The senate filibuster depends on hot air
Part 2 of 2
Frankly, the way that I see it, President Biden is using the filibuster to limit the power of the left wing of his party. In my opinion Biden is a moderate and if all of the crazy thing’s progressives are willing to die on their sword for were enacted there would be a backlash sweeping them from power. The country is not left wing. The filibuster means that he doesn’t have to be the bad guy and openly oppose the extreme left agenda in his party. He will let the filibuster do that for him. He got his stimulus bill through and his next effort will be an infrastructure bill. That would have to be shaped to qualify under reconciliation rules.
At times, the “nuclear option” has been proposed to eliminate the 60-vote threshold for certain matters before the Senate. The nuclear option is a parliamentary procedure that allows the Senate to override one of its standing rules, including the 60-vote rule to close debate, by a simple majority (51 votes if the Senators are equally divided and all 100 Senators are present – the Vice President casting the tie-breaking vote), rather than the two-thirds supermajority normally required to amend the rules.
I know…this is all pretty wonky. But they are going to get wonkier and wonkier in the U.S. senate as the democrats move to pass their agenda when there is no hope of getting 60 votes on anything. They make the assumption that they have a 50-vote majority with the Vice-President breaking the tie and that assumption may be overreaching. Can the democrats hold their simple majority together to invoke a “nuclear option?” The democrats used the nuclear option to confirm Obama Judges blocked in the Senate but that precedence then set is how a simple majority of republicans confirmed their Supreme Court nominees. What goes around comes around.
Biden has a huge agenda and can expect that the GOP will vote against everything. There is no bi-partisan path to national problem solving. The fact that they are bringing up the nuclear option, shows that democrats do not believe that they can make the changes they want and fit it all into reconciliation. They want a huge infrastructure spending bill, education overhaul bill, green energy/climate change bill, gun control measures, expansion of Obamacare, to let Medicare negotiate drug prices, as well as to extend child care and other measures that will otherwise expire and in order to help pay for it, this time they will need to raise taxes. The democrats will try to legislate their agenda through the existing rules until they can’t. There will be a frustration threshold that when hit will likely see them seriously c0nsidering invoking the “nuclear option.” The progressive’s agenda is far too encompassing to be able to fit through existing Senate rules. They will have to drastically pare it down and pass bits and pieces where they can gain a bi-partisan consensus or can use reconciliation…or blow-up Senate rules.
Their agenda has trillions of dollars in new spending in it. I do not have a problem with borrowing for “infrastructure spending”, as roads, bridges, river transportation and other public assets pay back more than their cost over time. Infrastructure has a good track record of producing a return on the investment. Not doing it can be more costly. The problem will be in what gets defined as being “infrastructure”. Biden’s spending plan is so large, they do not want to have to borrow it all. They plan to go back to the age-old method of paying for government by raising taxes. So, the plan to pay for it will come primarily from taxing the “rich”. That requires yet another definition of who is “rich”.
Biden says that it is anyone who has an income over $400,000 or an estate above $3.5 million.
Under the Biden plan the business tax rate goes from 21% to 28%. The top tax rate for individuals goes to 39,6% for income above $400,000 and the capital gains rate would also be 39.6% for gains over $1 mln. It would expand a number of tax credits and eliminate others. “Farming”, as I see it, would be able to tolerate and adjust to most of those changes. The ‘killer’ as I see it for farm and ranch families is the proposed changes to the estate tax laws. Farms build their wealth primarily through long-term holdings such as farmland rather than high incomes. The Biden estate tax changes would be a dagger to the heart of family farms and ranches.
For 2021, the threshold for federal estate taxes is $11.7 million. For married couples, this threshold is doubled, meaning they can protect up to $23.4 million in 2021. The top tax rate is 40%. More important for many farm families is that they have gotten a stepped-up basis for capital gains where property is re-valued at the time of an estate with no capital gains tax obligation. Biden would let the estate tax law revert to 2009 levels which is where the $3.5 mln individual estate tax exemption comes in. It would eliminate the stepped-up basis with a law that would tax unrealized gains at the time of death and eliminate the 1031 property exchange as well. This would devastate the wealth of farm families and take “hating democrats” by the farm sector to a whole new level. It is the worst thing possible that you can do for a party that claims to love family farms. This is where the big fight will end up concentrating on. It would never happen without use of reconciliation or the nuclear option in the Senate. That is where this all ties together.
David Kruse is president of CommStock Investments Inc., author and producer of The CommStock Report, an ag commentary and market analysis available daily by radio and by subscription on DTN/FarmDayta and the Internet.
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