CBS's Smith to DNC Chair: Are Higher Taxes 'Ever Going to Go Back Into Effect?'

In an interview with Democratic National Committee Chairman Tim Kaine on Friday's CBS Early Show, co-host Harry Smith seemed to lament the deal to extend current tax rates and wondered: "...this gets extended...assume the economy's much better two years from now, assume you still have a Republican-dominated Congress, there's any chance that these taxes ever going to go back into effect?"
 
Smith's use of the phrase "back into effect" suggests that the higher tax rates prior to the Bush-era cuts were the natural appropriate levels. In a report prior to the interview, senior White House correspondent Bill Plante continued to push the idea that the deal would cut taxes rather than simply maintain current rates: "The biggest sticking points for House Democrats: the extension of the Bush-era tax cuts for families making more than $250,000 a year. And the agreement on the estate tax, which would raise the inheritance amount exempted from tax from 3.5 million to 5 million and reduce the tax rate from 2009 by 10 points."

Plante made no mention of the fact that the 2010 estate tax rate is zero and that any inheritance tax in 2011 would be an increase. As NewsBusters' Scott Whitlock reported on Thursday, all three networks have inaccurately reported on the issue.

Smith did highlight the division among Democrats over the tax deal. At the top of the program he declared: "Tax cut backlash, House Democrats rally against President Obama and reject his compromise with Republican leaders....are the Democrats in disarray?" In his first question to Kaine, Smith challenged the idea that congressional Democrats would oppose the deal: "Are House Democrats playing chicken with this and are they willing to drive off the cliff to make a point?" Kaine replied: "Harry, I don't think they're willing to drive off the cliff because nobody wants to get to January 1 and see people hurt. Middle-class and low-income working people are going to see their taxes go up from 10% to 15%, a 50% increase on January 1."

Smith followed up by wondering if the opposition was "really just posturing or theater," that Democrats simply have "got to be able to show their supporters, 'Look, we've got a spine, we didn't cave on this deal.'" Kaine seemed to agree: "Well, that may be part of what's going on."

Here is a full transcript of the segment:

7:00AM TEASE:

HARRY SMITH: Tax cut backlash, House Democrats rally against President Obama and reject his compromise with Republican leaders.

UNIDENTIFIED MAN: This was a take-it-or-leave-it deal. We're saying leave it.

SMITH: So, are the Democrats in disarray? We'll ask the head of their party in an exclusive live interview.

7:04AM SEGMENT:

SMITH: Now to the argument on Capitol Hill, where late last night House Democrats voted not to take up the tax deal worked out between President Obama and Republican leaders. At least not in its current form. CBS News senior White House correspondent Bill Plante has the latest. Bill, good morning.

BILL PLANTE: Good morning, Harry. The White House is signaling that it will accept some minor changes in this deal but they say there's absolutely no give on the big items. And the President is suggesting that there could be severe economic consequences if it doesn't pass.

[ON-SCREEN HEADLINE: Defiant Democrats; Lawmakers Take On Obama Over Tax Cut Deal]

BARACK OBAMA: This agreement would boost economic growth in the coming years and has the potential to create millions of jobs. But, if this framework fails, the reverse is true. Americans would see it in smaller paychecks that would have the effect of fewer jobs.

PLANTE: But 54 defiant Democrats in the House say they won't support the current deal the White House reached with Republicans.

LLOYD DOGGETT [REP. D-TX]: We were told yesterday by the Vice President this was a take-it-or-leave-it deal. We're saying leave it.

PETER DEFAZIO [REP. D-OR]: What unfettered greed on their part to do something which benefits a very, very, very few.

PLANTE: The biggest sticking points for House Democrats: the extension of the Bush-era tax cuts for families making more than $250,000 a year. And the agreement on the estate tax, which would raise the inheritance amount exempted from tax from 3.5 million to 5 million and reduce the tax rate from 2009 by 10 points. But there are parts of the compromise that Democrats support. Specifically, a one-year, 2 percentage-point payroll tax cut and a 13-month extension of unemployment benefits. In an interview with NPR released just this morning, the President makes clear that the compromise is still a work in progress.

OBAMA: Keep in mind, we didn't actually write a bill. We put forward a framework. I'm confident that the framework is going to look like the one that we put forward.

PLANTE: Well, that framework would cost about $900 billion, and that's another sticking point. But there's a test vote in the Senate, probably tomorrow, and if enough people vote for it, that could put pressure on the House to move it forward. Harry.

SMITH: Bill Plante at the White House this morning, thank you. Joining us now exclusively from Washington is Democratic National Committee Chairman and former Virginia Governor Tim Kaine. Governor, good morning.

TIM KAINE: Harry, good to be with you.

SMITH: We know that Democrats and Republicans basically all want these Bush tax cuts, which are, you know, due to expire at the end of the year, they want them to go forward. Democrats are arguing, saying, 'You know, we'd rather have a quarter million dollars or millionaires be taxed on that.' The President says that's not going to happen. Are House Democrats playing chicken with this and are they willing to drive off the cliff to make a point?

KAINE: Harry, I don't think they're willing to drive off the cliff because nobody wants to get to January 1 and see people hurt. Middle-class and low-income working people are going to see their taxes go up from 10% to 15%, a 50% increase on January 1. And we've got to have an extension of unemployment benefits. And so, you see the House doing what a legislative body always will, is that they're going to tinker around with it and try to find their own adjustments, but the framework is a set one. We've got to make these tax cut policies stick for the two-year extension come January 1 so Americans don't get hurt and we can spur more economic growth.

SMITH: Is this end up being just – really just posturing or theater, then? Because a lot of these Democrats come from heavily Democratic districts where they were easily re-elected in the election in November. They've got to be able to show their supporters, 'Look, we've got a spine, we didn't cave on this deal.'

KAINE: Well, that may be part of what's going on. And again, there may be some adjustments, as the President indicated, off the framework. But no matter what kind of district you live in you've got people who are going to get hurt if these tax cuts expire. The President didn't like having to agree to a situation that would accept the notion that those at the top end don't have expiring tax cuts but we're not going to let Americans get hurt and we need to continue to spur the economy.

SMITH: What is the chance – I mean, this gets extended, is a two-year extension – assume the economy's much better two years from now, assume you still have a Republican-dominated congress, there's any chance that these taxes ever going to go back into effect?

KAINE: Well, I think so. Look, by extending it two years, and I think this is going to happen, you're putting the debate about tax cuts for the wealthiest right in the heart of the presidential election, which, as you know, it's kind of a national plebiscite on important policies. I think the President feels very calm and confident that he can make the case during that campaign that we shouldn't be extending these tax cuts for the wealthiest, will put that in right in the laps of the American public and they can make that decision in 2012.

SMITH: Serious question with 30 seconds left, any real chance that these tax cuts are left to expire at the end of the year?

KAINE: I think there's virtually no chance. This is about governing, Harry. And Congress has got to govern now because the American people are counting on them to do the right thing. I think they will continue for two years.

SMITH: Governor Tim Kaine, we always appreciate your time. Thank you very much, sir.

KAINE: You bet, Harry. Thanks.

SMITH: Alright, take care.
 

Kyle Drennen
Kyle Drennen
Kyle Drennen is a News Analyst for MRC