Are Conservatives Overreaching In Tax Deal Opposition?

UPDATE: Gallup reports that 66 percent of Americans support both the extension of all of the Bush tax rates and the extension of unemployment benefits. A little more evidence that it’s just plain bad politics to oppose this thing.

Lost in the reporting of the Left’s apoplexy over President Obama’s cave-in to GOP demands to extend the Bush tax cuts for all Americans is the fact that several key conservatives in the House and Senate have rejected the deal as well.

Said Sen. Jim DeMint (R-SC) was on Hugh Hewitt’s radio program today and spelled out his opposition. Hewitt describes DeMint’s position:

Senator Jim DeMint just announced on my program that he will oppose the deal as well as a vote for cloture on the deal.  He is reluctant to criticize GOP Senate leadership, but believes the deal at a minimum has to be paid for, and that we need “a permanent economy” not a temporary one as well as permanent tax cuts, not temporary tax cuts.

Hewitt himself is no fan of the deal. His daily e-mail blast included this:

Calls, emails and tweets running overwhelmingly against so-called compromise.  Consensus: Why did we work so hard for so little?  A squandering of momentum and good will, energy and the opportunity to make the case for stable, low tax rates as the key to economic growth as well as the immorality of the death tax.  GOP presidential candidates should denounce the deal.

The Club For Growth gives the deal a thumbs-down:

“This is bad policy, bad politics, and a bad deal for the American people,” said Club President Chris Chocola.  “The plan would resurrect the Death Tax, grow government, blow a hole in the deficit with unpaid-for spending, and do so without providing the permanent relief and security our economy needs to finally start hiring and growing again.”

And Rep. Michelle Bachmann rejects it as well. This from Bachmann’s appearance on Sean Hannity’s radio show Monday:

“I don’t know that Republicans would necessarily go along with that vote. That would be a very hard vote to take.”

“I think we’re back in a conundrum. I think the compromise would be extending the rates for two years and not permanently, but not tying it to massive spending,” she said. “We cannot add on something like a year of unemployment benefits.”

Redstate.com’s Erick Erickson is no more sanguine in his assessment of the deal:

Ultimately though, this is a compromise that leaves both sides coming up short and is full of compromising the GOP did not have to engage in, even without controlling the Senate. They could have gotten more. We will also continue subsidizing unemployment — yes you read that right. At some point it becomes welfare, not unemployment compensation.

The compromise does little to stem the tide of uncertainty that has kept businesses from hiring. Because the fight will be wrapped up in the politics of 2012, small businesses that have been keeping money on the sidelines will keep doing so. Any politician who says this has anything to do with job creation will largely be lying.

There are other conservatives assailing the deal, largely for reasons mirroring those given in the above verdicts. The unemployment benefits extension and the two percent payroll tax cut for next year haven’t met with particular appreciation. The temporary nature of the deal is also a loser with the punditocracy on the Right.

This was inevitable, but nevertheless unfortunate. While the electoral revolution of Nov. 2 has clearly changed the game in Washington, the new day has not yet dawned. Republicans don’t control the House and still hold just 42 seats in the Senate. They don’t yet have the strength to dictate legislation to the President.

And what’s more, despite not yet having the power to dictate the tax policy the voters of Nov. 2 clearly demonstrated they want the GOP is in a position to be blamed for a triple whammy by the Democrats and the legacy media if not for this deal. They’ll be heartless and cruel for letting unemployment benefits expire. They’ll be incompetent and intransigent for blowing a chance to keep taxes the same for the average Joe out of some fetish for rich people. And they’ll have contributed to a steep drop in the stock market for not having managed to preserve capital gains rates.

All of these criticisms would be unfair, of course. But they’d constitute a month-long drumbeat over the holidays, and local TV news crews would cover the airwaves with stories of destitute unemployed for the holidays and regular folks screaming that a tax increase next year will kill their ability to make ends meet. And though there is ample blame to lay on Obama and his House and Senate minions, who after all had two years to address this issue with unchallenged power to shape tax policy, it won’t play that way. This will be the GOP’s fault and it will be an indictment of the party. It will be used by the Democrats for two years as a reason why a Republican president and Senate majority are a bad idea.

This deal averts those problems, and conservatives should hold their fire and support it. At least until the new Congress is seated next month.

Are there problems with the deal? Of course there are. No deal made with Barack Obama is going to be wholly palatable. Dealing with Obama himself isn’t palatable; his immature and petulant behavior at today’s press conference, in which he likened the Republican Party to hostage-takers, was evidence enough that on the whole this is a man to bludgeon into submission rather than make common cause with.

But the objections to the deal are more pro-forma than substantive. None of the items the critics are complaining about do any irreparable harm, and all can be fixed in short order so long as the GOP keeps winning elections.

Perhaps the least meritorious complaint about the deal is that the tax rates aren’t permanent. The lament goes that without making the tax rates permanent, businesses and entrepreneurs will not be able to do the forecasting necessary to facilitate business expansion and job creation.

OK, fair enough. But ask yourself this question: do the Bush tax rates represent your endgame on tax policy? It’s difficult to make the case that a corporate tax rate which ranks second-highest among the world’s developed economy and a tax code tens of thousands of pages long in which some 47 percent of the public doesn’t even pay income taxes represents something we should want to make permanent. Real progress doesn’t come from preserving this system, it comes from a flat tax at rates far lower than current levels.

We all know that’s not an achievable aim while Obama is the president and Harry Reid is the Senate majority leader. The earliest that the tax code could realistically be improved is January of 2013. And it just so happens that the election which would remove Obama and Reid from their current positions is going to be just as heavily influenced by economic policy – a.k.a., taxes – as the one just concluded.

So it’s definitely not a bad thing politically for the GOP or conservatives to have tax policy on the table for 2012. It’s an even better thing if the choice isn’t between keeping things as they are and moving toward a flat tax, for example. If the economy is out of the doldrums by then a flat tax will be considered risky and unnecessary. And if the economy doesn’t improve, while that might prepare the ground for a major change to the tax code it’s still preferable to have a draconian alternative for voters to turn down in supporting a better system.

DeMint’s main objection appears to be on deficit grounds, and in that he’s joined by a Republican Senator who is most certainly not a conservative – George Voinovich. The deficit objections fall chiefly on the payroll tax cut and unemployment benefit extensions – DeMint says spending cuts have to accompany those elements or it’s a loser.

And he’s right, of course. But the idea that the GOP is going to make some Grand Bargain with Obama which fixes all the world’s problems is a foolhardy one. With this guy you’ve got to get what you can when you can. There will be lots of time in January to ram spending cuts down the president’s throat, and lots of new Republicans in Congress dedicated to doing just that. The time is coming when the federal fisc is getting a haircut, but that time won’t come while Nancy Pelosi is still Speaker of the House.



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