.S. workers and savers from further economic disappointments.
Sen. Sinema seems to be rightly concerned about the impact of new taxes on an economy currently suffering from two straight quarters of shrinkage.
Tony Romm and Jeff Stein report in the Washington Post:
Senate Democrats are discussing whether to dial back some of their proposed taxes targeting wealthy investors and billion-dollar corporations, part of a new scramble to win the support of Sen. Kyrsten Sinema (D-Ariz.) and advance their broader economic agenda swiftly.
One week after brokering a deal that secured the must-have vote of Sen. Joe Manchin III (D-W.Va.), top party lawmakers have set their attention on assuaging the other centrist in their ranks. They have actively engaged Sinema in private negotiations in recent days, opening the door for possible revisions to the health-care and climate-focused bill known as the Inflation Reduction Act.
Publicly, Sinema has said nothing about the measure, and her aides maintain she is still reviewing it.
Democrats and their media cabal often pretend that opposing tax hikes on corporations is merely a Republican political reflex, continues Mr. Freeman.
But there’s now a significant academic literature affirming the intuitive case that raising taxes on corporate income hurts the workers at corporations, not just the owners.
As Mr. Freeman notes, as implausible as it may seem, VP Harris could declare her independence from Joe Biden. Remember, constitutionally Harris does not work for Joe Biden. She cannot be fired by him.
(Harris) is the president of the Senate and as she begins to approach a record for casting tie-breaking votes, none might be more significant than the next one.
If there is one issue where voters are ready to reward a break with Biden policy, it is the economy. Ms. Harris can continue to be a left-wing culture warrior to please Democratic base voters. But if she chooses to exercise independent judgment now, in years to come she may be very glad that she reintroduced herself to Americans as the maverick Democrat who broke with the White House on inflation and economic growth.
Grim Political News
Writing in New York magazine, Gabriel Debenedetti notes that the political news rarely gets much grimmer than it did for Joe Biden on 26 July. Biden was greeted by a surprise poll showing that, were he to run again in a contested primary in New Hampshire, he might command less than 1/5 of the vote.
It was a far-fetched hypothetical — the likes of Pete Buttigieg and Elizabeth Warren won’t challenge him if he runs for reelection — but the dearth of support for a sitting president was still galling. And yet, improbably, the news was even worse for his presumptive heir: Kamala Harris was all the way down in the single digits.
The vice-presidency is, by definition, a nearly impossible job. There’s the prestige and the “one heartbeat away” of it all but few defined responsibilities and political pitfalls at every turn. Eighteen months in, thanks to a combination of Biden’s age and unpopularity, the lingering pandemic and punishing inflation, a relentless opposition, and — most visibly — her own struggles to communicate a satisfactory role for herself, Harris has reached an unparalleled low point.
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