Eric Cantor’s Tax Bill Splits the GOP

Posted July 13, 2012 at 5:39pm

It’s not every day Senate Republicans vote to block a tax cut — especially one championed by House Majority Leader Eric Cantor — but 21, including all of the rumored potential vice presidential picks, did just that last week, in what appears to signal a growing unease with record deficits.

During President George W. Bush’s reign, Republicans passed trillion-dollar tax cuts without paying for them. Many Republicans argued then that the cuts would largely pay for themselves and should not be subject to pay-as-you-go rules, which they allowed to lapse.

But trillion-dollar deficits appear to be tempering that philosophy among some Republicans, at least when it comes to new tax cuts such as the 20 percent, one-year tax break for most companies championed by Cantor.

The Virginia lawmaker’s measure was tabled on a 73-24 roll call.

Sen. Mike Crapo (R-Idaho), a deficit hawk and member of the “gang of six,” voted against Cantor’s bill because it wasn’t paid for.

“Sen. Crapo on this particular vote, did not feel comfortable voting for tax cuts if they were not offset,” spokeswoman Mandi Critchfield said. That may not be the case on all votes in the future, she said.

Crapo told Roll Call earlier in the week that he was coming closer to the position that future tax cuts must be offset.

Several aides to other Senators cited the fact that Cantor’s bill wasn’t paid for as a reason for their bosses’ opposition, but they didn’t want to be quoted or have their bosses’ names appear in print.

Republicans are still expected to line up en masse to vote to extend the Bush-era tax cuts for a year without offsets — but Republicans have started drawing a distinction between paying for extensions of the Bush tax cuts and paying for other tax cuts. (The GOP initially sought to offset an extension of the payroll tax cut last year, for example.)

Others mentioned that both the Democratic bill and Cantor’s measure were unconstitutional because the vote was technically on a Senate version of Cantor’s bill, and revenue measures must, under the Constitution, start in the House.

Many Republicans argued that the country should focus on broad, permanent tax reform, rather than pass more temporary tax cuts halfway through the year.

“Senator [Rob] Portman believes in long-term, permanent tax reform and that we must overhaul the tax code to give businesses the certainty and predictability they need to grow their companies and hire more workers,” said Caitlin Dunn, a spokeswoman for the Ohio lawmaker. Portman, who has been talked about as a potential running mate for presumptive GOP presidential nominee Mitt Romney, voted against the Cantor measure.

Others mentioned as potential Romney running mates — Sens. Kelly Ayotte (N.H.), Marco Rubio (Fla.) and John Thune (S.D.) — also voted against the bill.

“Senator Ayotte believes Congress should take up real tax reform, rather than adding to our already broken tax code,” spokeswoman Liz Johnson said.

Conservative Sen. Jim DeMint (S.C.) also voted no, but not because the tax cut wasn’t paid for. His office noted he has previously voted against temporary, targeted tax relief, including a tax cut for hiring veterans and a temporary extension of the Bush tax cuts and said he prefers a permanent solution instead.

Still, top GOP leaders Mitch McConnell (Ky.) and Jon Kyl (Ariz.) voted for the Cantor proposal, and the rare disunity on a tax vote initially caught some staff off guard, one GOP aide said.

“Several people weren’t wild about the substance … and if it didn’t have Cantor’s name, it likely would have gotten even fewer votes,” another GOP aide said.

Cantor’s bill would have given a 20 percent tax cut to the owners of companies with fewer than 500 employees. Democrats spent months lampooning it as a giveaway to hedge fund owners, sports teams and celebrities such as Paris Hilton and Kim Kardashian. President Barack Obama had also threatened to veto it.

Of course, Republicans also filibustered Obama’s small-business tax cut. Filibusters aren’t a rarity, but blocking a tax cut of any kind is rare for the GOP. (The main argument was that they wanted more votes on their amendments and Senate Majority Leader Harry Reid refused, but Republican Senators repeatedly dissed the substance of the tax cut as well.)

A senior Democratic aide said the GOP seemed unusually disorganized on taxes — and pointed to a lack of direction from Romney.

“They lack any direction from their presidential nominee, and they don’t know what to do,” the aide said.

Aides to the Romney campaign and to Cantor’s office declined to comment Friday.