November 24, 2005
Shooting the Tax Santa Claus
WASHINGTON -- The Republican majority in the House of Representatives
got out of Washington last weekend for the long Thanksgiving holiday
without passing a pending tax bill. It was not just the congressional
tendency to put off doing today what can be postponed until tomorrow.
There were not enough Republican votes to pass a quintessentially
Republican tax bill.
are profoundly disturbing. A goodly number of GOP House members
have bought into the Democratic mantra that investment tax cuts,
the backbone of economic recovery, are unfair to ordinary Americans.
Having just narrowly passed a very modest curtailment of federal
spending for the poor, the Republicans flinched at being accused
of passing tax cuts for the rich. The leadership plans to take
up the tax bill when Congress reconvenes in December, guessing
that holiday turkey and relaxation will have ended last week's
supply-side pioneer Jude Wanniski wrote about two governmental
Santa Clauses -- one bestowing spending increases and the other
tax cuts. For 50 years until the supply-side revolution in the
late 1970s, Republicans rejected both Santa Clauses and cemented
their minority political status. It was no small matter last week
that House Republicans looked like they were shooting at the tax
House does on taxes is critical because the bill passed by the
Senate not only shoots at the tax Santa Claus but inflicts a mortal
wound. Capital gains and dividend tax cuts due to end next year
were not extended by the bill, which inflicts what amounts to
an excess profits tax on big oil companies. The House bill crafted
by Ways and Means Committee Chairman Bill Thomas corrects those
deficiencies. He planned to pass his bill in the House last Friday
or Saturday and then prevail in the House-Senate conference on
the bill when Congress returns in December.
that plan in a special closed-door conference of House Republicans
last Friday. But there were plenty of dissenters. They were fatigued,
they said, from a Thursday night session that lasted until 1:41
a.m. to pass what was described as a Draconian spending bill but
actually trimmed only $50 billion in projected increases from
a $2.5 trillion budget. The spending bill passed by 217 to 215
against unanimous Democratic opposition after lacking a majority
the previous week, and the members did not want immediately to
undergo another ordeal.
conference, some of these Republicans told colleagues it would
be bad politics to follow spending cuts for the poor with tax
cuts for the rich. They had bought into Democratic class warfare
while rejecting Thomas's certifiable claims of how middle class
Americans benefit from capital gains and dividends tax reductions.
Republican whip count showed insufficient support to pass the
tax bill, reflecting a decline in discipline in House GOP ranks
since Tom DeLay stepped aside as majority leader. A leaders-only
meeting later Friday confirmed they did not have the votes. Besides,
all attention was on the vote to counter Democratic Rep. John
Murtha's defection from the Iraq war. House consideration of the
tax bill was postponed.
House correction of a Senate-passed tax bill crafted to the desires
of one liberal Republican: Sen. Olympia Snowe of Maine. Her vote
was needed to get the bill out of the Finance Committee, and she
would not give it if the capital gains and dividend provisions
were included. The oil windfall profits taxation was also described
as necessary to secure Snowe's vote.
un-Republican tax bill cannot be blamed entirely on one New England
liberal. The Finance Committee chairman, Sen. Charles Grassley,
came to Congress as an Iowa conservative and still talks a good
conservative game. But Republican colleagues call him a prairie
populist who was a willing co-conspirator with Snowe bashing big
oil. His Senate bill is described by supply-siders as filled with
"tax pork" enriching special interests.
now count on Bill Thomas, a master legislator but never a conservative
favorite. When Congress returns, he has to get his bill through
the House and then prevail over a stubborn Grassley in the conference
committee in order to keep the tax Santa Claus alive.
I erred in a recent by column by reporting that April Foley, President
Bush's choice for Export-Import Bank president, was never a corporate
or government executive. She was Export-Import Bank first vice
president from Dec. 15, 2003, to July 20, 2005.
2005 Creators Syndicate