Keith Hennessey, a former economic adviser to President George W. Bush, lays out how he thinks the Democrats could — and should — have dealt with the Bush tax cuts:

In early 2010, pass a budget resolution conference report that creates a reconciliation bill for the President’s preferred tax policy.

… This is the partisan path that would have eliminated Republicans’ ability to block the Democrats’ preferred policy. With a simple majority of the House and Senate, Democrats could have had a complete policy win.

The budget resolution is a concurrent resolution that is not signed by the President. The failure to pass a budget resolution and create a reconciliation bill is entirely a failure of the Legislative Branch.

Even better for the Left, the budget resolution (had there been one) could have provided protected reconciliation status only for tax changes of a certain deficit size. Congressional Democratic Leaders could have precluded the additional $700 B deficit effect of the Republicans’ preferred alternative. Thus the Democratic-preferred alternative would have needed only 51 votes in the Senate, while the Republican-preferred policy would have needed 60. That’s the margin of victory.

Unlike with health care, this would have been a straight-up-the-middle use of the reconciliation process. Republican procedural complaints would have been much less effective than during health care.

There are few downsides to this option, other than the routine annual challenge of making other hard budgetary decisions needed to pass a budget resolution.

Astonishingly, this year Congressional Democrats didn’t even try to pass a budget resolution. At the time I criticized them for irresponsibility and a failure to govern. Now we see a policy ramification of this failure.

When earlier this year I asked Republican friends still on the Hill why they thought Congressional Democratic leaders didn’t choose this path, most shrugged. I would have bet heavily in their favor had they taken this route. I am happy they made this mistake, and I’m mentioning it only now, when it’s too late for them to execute it.