04.16.12

Why Democrats Feel Joy in GOP’s Defeat of Buffett Rule

Senate Republicans killed the bill that would have slapped a 30 percent tax rate on millionaires, but for Democrats the vote late Monday is a weapon they can use against the GOP and Romney in November.

Senate Democrats knew they would lose a vote on the Buffett Rule on Monday, but they forged ahead anyway—not in spite of the chance that Republicans would filibuster it, but because they knew that’s exactly what the GOP senators would do.

And the plan had the added benefit of highlighting what Democrats consider to be Mitt Romney’s biggest political vulnerability—the former venture capitalist’s vast wealth. Because nearly all of Romney’s earnings are derived from investments, he estimated this year that he paid 14.5 percent tax over the past two years on more than $40 million of income, well below the rate for most middle-class Americans. The Buffett Rule, named after billionaire Warren Buffett, would require anyone making more than $1 million a year to pay a minimum 30 percent tax.

Privately, Democratic aides called the losing 51–45 vote anything but a defeat—seeing the Republican opposition to it as feeding directly into the portrait they want to paint, heading toward November, of the GOP and its nominee as elitist and disconnected.

Sen. Chuck Schumer, who pushed for the vote the day before Americans must file their own tax returns, called Romney “the poster boy for this.” He told reporters, “It could be called the Buffett Rule, it could be called the Romney Rule. He isn’t going to want to have this inequity remain when he is an example of it.”

One by one, other Democrats took to the Senate floor to insist that the chamber pass the popular bill that they knew was about to die. A new CNN poll showed 72 percent of Americans, including a majority of independents and Republicans, supported the idea of the highest earners paying at least 30 percent in federal income taxes.

“We’re at a stage where billionaires are paying lower taxes than bus drivers, so this ought to be something we can agree on,” said Sen. Sheldon Whitehouse, the author of the Senate bill.

Senate Majority Leader Harry Reid called it a matter of basic fairness, pointing out that the super-rich in America are paying their lowest effective rates in five decades, and blaming Republicans for fighting to maintain the status quo. “When the richest few are making more than ever before, they can afford to shoulder more of the burden,” Reid said.

Vermont’s socialist senator, Bernie Sanders, hammered Republicans for enabling an oligarchy in the economy, over democracy. “It is absurd that at a time when our country has a $15 trillion national debt and enormous unmet needs, the wealthiest people in this country have an effective tax rate that is lower than many middle-class workers,” Sanders said. “It’s wrong from a moral perspective and it is also very bad economic policy.”

Sen. Joe Manchin, West Virginia’s conservative Democrat who often strays from the party line, voted with the Democrats and called the Buffett Rule “a small step toward fixing a broken system.”

Even though Democrats thought they had Republicans just where they wanted them, plenty of GOP senators stood up to speak out against the Buffett Rule and to try to call out Democrats for forcing a vote on something everyone knew would fail. They dismissed the vote as an election-year stunt and, hours after Grover Norquist held a press conference opposing the rule, argued against raising taxes on anyone, especially the highest earners, during a recession. As many times as Democrats mentioned Mitt Romney, the presumptive GOP nominee’s name never came up on the Republican side of the aisle.

Sen. Rob Portman (R-Ohio), who often is mentioned as being on Romney’s shortlist for vice president, said the Senate needs to deal with overall tax reform (a process that took four years under President Reagan) instead of pursuing one-off fixes he said won’t work anyway.

“We’re debating a political proposal that no one can argue creates a single job, except maybe some tax accountants because it adds more complexity to the tax code,” Portman said.

Minority Leader Mitch McConnell called the bill “a gimmick” and argued that the government hasn’t shown it can spend tax dollars responsibly in the first place. “Does anybody seriously think the government would do a better job spending this money than the people from whom they would extract this additional tax? It’s completely ludicrous.”

A House oversight hearing about the General Services Administration’s gross misuse of funds earlier in the day may have helped make McConnell’s point.

Sen. Bob Corker, the Tennessee Republican who has never been called a bomb thrower, dismissed the vote as political theater. “I think most of us know today’s exercise is just a political exercise,” he said. “It’s not intended to deal with deficits. It’s intended to divide.”

“It could be called the Buffett Rule, it could be called the Romney Rule. He isn’t going to want to have this inequity remain when he is an example of it.”

Regardless of the merits of the Buffett Rule, there was plenty of reason Monday to believe Corker was right. Even before the Senate was in session for the day, Democrats rounded up reporters to discuss the upcoming vote, talking about the outcome in a way that predicted the failure of the vote rather than its passage.

But Schumer insisted that Republican opposition to a bill is no reason not to bring it up. “If we did that, we would never have a payroll tax-cut bill,” he said, pointing out that GOP House members vocally opposed that bill initially, too. And he left no doubt that losing the battle today could be a part of winning the larger war against Republicans later.

“For the first time in memory, maybe even ever, they are on the defensive on their signature issue of taxes,” Schumer said. “Even if we come up short of the 60 votes needed, we will keep pushing this issue all year long.”