House GOP ignores deficit, approves massive tax break

Updated
Debt clock serves as a memory test
Debt clock serves as a memory test
Photo by Getty Images
Look up literally any legislative debate of the Obama era in which Democrats wanted to make public investments and you’ll find one thing: Republicans screaming about the deficit. America is broke, the argument goes, so we can’t afford job creation, infrastructure, educational opportunities, expanded health care benefits, or really much of anything.
 
We are, GOP officials repeatedly insisted, in the midst of a debt crisis that threatens to destroy civilization as we know it and saddle our children and grandchildren with a crippling burden.
 
And this afternoon we received proof that Republicans didn’t mean a word of it.
The House voted 274-131 on Friday to permanently extend and expand the research and development tax credit that expired at the end of last year.
 
The bill championed by the business community would cost $156 billion over 10 years with no offset…. The research and development credit, which has been extended on a short-term basis roughly 15 times over the last 30 years or so, expired at the end of last year, along with more than 50 other tax breaks.
The full roll call is online here. Note that 212 Republicans – nearly all of whom have railed against the threat of out-of-control deficits – voted for it, as did 62 Democrats.
 
It’s worth emphasizing that there are some nuances to this. The research-and-development tax break, for example, has traditionally enjoyed bipartisan support. There’s a credible case to be made that some of these tax policies serve a legitimate economic purpose and making them permanent is hardly a bad thing.
 
But the point is, Republicans said there’s no need to even try to pay for them. Their bill today came with a $156 billion price tag, and the same folks who scream bloody murder when new spending is added to the deficit effectively argued today that the cost of the tax break should be added to the deficit.
 
In other words, the significance of today’s vote is the degree to which it shreds years of GOP rhetoric about “fiscal responsibility.”
 
If Democrats proposed investing $156 billion over 10 years on economic policies with a proven track record of success, but Dems decided not to bother trying to pay for it, is there any chance at all Republicans would support it? Of course not.
 
And therein lies the point: GOP lawmakers don’t actually worry about the deficit; they only care insofar as the deficit can be used as an excuse to oppose public investments Republicans oppose for ideological reasons.
 
Following up on an item from earlier in the week, Danny Vinik had a good piece on the incoherent justification of the Republicans’ approach.
“We have essentially been allowing an R&D tax credit since 1981 in this country,” House Majority Leader Eric Cantor said on Monday about one of the six tax extenders. “So let’s just call it what it is and make it permanent so that we can get back on the path to growth. Addressing growth, addressing our unfunded liabilities connected with entitlement programs – that is the sure way to reduce deficits and reduce the debt burden.”
 
Read that last sentence again, except imagine Cantor used it in support of extending unemployment insurance instead of a deficit-increasing tax cut. It works perfectly. In fact, because the UI extension is temporary and the Republican tax cut is permanent, it makes even more sense. But that’s not how Cantor sees it.
When there’s a natural disaster and an American community needs emergency aid, Cantor and House Republicans say, “Fine, but Democrats have to find a way to pay for it.” But when there’s a tax break Corporate America likes, Cantor and House Republicans say, “Let’s not worry too much about whether this is paid for.”
 
But it’s the recent fight over extended unemployment benefits that’s especially offensive. In this case, the Senate has already approved a bipartisan compromise on a bill that would cost under $10 billion; the CBO says it will create 200,000 jobs this year; and it’s fully paid for, but House Republicans still won’t even allow a vote.
 
A $156 billion tax break, however, sails through, without being paid for.
 
In this case, the White House has already signaled an intention to veto today’s bill. If House Republicans reconsidered their unyielding opposition to unemployment benefits, I have a hunch President Obama might be willing to give their tax breaks another look.
 

Deficit, Deficit Reduction, Deficits, House Republicans and Tax Policy

House GOP ignores deficit, approves massive tax break

Updated