Rich Lowry Smacks Down E.J. Dionne on Bush Tax Cuts and Obamanomics

National Review's Rich Lowry on Sunday had a classic debate with Washington Post columnist E.J. Dionne about whether or not the tax cuts implemented by former President George W. Bush should be allowed to expire.

Dionne agrees with President Obama that they should only be extended for folks making less than $250,000 a year; Lowry thinks that raising anyone's taxes right now could send the country back into recession.

With this in mind, NBC's David Gregory opened the panel segment of "Meet the Press" with a discussion about the current state of the economy and how this issue might impact the upcoming midterm elections.

As he tossed the baton to Lowry and Dionne, one got the feeling Gregory was intentionally lighting a fuse he knew would result in some entertaining fireworks (videos follow with transcripts and commentary): 

DAVID GREGORY, HOST: E.J., the economy and taxes and where things stand.

E.J. DIONNE, WASHINGTON POST: Well, actually, I think the administration is in a position where it should pick a big fight with the Republicans. I, I at least half agree with what Rich just said. They're clearly down in this election. If the election were held now, they'd probably lose the House, though not the Senate. I think they can claw back enough to hold on to the House. I think they should pick a big fight on the renewal of the Bush tax cuts and say, "We want to renew them for everybody earning under $250,000 a year. Heck, maybe we can actually renew them for everybody earning under a million dollars a year." Draw a line and say, "We want to give them tax cuts now. They want to fight for millionaires." So you can have that fight. I think they can win it. But they need to shake up this race to salvage some of those seats. They need to hang on to 218 House seats.

MR. GREGORY: Right. I'm going to get to Charlie in a second.

But, Rich, back to the--you know, because I've, I've pressed Republicans on the point of, "Hey, you want to cut the deficit? Well, it's going to cost $3 trillion to extend all of these tax cuts. How do you pay for it?" And Republicans say to me, "You know, that's--that argument is off base here, that it's existing tax policy and that you shouldn't be making that argument." And respond to E.J.'s point.

Readers are recommended to fasten their seat belts, for Gregory likely without knowing it had nicely placed the ball on the tee for Lowry, and the National Review editor was about to launch the longest nationally televised drive of his life straight down the middle of the fairway: 

RICH LOWRY, NATIONAL REVIEW: Well, there, there, there are a couple things. I think E.J.'s political advice is exactly wrong, although I appreciate him half agreeing with me. I'll take what--I'll take whatever I can get.

MR. GREGORY: Right. That may be all you get.

MR. DIONNE: That's great progress.

MR. GREGORY: That may be all you get.

MR. LOWRY: But, you know, before August, before they left--Congress left for the August recess, you had three Senate Democrats saying, "We need to extend all these things less temporarily." And that was before this awful last month the Democrats suffered. I think it only got harder, if not impossible, not to extend all of these. So I expect the Obama administration either to say, "Let's do it for one year," or to punt it to the lame duck session. But even if they extend it for one year, that will be an amazing sign. If you have these large Democratic majorities in the Senate and the House extending all the Bush tax cuts, huge sign of the way the worm has turned politically.

MR. GREGORY: Yes.

MR. DIONNE: One idea is to put on the table, one of the things you could do with the money you save from not giving the tax cut to people earning over $1 million, you could either redistribute the rest of that to people down below a million, or you could begin to create an infrastructure bank to try to build us for the long-term. You need to look like you're making a--you're drawing a clear line with the Republicans.

MR. LOWRY: But there, there, there you're sucking money out of the economy in the short-term in order for the long-term in a weak economy. That makes no sense. Raising taxes, there's no theory in which raises taxes in a slow economy makes sense.

MR. GREGORY: All right.

MR. LOWRY: Keynesians don't favor it, supply-siders don't favor it.

Round one clearly went to Lowry.

A bit later as promised, Gregory brought Charlie Cook into the discussion. As readers will notice, this also set Lowry up to demolish Dionne:

MR. GREGORY: All right, but for everybody here, what is the bottom line? How did the president and Democrats get to this point? Is it a bad economy, case closed, Charlie, or is there a leadership question, a failure of leadership by the president that has got him to this point?

CHARLIE COOK, EDITOR THE COOK POLITICAL REPORT: Democrats desperately needed three things to happen this year. Number one, they needed unemployment to turn around. And when you look at the, the groups that were sort of the booster, that pushed them over the top, among African-Americans the unemployment rate is 16.3, you know, way more than it was when the president took office; Hispanics, 12; young people, 26, the job market for recent college graduates the worst in 35 years. He desperately needed unemployment to turn around. Number two, he needed attitudes toward healthcare reform to fundamentally change, with people saying, "OK...

MR. GREGORY: And that hasn't happened.

MR. COOK: And that--it just hasn't happened. And they had to get control of the agenda. And right now what they're doing is they're paying a price for having focused so thoroughly on health care for a solid year at a time when the economy was deteriorating. And, for a lot of voters, they just see the president and Democrats as having checked the box on stimulus and then gone to cap and trade and health care leaving the economy to deteriorate.

Absolutely outstanding analysis by Cook. With the table nicely set, Gregory invited Lowry and Dionne to continue the debate: 

MR. GREGORY: Have it out, you two. The question of the economy rules everything, or a question of leadership, E.J.?

MR. DIONNE: First of all, in that Donnelly ad, it's interesting that John Boehner, the Republican leader, was also in that picture.

MR. GREGORY: Yeah.

MR. DIONNE: And there are Republicans--the Republicans are unpopular, too. That's going to be something Democrats want to play. I think the biggest mistake Obama made was in not making a big argument from the beginning, "Here's where we started, here's where we're going. It's going to be rough getting there. But if you stick with me, this is going to get better." FDR did that, Ronald Reagan did that. He needed to do that.

MR. GREGORY: But trust in government was different when FDR did it.

MR. DIONNE: Right. But he needed to restore trust in government, and I think he was in a position to do that. He needed to emphasize the way they're actually reforming government, which they are, but nobody knows it.

MR. GREGORY: The flipside of that question, you can address this big one.

MR. LOWRY: Sure.

MR. GREGORY: But is also, have, have Republicans done anything to really regain trust about their leadership...

MR. LOWRY: No, it's most...

MR. GREGORY: ...to an oppositional strategy?

MR. LOWRY: ...it's mostly a free gift from Obama fundamentally fumbling this. And I disagree with E.J. again. I'm going to have to agree with you at some point, E.J. just to be a good colleague here on the set. But people know what Obama's about. They know what the program is. They know he's growing government because he thinks that's good for the economy and good for the country's future. They get it. The problem, I think, is threefold. One is ideological grandiosity. Democrats thought in '08 they had a mandate from heaven to do everything they ever wanted, when really they were just getting an opportunity because people were recoiling from the Republicans and the poor state of the economy.

Indeed. New York Times columnist Tom Friedman made the same point on ABC's "This Week" Sunday about Obama over-reading his mandate. But I digress: 

LOWRY: Then there was the cynical opportunism that Charlie referred to, a crisis is--never let a crisis go to waste. Therefore do health care, try to cap and trade, things that have nothing to do with the economy or may actually be harmful to it. And then three, there's the fact that the program has not worked on its own terms. The stimulus has not worked. So you add all three of those things up and you have a very grim picture. And another huge problem, independents are much closer to the tea partiers on the big issues and even on the smaller hot-button ones--spending, debt, Arizona immigration law, Ground Zero mosque, all that--much closer to the tea partiers than they are to the Democrats. 

Indeed.

Game, set, and match Lowry.

Bravo, Rich. Bravo.