If the lame-duck session of Congress shows anything, it’s that
Congressional Democrats learned nothing from their recent electoral
“shellacking” and, perhaps surprisingly, the Republicans have
learned something.
On Thursday afternoon, the House passed a measure
extending the Bush tax cuts except for the upper income bracket.
The final count was 234-188, with 20 Democrats voting against the
amendment and only three Republicans supporting it, with one of the
lonely three being the often-lonely Ron Paul.
The intent was to make Republicans look bad by voting
against “middle-class tax cuts”; that purpose was not lost on
soon-to-be Speaker of the House John Boehner who called the vote
“chicken crap.” House Majority Leader Steny Hoyer (D-MD) pushed the
vote forward while talking about tying a vote on an extension of
the current tax rates for higher income earners to a vote on
extending unemployment benefits.
Hoyer’s move appeared to conflict with the outcome of
Tuesday’s meeting between Barack Obama and House and Senate leaders
of both parties following which negotiators were named by all sides
to try to reach a compromise. Rep. Dave Camp (R-MI), who will be
the chairman of the House Ways and Means Committee in the next
Congress, and Senator Max Baucus, the Senate Democrats’ negotiator
and chairman of the Senate Finance Committee, both called Wednesday
for a delay in the vote. As Baucus sensibly put it, “I think it’s
important to have that meeting [of the appointed negotiators] first
to see where we are.”
However, the fact that Chris (“We’ll keep the majority”)
Van Hollen (D-MD) was chosen as the House Democrats’ negotiator was
a clear early signal that the Democrat leadership has no interest
in anything but soaking the so-called rich, that they’re interested
in the most spiteful possible end to the most hyper-partisan
anti-business Congress in generations.
A question going into the vote was whether outgoing
Speaker of the House Nancy Pelosi has the same arm-twisting ability
that she had before presiding over the destruction of the political
careers of more than a quarter of her caucus. Would the two dozen
“Blue Dog” Democrats who lost their jobs (and the two dozen who
didn’t lose) side with the woman who made them choose between the
Obama/Pelosi/Reid union-dominated dystopian vision of America and
the wishes and values of their own constituents? (One still has to
wonder just what caused so many of those Blue Lap Dogs to choose
the former over the latter.)
The answer, sadly, was yes. Of the 54 members of the Blue
Dog Coalition who claim to be “independent voices for fiscal
responsibility,” only 10 voted against Nancy Pelosi, and only five
of those will be in Congress next year. Of the 10 “no” votes who
were not Blue Dogs, six will be in Congress next year but most of
those inhabit the far left wing of the Democrat party and voted
against the measure because they oppose extending the Bush tax cuts
for anybody.
In the meantime, Senate Republicans are showing they got
the message of November 2. All 42 current Republicans (it’s now 42
because Mark Kirk of Illinois got seated immediately) signed
a
letter to Majority Leader Harry Reid saying they
“will not agree to invoke cloture on the motion to proceed to any
legislative item until the Senate has acted to fund the government
and we have prevented the tax increase that is currently awaiting
all American taxpayers.”
In other words, even the barely-Republican Olympia Snowe
and Susan Collins from Maine, George Voinovich (OH), Lisa Murkowski
(AK), and the newest RINO, Mark Kirk, have committed to blocking
the Democrats wish-list of such things as repeal of “Don’t Ask,
Don’t Tell,” passage of the newest iteration of the START Treaty,
and especially extension of the unemployment-causing unemployment
benefits until a budget and the tax rate extension are
passed.
In their letter Senate Republicans also made clear they
have no interest in dividing the vote on extending the current tax
rates along income bracket lines; they want all the Bush
tax cuts extended: “If Congress were to adopt the President’s tax
proposal to prevent the tax increase for only some Americans, small
businesses will be targeted with a job-killing tax increase at the
worst possible time. Specifically, more than 750,000 small
businesses will see a tax increase, which will affect 50 percent of
small-business income and nearly 25 percent of the entire
workforce.” There appear to be half a dozen Senate Democrats who
agree with the Republican position.
