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Wednesday, December 15, 2010

GOP Leaders vs Obama's Earmarked, Omnibus Spending Tax Bill: Chicago Politics

Attacks From Right Take Toll On Obama's Tax Plan

A growing chorus of conservative criticism is prompting some House members to rethink the $850 billion package of tax cuts and extended jobless benefits that President Barack Obama negotiated with top Republicans in Congress.

The attacks are unlikely to derail the measure, which gets a final vote Wednesday in the Senate, to be followed by a debate and vote in the House. But they underscore the difficulty of building centrist coalitions after an election in which tea party conservatives ousted many Democrats and some veteran Republicans who were seen as too willing to compromise with opponents.

Conservative talk show host Rush Limbaugh, GOP presidential hopeful Mitt Romney and the Tea Party Patriots have denounced the tax plan, which previously was criticized mainly by liberals as a giveaway to the wealthy. The new reproach from conservatives is that the package would swell the federal debt while failing to make permanent the tax cuts enacted in 2001 and 2003 by then-President George W. Bush.

Congressional insiders still predict the tax plan will pass in some form before Jan. 1, when almost every American's income tax rates would go up if a new law isn't in place. But House passage this week seems a bit less certain than before, and Obama's supporters are watching anxiously to see how many opponents on the right will join those on the left.

"The longer we wait, the harder it's going to be," said Rep. Jack Kingston, a Georgia Republican who is leaning against the package. He said House leaders probably are close to assembling enough support to pass it, but many GOP lawmakers are hearing from constituents who follow commentators such as Limbaugh.

The radio talk show host says the package should cut taxes, not leave them at the Bush-era levels.

The group Tea Party Patriots also urges the tax package's defeat. The legislation was crafted in secret, the group's petition says, and it fails to kill the estate tax, a goal of many hard-right groups.

But other tea party groups, including Freedomworks, support the tax compromise. Freedomworks, headed by former House Republican Dick Armey, says conservatives should be pleased to see the Bush tax cuts extended for another two years when Democrats still control Congress and the White House.

The tax cut debate is splitting Republicans at several levels. Presidential hopeful Mitt Romney criticized the plan Tuesday in a column for USA Today.

"Given the unambiguous message that the American people sent to Washington in November," Romney wrote, "it is difficult to understand how our political leaders could have reached such a disappointing agreement." It will add nearly $1 trillion to the national debt, he said, "when we are already drowning in red ink."

Another possible presidential contender, Sen. John Thune, R-S.D., defended the tax measure in a Senate speech Tuesday. To oppose it, he said, "is to advocate for a tax increase," because a congressional impasse would allow all the Bush-era tax cuts to expire as scheduled on Jan. 1.

A new, more Republican Congress would probably restore them next year retroactive to Jan. 1, but workers might still see smaller paychecks for weeks or months because of higher withholdings reflecting the higher pre-Bush tax rates and smaller credits and deductions for children, college tuition and other expenses.

The Obama-backed plan would extend all those tax cuts, for rich and poor alike, for two years. It would trim Social Security payroll taxes and extend unemployment benefits for a year. It also would continue a number of tax breaks for business investments.

The plan restores the estate tax at a lower level -- 35 percent and exempting the first $5 million -- than many Democrats want. House Democratic leaders are weighing efforts to increase the rate to 45 percent and exempt only the first $3.5 million when the measure reaches their chamber.

Senate GOP leader Mitch McConnell, who negotiated the tax package with the White House, warned Tuesday that it is "not subject to being reopened."

House staffers in both parties say no firm count of likely votes for the tax measure has been taken. One top Democratic aide guessed that perhaps 100 Democrats would support the measure. That would require Republicans to provide more than half the votes to reach the 218 needed for passage.

Conservative groups opposing the tax measure include the Club for Growth. Other influential critics include Republican Reps. Michele Bachmann of Minnesota, a tea party favorite; Jeff Flake of Arizona, a prominent critic of pork barrel spending; and John Campbell of California, a certified public accountant.

Conservative columnist Charles Krauthammer wrote a widely discussed article last week saying Obama's plan would be a political coup for his 2012 re-election hopes, because the expensive package would stimulate the economy enough to bring down unemployment.

Prominent conservative supporters of the tax package include House Republican leader John Boehner of Ohio, Rep. Paul Ryan, R-Wis., and Americans for Tax Reform.

Boehner, who will become House speaker when the new Congress convenes next month, would suffer a big setback if the tax package fails. The criticism from the right clearly makes him and his allies nervous.

Boehner told CBS' "60 Minutes" that he refuses to say he compromised with the White House, preferring to say they found "common ground."

On tax and spending questions, House Republicans "are on a pretty short leash," Boehner said. "If we don't deliver what the American people are demanding, they'll throw us out of here in a heartbeat."

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Revolt: Republicans Angry About Omnibus Spending Bill Decry 'Total Mess'

Republicans poring over a 1,924-page overarching spending bill proposed by Democrats to cover the rest of the fiscal year are threatening to grind the legislation to a halt, citing massive earmark spending, which, if passed, would be enacted into law without debate in the full Senate.

