The last shriek?
U.S. House Democrats say the White House’s tax compromise with Republicans is a bridge too far for them. On Thursday the Democratic caucus held a non-binding vote rejecting President Obama’s tax deal that would keep income tax rates where they’ve been for the better part of the past decade. The deal also would temporarily lower the payroll tax and extend unemployment benefits. The last shriek of a House Democratic majority that’s about to go poof, or a rallying cry for progressives and liberals throughout the land? If taxes go up on all Americans in January, the backwash against Democrats might be fearful. “A clear majority of the U.S. House of Representatives supports this plan,” Rep. Dan Boren, D-Muskogee, said in a statement. “We are allowing the liberal wing of the Democratic caucus to hold these critically needed tax cuts hostage.” Maybe, but not for long. Even if Speaker Nancy Pelosi and her loyalists fight it out on last stand hill, you’ve got to think the new Republican majority’s first agenda item will be taxes.
Mr. Rogers’ neighborhood
The incoming chairman of the U.S. House Appropriations Committee is … Rep. Harold Rogers, R-Ky. Rogers is the pick of the Republican steering committee over Rep. Jerry Lewis of California in a contest between two veteran appropriators. The full GOP caucus was scheduled to vote on all chairmen Wednesday. Rep. Jack Kingston of Georgia was favored for appropriations by tea party groups, but really, it was Rogers vs. Lewis — who would’ve needed a waiver of GOP term-limit rules on committee chairmen to take the gavel. In terms of the recent elections, neither Rogers nor Lewis looks especially responsive to the anti-Washington, anti-spending wave that rolled through in last month’s elections. Both are Beltway insiders, and cynics have a point when they say each has piled up so many earmarks during their careers that entrusting either with the helm of the House’s chief spending committee looks dubious — that is, if the idea is to cut federal spending. Rogers has said he got the message on spending from the mid-terms. We’ll see.
Just sayin’ no
OK, so this is a little “inside baseball” for most non-Inside-the-Beltway readers, but a House vote Wednesday showed how potent the tax issue is heading into the November elections. Thirty-nine Democrats voted against a leadership-supported adjournment resolution that would excuse the chamber this week without taking up an extension of Bush-era tax cuts, which are set to expire at the end of the year. House leaders quickly gaveled the roll-call vote to an end once the resolution nosed ahead 210-209. Fourteen members (including Rep. Mary Fallin, R-Oklahoma City) didn’t vote. Most of the Democrat no votes were from members locked in tough re-election races, moderate or “Blue Dog” Democrats trying to distance themselves from Speaker Nancy Pelosi. Republicans (and, evidently, more than three dozen Democrats) think Congress should act on the tax-cut extension before the mid-term elections. Pelosi and her lieutenants see adjournment without action as the best way to skirt the issue. It’ll be interesting to see how many of those voting no this week survive November.
He said, he said
It’s a little “inside baseball,” but there’s been an interesting discussion on the blogosphere this week, the crux of which is whether columnist Paul Krugman of The New York Times did a submarine job on U.S. Rep. Paul Ryan’s fairly innovative plan to reform health care and the entitlements, including Social Security and Medicare. Krugman handled Ryan pretty roughly in a recent column, accusing the Wisconsin Republican of fraud because he didn’t have the Congressional Budget Office analyze revenue losses from his plan’s proposed tax cuts, thereby making the plan look better.
But CBO doesn’t analyze or “score” tax repercussions in proposed legislation. That’s the jealously guarded domain of the Joint Committee on Taxation. As a result, Krugman has been catching flak for not appearing to understand the different roles played by CBO and JCT, which might have had a bearing on whether he accused Ryan of hawking snake oil. As it turns out, JCT was too busy to score Ryan’s plan earlier this year and even if it did would only produce a 10-year estimate. Too short a horizon, Ryan says, for a 75-year plan. In a blog post Krugman countered that Ryan “gamed” the revenue loss analysis and could have had one if he really wanted it. <Sigh.>
Soak the rich
What is it with Democrats and capitalism? They sound like they don’t understand or like America’s economic system, as though the free market is infected with cooties. From there they argue raising taxes on people who own small businesses (and create most of the new jobs in this country) is sound policy and besides, they can afford it. U.S. Rep. Joseph Crowley, D-N.Y., was on “Hardball” with MSNBC’s Chris Matthews, talking about how wealthier Americans should pay more in taxes simply for living in such a wonderful country. Yes, it is a wonderful land, but how is that a reason for one group of people to pay a higher tax rate than others? Other Dems say similar things — the rich won’t miss the extra they pay in taxes, they’ve been luckier than everyone else and should pay more, etc.
