Prime Suspects

08.01.12

Capitol Hill Whodunit as Congress Feuds Over Bush Tax Cuts

A day before leaving early for their August recess, House Republicans voted down a Democratic tax-cut measure while approving their own—which Obama’s pledged to veto. Patricia Murphy on who’s being held ‘hostage.’

Democrats and Republicans agreed on one thing Wednesday as they debated whether to extend the 2001 and 2003 Bush tax cuts for all Americans. Someone or something—a “midnight menace,” in the words of one Republican—has taken America’s middle class hostage, and the people on the other side of the aisle are the prime suspects.

“In their quest to raise taxes on the so-called wealthy, some of my Democrat colleagues have made it clear that they are willing to hold low- and middle-income Americans hostage,” said Rep. Dave Camp, the top Republican on the Ways and Means Committee. Camp argued that a one-year extension of the Bush tax cuts for all taxpayers would give Congress time to reform the entire tax code, a process that took nearly four years in the 1980s, and could create 1 million jobs in the process.

Rep. Sander Levin, Camp’s Democratic counterpart on Ways and Means, said he was worried about the hostages, too. But he had a different idea about who had done the abducting. “This debate is not about tax reform. It is about whether we protect the very wealthy at all costs,” Levin said of the Republicans’ proposal. “Let the middle-income family hostages be released. Release them. Join together for what everybody says they’re for and give a middle-income tax cut to everybody.”

The Capitol Hill whodunit unfolded as the Republican-controlled House agreed 256 to 171 to extend the Bush-era tax cuts for all taxpayers for one more year, while the House defeated a Democratic measure 170 to 257 to extend the tax cuts for a year on all income up to $250,000. For anything more, the Democrats would have let tax rates revert to Clinton-era levels.

By passing the larger tax-cut measure, House Republicans were left agreeing only with themselves, a place they’ve been many times in the 112th Congress. They also took the calculated risk of bypassing any efforts to compromise with the Democrats and letting all of the Bush tax cuts automatically expire on schedule on Jan. 1, with the hope voters will join Republicans in blaming Democrats for the whole mess.

Only an agreement between the House and Senate could change the law as it’s now written. Senate Majority Leader Harry Reid made it clear this week that the House Republicans’ bill was “a waste of time,” as the Senate rejected the same bill last week but passed its own version of the House Democrats’ bill, extending the Bush tax cuts for those with income up to $250,000.

“The two approaches demonstrate a glaring difference in priorities,” Reid said. “But there’s another difference between the two plans: Democrats’ proposal is the only one with a chance of actually becoming law. President Obama has said he would sign it tomorrow.” By contrast, the White House said Tuesday night that the president would veto the Republicans’ tax-cuts-for-all bill.

Despite the need for both sides to compromise on the issue, it was clear before the House voted Wednesday that the debate was never meant to bridge the differences between Democrats and Republicans on the tax cuts. Instead it was meant to highlight and harden those differences going into the November elections.

Privately, Republican aides say they see more value in having Democrats on the record voting for a tax increase than reaching a compromise and splitting the difference between the two positions before the elections. Democrats, for their part, say polls tell them Americans see the tax issue from the Democratic point of view—that the rich have gotten richer long enough—and that voters will side with Democrats on Election Day as a result, especially if the issue is still unresolved. A New York Times/CBS poll of three swing states out Wednesday found 58 to 62 percent of those surveyed supporting Obama’s plan to boost taxes on those earning more than $250,000.

Although the usual mechanism for hammering out the differences between two versions of a bill is a conference committee, Reid said he has no plans to take up the House-passed bill again or move to create such a committee. Instead, in a letter to House Speaker John Boehner on Wednesday, Reid accused House Republicans of accomplishing “virtually nothing of bipartisan substance” and urged Boehner and his caucus “to show Americans that you are still capable of accomplishing something of utility” by passing the Senate’s bill.

Privately, Republican aides say they see more value in having Democrats on the record voting for a tax increase than reaching a compromise and splitting the difference.

Moments before the House voted, the Republican whip’s office sent out a notice to members that the House will leave for its five-week August recess on Thursday, a day earlier than planned, but noted that Boehner would call the House back into session if Reid has a change of heart and decides to take up the already-defeated House bill one more time.

“In the event the Senate takes action, we stand ready to bring the House back into session for the purpose of enacting solutions,” Boehner wrote.

The chances of that happening, Democrats and Republicans agreed with a laugh Wednesday, were slim to none.