Taxes Pass, Spending Passed Over

The long national nightmare is over.  Overnight the House passed the tax rate and unemployment benefits compromise.  It now heads to the President’s desk for his signature.  The AP has the details:

A massive bipartisan tax package preventing a big New Year’s Day tax hike for millions of Americans is on its way to President Barack Obama for his signature.

The measure would extend tax cuts for families at every income level, renew jobless benefits for the long-term unemployed and enact a new one-year cut in Social Security taxes that would benefit nearly every worker who earns a wage.

In a remarkable show of bipartisanship, the House gave final approval to the measure just before midnight Thursday, overcoming an attempt by rebellious Democrats who wanted to impose a higher estate tax than the one Obama agreed to. The vote was 277-148, with each party contributing an almost identical number of votes in favor (the Democrats, 139 and the Republicans, 138).

This is good.  As much as I would have preferred  a cleaner bill passed by the new GOP House, this is the easiest and least controversial way to keep taxes from going up.  If the House Republicans had waited until January, people’s paychecks would have been smaller, albeit temporarily.  This compromise saves us all from that headache.

Meanwhile, Dems are complaining that this “adds to the deficit.”  Well, technically, if you see lower taxes as a deficit increaser, the logical extension of that logic would lead to 100% tax rates, since any tax rate less than 100% would be adding to the deficit.  And we all know how much the Dems would love to have all our money to spend on their big government social engineering programs.

At around the same time the House passed the tax bill, we got word that Harry Reid will be shelving the trillion-dollar omnibus spending bill, instead working with Republicans on a smaller bill to temporarily fund the government.  As I discussed on Wednesday’s KaibCast, this omnibus spending bill is loaded with wasteful earmarks, but without some sort of spending bill, the federal government will shut down soon.  The way forward is not an omnibus bill, but rather what is called a continuing resolution, which is an appropriations bill that keeps the government funded whenever a formal appropriations bill hasn’t been passed.  This means less spending over a shorter time period, compared to the omnibus bill which is over a trillion dollars and for a longer period.

The Daily Caller‘s Jon Ward has a great report about the recent rejection of the omnibus:

The defeat of a pork-laden $1.1 trillion “omnibus” spending bill in the Senate Thursday night was the first serious indication after the Nov. 2 election that the Tea Party movement has staying power and will be a force into 2011.

Some Republicans on Capitol Hill said Thursday night that GOP leadership played a pivotal role as well. Senate Minority Leader Mitch McConnell was said to have pressured key GOP lawmakers to stand firm against the legislation, though some in leadership said the conference was fairly united against it from the beginning.

What was agreed upon by most is that the same grassroots wave that propelled Republicans to a huge November win had just made its sting felt for the first time in the legislative arena.

“[It was] 100 percent grassroots … The American people took it down,” said John Hart, spokesman for Sen. Tom Coburn, Oklahoma Republican.

Jim Manley, spokesman for Senate Majority Leader Harry Reid, agreed, though with a far less triumphant tone.

“Today’s maneuvers demonstrate that the House and Senate Republican leadership from here on out should be considered a wholly owned subsidiary of the Tea Party,” Manley said.

Brian Darling, who manages Senate relations for the conservative Heritage Foundation, laid success for the big GOP win at the feet of three Republican lawmakers who channeled Tea Party energy and ideals: Sen. Jim DeMint of South Carolina, Sen. John McCain of Arizona, and Coburn.

“But for [them], the Omnibus would have passed,” Darling said, pointing to DeMint’s threat to have the entire bill read on the Senate floor, consuming nearly 40 hours, which was joined by McCain, who emerged Thursday as a high profile and vehement opponent of the bill.

It had been an odd two weeks until Reid, a Nevada Democrat, trudged to the floor late in the day and admitted that he did not have the votes to pass the omnibus, which would have funded the government for the rest of the fiscal year, through September.





Comments Off on Taxes Pass, Spending Passed Over

Filed under Politics, The Economy

Comments are closed.