On another show Democratic Whip Chris Van Hollen basically argued keeping taxes lower (vs. higher) for top income earners doesn’t foster economic growth. Just look at the recession at the end of the Bush years, Van Hollen said. Tax cuts didn’t stop that downturn. Of course, Van Hollen omits mention of the cost of two wars, the burst of the housing bubble and high spending (first by Republicans and then Democrats) — all of which is quite a tide to be neutralized by folks in the 35 percent (39.6 percent if the Democrats get their way).
Lebron’s taxing decision
Lebron said it was about getting rings, and without question winning championships is a big reason the NBA’s biggest star — a member of the panoply of first-name-only stars that includes Michael, Shaq, Larry and Magic — is leaving Cleveland for Miami. James said he wants to win, and it appears the Heat is poised to do so with him, Chris Bosh and Dwayne Wade in the fold for next season. But it’s always about the money, too. And while there’s lots of comment about the $4 million Lebron reportedly left on the table by spurning Cleveland’s best offer, a closer look proves appearances are deceiving. Various sources note Lebron will save between $4 million and $5 million in taxes, because Miami doesn’t have Cleveland’s city tax and Florida doesn’t have Ohio’s income tax. Good for Lebron. The teaching point is that a superstar’s exit underscores how individuals and businesses often decide where to base themselves. Shall we locate in State “A” with city and state taxes, or State “B” with no taxes? No need for instant replay to make that call.
Bites the dust
For those keeping score at home, U.S. Rep. Alan Mollohan, D-W.Va., has become the first House incumbent voted out of office, beaten in Tuesday’s primary by a state senator who questioned Mollohan’s ethics and his vote for Obamacare. Running as a conservative Democrat, Michael Oliverio got 56 percent of the vote to Mollohan’s 44 percent. He’ll face former state Republican chairman David McKinley this fall. McKinley said Mollohan’s defeat was a referendum on President Barack Obama. “People just didn’t like what was happening in Washington,” McKinley said. “It’s clear this is not the agenda they wanted. This wasn’t the change they envisioned.” Coupled with Republican Sen. Robert Bennett’s defeat in Utah’s primary, the heavy gale warnings clearly are up for incumbents — especially those associated with big spending and big government.
Obey out
Among Democrats electing not to seek re-election this fall, U.S. Rep. David Obey certainly is in the first rank. Obey, powerful chairman of the Appropriations Committee, announced Wednesday he’s retiring after 41 years representing Wisconsin’s 7th District. Born in Okmulgee, Obey was just 30 when first elected. He said he is “bone tired” and believed it was his time to step down. There was speculation Republican Sean Duffy’s gathering campaign, in what looks to be a GOP year, had something to do with Obey’s decision. The Washington Post reports Obey had $1.4 million in his campaign chest at the end of March, and incumbents with that kind of dough don’t often leave of their own accord. Besides running Appropriations, Obey is best known as a prickly character, having loud dust-ups on Capitol Hill with Republicans and Democrats alike. His retirement is a big loss for Democrats, even if another Democrat fills his seat. Obey’s experience, mostly as a big spender, won’t be easily replaced.
Obama’s slip shows again
Maybe President Barack Obama was ad-libbing from his teleprompter recently when he ventured onto the shaky economic/ideological soil of wealth redistribution during remarks at a rally in Illinois. What Obama said had sort of an off-the-cuff whiff to it. Touting financial reforms being debated in Congress, the president said his administration isn’t pushing new regulations “because we begrudge success that’s fairly earned.” Then came the Freudian quip: “I mean, I do think at a certain point you’ve made enough money.” Ah, yes! And conservatives everywhere are thinking Obama would be fine with the federal government telling Americans where that certain point is. Conservatives may be paranoid (or just think they’re paranoid), but Democrats keep saying things like that: Obama’s exchange with Joe the Plumber during Campaign 2008, a congressman talking about tax increases on the wealthy because “they won’t miss” the money, Dick Gephardt infamously musing years ago that the rich were merely the beneficiaries of “life’s lottery.” Karl Marx would be proud. Seriously, Democrats don’t hate wealth. Without it they’d have nothing to spread around.
Survey says …
When President Barack Obama and his Democratic allies in Congress were crafting last year’s $787 billion stimulus bill, conservative historian/economist Bruce Bartlett produced a chart for The New York Times with historic economic data showing that federal stimulus packages almost always come too late to affect the downturn for which they’re targeted. Usually, the economy already is recovering — on its own — by the time stimulus legislation is enacted. Will the same be true for Stimulus ’09? A new survey of economists shows most of them think the 2009 stimulus has had no impact on the recovery that seems to be under way. The National Association for Business Economics polled 68 of its members who work in private-sector firms. About 73 percent said employment at their company is neither higher nor lower because of the stimulus. Likewise, they say a new $17.7 billion jobs bill won’t affect payrolls. Looks like bad money after bad — or maybe an extremely early jump on the next recession.
