There is No Tax Deal

On Wednesday, Vice President Joe Biden reportedly told House Democrats that the tax deal cut
with Republicans was a “take it or leave it [1]” proposition that could not be changed. But by
last night, after fierce opposition from his leftist base, President Barack Obama was singing
a different tune, telling NPR [2]: “My sense is there are going to be discussions between both
House and Senate leadership about all the final elements of the package. Keep in mind we didn’t
actually write a bill.”

Well now Senate Majority Leader Harry Reid (D–NV) has submitted a bill, and it is clear that
negotiations are still very much open … at least for the left. Politico reports that in order
to buy the votes of Senators Maria Cantwell (D–WA) and Barbara Boxer (D–CA) [3], Reid added
cash subsidies for wind and solar corporations that were originally part of Obama’s first
failed stimulus [4]. And Senator Tom Harkin (D–IA) was also able to trade his vote for more
ethanol subsidies. Other “sweeteners” added to buy leftist Senate votes include subsidies
for energy-efficient appliances and mass-transit benefits for employees.

And the legislation can only get worse. Yesterday House Democrats voted to oppose the Obama
tax deal, with Speaker Nancy Pelosi (D–CA) telling Politico [5]: “In the caucus today, House
Democrats supported a resolution to reject the Senate Republican tax provisions as currently
written. We will continue discussions with the president and our Democratic and Republican
colleagues in the days ahead to improve the proposal before it comes to the House floor for
a vote.” And by “improve the proposal,” Speaker Pelosi can only mean higher taxes and higher

The deal originally cut by Republicans had some good economic policy in it, but it also had
a lot of harmful provisions. The temporary two-year nature of the arrangement did not provide
the long-term certainty that businesses need to make long-term investment plans that create
substantial economic growth and jobs. Allowing the death tax to return, even at a lower rate,
did not give small businesses the relief that a permanent repeal would provide. Finally, the
original deal provided a costly $57 billion 13-month extension of unemployment benefits that
was not paid for. This extraneous spending should have been stripped out of what should be a
clean tax bill; instead, the left is only adding more spending and subsidies into it.

This fall, President Obama campaigned around the country promising to raise taxes on America’s
job creators. By contrast, conservatives across the country campaigned on promises not to allow
the left to raise taxes on anyone on January 1st. The American people chose the conservative
position in what even President Obama himself described as a “shellacking.” The tax bill
introduced by Reid is not what conservatives promised they would fight for during the elections.
And the legislation will only get worse as more and more liberal votes are bought off with
more and more deficit spending. Taxes should not be raised on the American people. Congress
and the President would do well by the American people to jettison all the other side issues
from this debate and focus first and foremost on preventing tax hikes.

By Conn Carroll; The Foundry,
The Heritage Foundation

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