House Republicans haven’t had much success this Congress passing actual legislation into law, but they’ve nevertheless invested quite a bit of time focusing on one of their favorite pastimes: cutting taxes without paying for it.
The Democratic-run Senate has largely ignored the bills from the lower chamber, but in recent weeks, House Republicans and Senate Majority Leader Harry Reid’s (D-Nev.) have been negotiating a deal on tax breaks set to expire at the end of 2014, and yesterday, a deal took shape. Before we get to the substantive details, it’s important to note how GOP lawmakers approached the talks:
Left off were the two tax breaks valued most by liberal Democrats: a permanently expanded earned-income credit and a child tax credit for the working poor. Friday night, Republican negotiators announced they would exclude those measures as payback for the president’s executive order on immigration, saying a surge of newly legalized workers would claim the credit, tax aides from both parties said.
We really have reached a farcical level of policymaking. Republicans aren’t just obsessed with tax cuts, they’re deliberately scrapping breaks that go to working families. Why? Largely because GOP officials aren’t done with their tantrum over immigration policy – right-wing hissy fits rarely produce sound public policy – and Republicans feel as if they’re entitled to a pound of flesh because the Big Bad President hurt their feelings.
The result is a tax deal that treats the working poor as collateral damage in a political war. Sorry, struggling families, Americans elected a far-right Congress, and your loss is their “payback.”
And as important as this is, it’s not even the most offensive part of the agreement on taxes that came together yesterday.
At issue is a package of 55 tax breaks worth $440 billion over the next decade, nearly all of which benefit corporations, which are already enjoying record profits. Danny Vinik described the agreement as an example of “everything that’s wrong with Washington.”
Imagine somebody asked you to imagine the worst possible deal on taxes. It’d probably have the following qualities:It would be bad for the environment.It would be bad for the deficit.It would give short shrift to the working poor.And it would be a bonanza for corporations.Unfortunately, you don’t have to conjure up such a package. Congressional Republicans already have.
This may sound like an exaggeration. It’s not. Indeed, perhaps the single most striking aspect of this is that Republicans intend to pay for the tax breaks entirely through deficit financing. After all the talk from GOP lawmakers about killing our grandchildren with mountains of debt, all the rhetoric about how “broke” the United States is, all the claims that we can’t invest in job creation or even jobless benefits unless every penny is offset, we’ve received another reminder that Republican talk about fiscal policy is a rather pathetic and insincere joke.
The Center on Budget and Policy Priorities published a fairly detailed, albeit understated, analysis of the tax deal, calling it “a significant step backward on several key issues facing the nation: long-term budget deficits, high levels of poverty (especially among children), and widening inequality.”
And what about the provision in the deal that’s bad for the environment? At Republicans’ request, the package does not extend the wind-power tax credit – GOP lawmakers said it wasn’t fair to the oil and gas industry, so it had to go.
Given all of this, President Obama has vowed to veto the agreement. I talked to a handful of Democratic aides on Capitol Hill overnight, and each said the package would enjoy very little Dem support in its current form.
The obvious question, aside from why Republicans are so incredibly reckless and irresponsible when it comes to tax breaks for corporations that don’t need them, is why Harry Reid’s office would agree to such a far-right agreement. The Nevada Democrat and his team have been involved in plenty of bipartisan compromises, and they know their way around a negotiating table, so why accept such a ridiculous deal?
Reid’s office hasn’t said much publicly – and with an Obama veto now inevitable, it may be a moot point – but apparently House Republicans were quite inflexible during the talks and this was the best result Democratic aides thought they could get before the GOP takeover of Congress is complete.
What’s more, some of the existing 55 tax breaks, sometimes called “tax extenders,” actually have merit and progressive support. For Republican negotiators, the message was, in effect, “The only way to keep these breaks is to give us more of what we want.”