Political Theater Over Tax Cut

Posted July 11, 2012 at 6:24pm

Republicans said Wednesday that they are prepared to filibuster President Barack Obama’s small-business tax cut, believing that any political hit will be minimal even as they go against decades of GOP support for tax cuts of all kinds.

The Republican Party believes it will have plenty of cover for voting to block the tax cut, and some Democrats quietly agree, feeling the White House botched the messaging on the bill — the first item on its “to-do” list — by pivoting earlier this week to extending Bush tax cuts.

For months, Democrats led by Sen. Charles Schumer (N.Y.) had carefully laid the groundwork for a tax trap: Republicans would either have to give Democrats a victory on a small-business jobs bill or face a backlash for blocking a straight-up tax cut because it had Obama’s name on it.

But that trap has been muddied by the White House’s pivot to the Bush tax cuts and by the hard line Senate Majority Leader Harry Reid (D-Nev.) has taken against Republican tax amendments.

Several Republicans said after a Conference lunch Wednesday that they would not go along with the bill if Reid did not give the minority the chance to vote on their amendments. And they noted that the bill technically violates the Constitution because revenue bills must start in the House.

“We’re not shooting with real bullets, so you might as well have the fight over the principle of whether the Senate is going to continue to be the Senate and require members to take votes,” Sen. Roy Blunt (R-Mo.) said. “That’s a bigger principle than whether you’re going to pass some tax bill that isn’t even really a tax bill. … The majority is unwilling to take votes on almost anything, whether it’s the budget, or appropriations or amendments on a bill.”

Republicans say Democrats don’t have credibility to win a PR fight on taxes anyway.

“Do you think anybody in America really believes that the Democrats are more pro-growth and more in favor of lower taxes than Republicans?” Sen. Pat Toomey (R-Pa.) asked. “I don’t think anybody believes that. They’re not going to be able to create that fiction through this one clearly, transparently concocted package.”

Toomey dismissed the tax cut itself — a 10 percent tax credit for additions to payroll and accelerated expensing provisions the GOP has previously supported.

“A few months worth of a temporary tax credit does nothing. … We’re six months into 2012. Decisions have already been made for 2012.”

Senate Minority Whip Jon Kyl (R-Ariz.) said he was unlikely to vote for a bill he couldn’t amend, and he said other Republicans would probably feel the same way.

“I am obviously not going to vote for a piece of legislation that I haven’t been able to help craft,” Kyl said.

He noted that the White House dispatched senior campaign adviser David Axelrod to meet with Senate Democrats Tuesday “to try to get support for what the president was proposing because there were Democrats that didn’t support his proposal.”

Obama’s decision to repeat his vow this week to veto an extension of the Bush tax cuts for the wealthy sparked a brief flurry of second-guessing from several Democratic Senators who want a higher threshold than the $250,000 level Obama has set since he ran for office for years ago. Under Obama’s plan, people making more than $250,000 would not have their current tax rates extended, while lower income levels would.

“We would protect the small business people in this country who create most of the jobs coming out of a recession, the Democrats proposal does not,” Kyl said.  

Reid blocked an attempt by Minority Leader Mitch McConnell (R-Ky.) for side-by-side votes on the Bush tax cuts. Per McConnell’s offer, Democrats would get a vote on the president’s plan and the GOP would get a vote on a full extension of all Bush-era tax cuts. But by the end of the day, McConnell was the one objecting to a similar Reid offer, because he said he needed to review the Democratic proposal and wasn’t comfortable with Democrats choosing the GOP’s amendments.

Reid’s offer was unusual in that he said he would not force either measure to overcome a 60-vote hurdle. Reid also moved to cut off debate on the small-business tax measure, complaining that Republicans were trying to “filibuster by amendment.” Reid’s move also would allow for a vote on the House-passed small-business tax bill, which Democrats have said would allow wealthy individuals, such as Paris Hilton, to claim the break.

Senate Finance ranking member Orrin Hatch (R-Utah) said Democrats deserve the filibuster label.

“We are not filibustering; they are the ones that are filibustering,” Hatch said. “That is the phoniest argument I have ever heard Harry make. … They are the ones that are filibustering because they are not allowing votes.”

Hatch said Republicans feel they have the upper hand in the broader tax debate, which is why they are forcing the issue.

“We are pretty darn sure it’s going to be tough for the Democrats to win on that,” Hatch said.

Democratic leaders, meanwhile, huddled with Obama at the White House for about an hour to talk tax policy, elections and the rest of the agenda in the short time left on the calendar before lawmakers head out of town for the August recess.

Majority Whip Dick Durbin dismissed  the worries of some Democrats behind the scenes that the president had muddied their message: “We can walk and chew gum. We can talk about creating jobs and reasonable tax cuts for working families in the same breadth. We can do both.”

The Illinois lawmaker also sounded confident that Democrats would be able to defeat the Republican push to extend all of the Bush tax cuts for a year.

“I don’t believe that there will be many, if any, Democratic Senators voting to extend the Bush tax cuts,” he said.