PROLONGING THE BUSH TAX CUT AGONY

Politico's Mike Allen reports:

WHERE THE TAX-CUT FIGHT IS GOING: Hill sources tell us an income of up to $250,000 a year "is dead as the dividing line" for distinguishing the middle class in extending the Bush tax cuts, based on input from wounded returning Dems. Instead, negotiations will begin around a figure like $500,000 or $1 million. The administration play is to try to "decouple" the middle- and upper-class extensions, with a permanent extension for the middle class and a temporary extension for the top tier (maybe one or two years). "That gives us a better message," said a key Dem. aide.

No it doesn't, you idiot. You think that's going to stop Republicans from whining The small businesses! What about the poor, suffering small businesses? Of course it isn't -- not even at a million bucks. Never mind the fact that the definition of "small business" takes in big Wall Street players, very well-to-do professionals, and others for whom we shouldn't shed any tears; this myth won't die, and the GOP messaging will (as usual) prevail.

More from Mike Allen:

... Most likely outcome on tax cuts: a ONE-YEAR EXTENSION FOR EVERYONE. Second most likely outcome: GOP takes up a retroactive extension as one of the first big pushes of the new Congress.

A couple of days ago I told you that I just want the Democrats to put an end to this process, which is futile because it always ends with them failing to stand their ground. I thought that was the likely outcome -- the usual pattern for Republicans is, after all, to demand 100% of what they want and define any concessions as treason -- but Digby said a couple of days ago that she thought Republicans really might accept something less than a permanent extension, and I think she's right:

I think this may be the one "compromise" the Republicans agree to. They will get credit for extending the cuts from the public, credit for bipartisan cooperation from the Village --- and most importantly, they will still get to run on the issue again going into the presidential election.

Bingo -- and I'll add that they'll lull Obama into believing they can be reasoned with.

Meanwhile, they'll have set the pattern: we'll have this battle every year (which they'll win each time), at least until they take over the entire federal government. And the first subsequent battle will presumably be just before the Iowa caususes and New Hampshire primaries. Will Obama have a nettlesome primary challenger from the left by then? And if he and the congressional Dems support yet another extension (a near-certainty), will he be embarrassed (and weakened) by that challenger's subsequent strong showing? Given the GOP's utter lack of interest in governance and monomaniacal fixation on winning, I absolutely believe the party's leadership has gamed this out and imagined precisely that. (Hell, I think Karl Rove saw back in 2000 that the 2010 deadline would be a problem for Democrats going into the midterms. He's nerdy that way.)