This is a critical point for Republicans to stick to, and
not just for the politics of this vote: the vote on extending the
current tax rates must cover all tax brackets, and the extension
for all brackets must be of equal duration. The worst possible
outcome for the economy (short of allowing all the tax cuts to
expire) and for Republicans politically would be to have the upper
income tax rates reset at a different time than the rest, leaving a
stand-alone future vote on that bracket’s tax rate.
Politically, I would not want to count on the
barely-Republicans in the House and Senate to stick to their
current low-tax discipline, especially if economic conditions
improve and the Democrats argue against extending the top tax rate
in the name of “deficit reduction” or try to enforce “PayGo” rules
making extending the rate “too expensive.” Economically, as bad as
high tax rates are, uncertainty may be even worse. Businesses are
formed and their plans are made based on expectations about the
rules of the game for more than just a year or two in the future.
Leaving in flux a tax rate that impacts so many small and mid-sized
businesses is a recipe for continuing the weak job growth that is
one of the signature characteristics of the current
“recovery.”
While it remains to be seen whether the historically
unreliable Senate Republican crew sticks to its guns, getting the
sort of unanimity represented in their letter to Harry Reid shows
that Republicans fear voter reaction more than Democrats do. The
difference makes sense: The House Democrats who were vulnerable to
being unelected by citizens who vote based on economic rationality
or disgust with arrogant, imperial government have already lost.
The rest, given their ability to survive last month’s tsunami, are
presumably safe, living in districts full of people who will always
vote “D” despite the persistent obvious failures of Progressive
policy.
Some Senate Democrats from purple or red states who were
not up for election this year such as Max Baucus and Nebraska’s Ben
Nelson don’t know that they’re safe and are likely to side, at
least occasionally, with their Republican colleagues. As
importantly, Republican senators watched Tea Party candidates beat
“establishment” GOP candidates in primary races around the country.
Republican members of Congress will be kept in line by the thing
that scares politicians most: the possibility of not being
re-elected. This fear, more than anything, is the value of the Tea
Party movement and the reason that Tea Party activists must
consistently remind Republican politicians that we’re watching what
they do, not just what they say.
In the meantime, the House Democrat leadership will play
its games, weakened by the conciliatory hints made by Barack Obama
and his teleprompter-script writer-in-chief, David Axelrod. But
they’re fighting a losing game at this point, just a few weeks away
from becoming the minority party and facing the most unified
Republican Senate caucus in recent memory. Pelosi, Hoyer, and Van
Hollen will be seen as leftist toddlers lying on the floor,
pounding their fists and screaming as the adults in the room give
them a well-earned “time out” after forcing the extension all the
current tax rates and reminding House Democrats that America just
voted overwhelmingly against self-destructive class
warfare.
And as if all this isn’t confusing enough, word leaked out
on Thursday that President Obama wants to extend certain tax
provisions contained within the “stimulus” bill along with the Bush
tax cuts, making the argument that Keynesian redistribution and
spending is better for the economy than tax cuts. This
intransigence, along with Pelosi’s, increases the chances that
Senate Republicans will call the House’s bluff and refuse to pass
anything, leaving it to next year’s House GOP majority and narrower
Democratic majority in the Senate to pass an extension of all the
Bush tax cuts and dare Barack Obama to veto it.
UPDATE: Senate
Majority Leader Harry Reid now plans to have two Senate votes on
Saturday regarding the Bush tax cuts. However, neither would extend
them for everybody. The first would essentially agree with the
House’s move to extend the current rates only for families making
less than $250,000 and the second would extend them for people
making less than $1 million. Neither is likely to be able to get
past a Republican filibuster as promised in the GOP Senators’
letter to Harry Reid. Indeed, partly to make a statement, very few
Republicans may even show up for the vote as a filibuster can be
put in place by just one senator. The politics of the situation got
substantially worse for the Democrats on Friday morning with the
release of November’s employment data. The Labor Department
reported an anemic 39,000 new non-farm jobs in November, much lower
than the 155,000 estimate of a survey of economists and the
unemployment rate jumped to 9.8%. To the extent that Americans are
convinced that raising tax rates on “the rich” is bad for job
creation, today’s news was a body-blow to the Democrats’ class
warfare-based tax plans.