Two sources who spoke to Fox News are describing the legislation as "a total mess."

But the head of the Senate Appropriations Committee, Sen. Daniel Inouye, D-Hawaii, said he believes the legislation must pass.

"The twelve bills included in this package fulfill the Congress' most basic responsibility, to exercise the power of the purse," he said in a statement. "This measure reflects a year's worth of work by members of both parties. Together, we have closely scrutinized the president's budget request, held hundreds of hearings, thousands of meetings, and asked literally tens of thousands of questions to each and every federal department and agency seeking justification for how taxpayer dollars are being spent."

Sen. John Cornyn, R-Texas, responded in a statement, saying that after neglecting to pass a budget, "today we learn Senate Democrats now want to sandwich them together, totaling almost 2,000 pages, and jam them through in the waning moments of this lame duck session before anyone can read them. This political end-around reveals just how quickly my colleagues across the aisle have already forgotten the voters' message in November."

Though none of the spending bills has passed the Senate, all the individual appropriations bills have been through the full committee process. In an afternoon release, the Appropriations Committee website listed all of the requested earmarks, winnowed into separate categories that go into making up the 12 separate annual spending bills.

In total, thousands of earmark requests are listed. The financial services earmark chart, for instance, lists 220 earmark requests from dozens of lawmakers, mostly in the House, each worth anywhere from $50,000 to $2.4 million. The largest sum was requested by Inouye and his Hawaii colleague Sen. Daniel Akaka for "Bank on USA" demonstration projects" in their state. The projects are designed to give underserved communities greater access to financial institutions.

Elsewhere, the Department of Defense earmark list, mostly requests by senators, is 29 pages long and individual requests more often are worth $2 million to $5 million each. In that list, Inouye's requests total more than $159 million, including $21 million for a Hawaii Federal Health Care Network. Cornyn's defense spending earmarks total nearly $16 million.

The list was released after a Republican policy lunch that a source said was devolving into pandemonium.

"All hell is breaking loose," the source told Fox News, noting that Sens. Tom Coburn of Oklahoma and Jim DeMint of South Carolina were expected to insist the omnibus bill be read in its entirety by the clerk on the Senate floor before a vote is held. They also were expected to seek debate on all earmarks and any amendments.

If the clerk follows the pace of last year's reading of the health care bill -- 53 pages an hour -- it will take almost 40 hours to read the omnibus bill.

A spokesman for Senate Republican leader Mitch McConnell of Kentucky responded that "all hell is not breaking loose just yet. But I'm sure there will be a robust conversation."

In a news conference, McConnell compared the omnibus bill to the health care legislation last year, calling it a big bill arriving amid cold weather and no one knowing exactly what's in it.

On top of Republican angst, Sen. Claire McCaskill, D-Mo., also is revolting against the Democratic-sponsored bill, saying she will not support an omnibus spending bill unless it includes an amendment proposed by McCaskill and Sen. Jeff Sessions, R-Ala., that calls for a three-year cap in discretionary spending. Democratic leaders told McCaskill on Monday that they would meet a one-year gap, which she rejected, according to sources familiar with the conversations.

But sources said Inouye was confident he had the votes needed to get the legislation passed and sent to the House.

The fiscal year runs from Oct. 1-Sept. 30. Currently, a continuing resolution, the stopgap measure to keep government operational until a budget is passed, is set to expire on Saturday. If another CR or the bill itself isn't passed and signed into law by President Obama by then, the government will shut down.

On the House side, Republican leader John Boehner is apparently warning that if the Senate sends over the bill as it is, "We will work to kill it." House Democrats had hoped to file a year-long CR at the previous year's rates.

Opponents of the package are finding support among conservative groups who describe the legislation as a Democratic attempt to lock in 2010's $3.5 trillion budget for the next year without allowing any spending cuts.

"Despite the dire fiscal crisis the nation faces, with a $13.8 trillion national debt that cannot be paid, and in spite of the American people who are demanding action to cut spending, Congress is busy voting to kick the can for yet another year. A vote for the continuing resolution is a vote for another trillion dollar-plus deficit, and that is simply unacceptable to all Americans. Any politician in Congress that has ever promised to reduce the deficit should vote 'no' on this continuing resolution," Americans for Limited Government President Bill Wilson said in a statement Tuesday.

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Earmarks Used To Lure Support For Tax-Cut Bill

In the spirit of the holiday season, President Barack Obama's tax-cut deal with Republicans is becoming a Christmas tree tinseled with gifts for lobbyists and lawmakers.

There are ethanol subsidies for rural folks, commuter tax breaks for their cousins in the cities and suburbs, wind and solar grants for the environmentalists - all aimed at winning votes, particularly from reluctant Democrats.

The holiday additions are being hung on the big bill that was Congress' main reason for spending December in Washington, long after the elections that will give Republicans new power in January. The measure will extend Bush-era tax cuts, averting big tax increases for nearly all Americans, and keep jobless benefits flowing.

Republicans generally liked that agreement, worked out by Obama and GOP leaders. Democrats generally didn't, hence the add-ons.

It's expected to come to a decisive vote next week, at a total cost by the latest congressional estimate of $857.8 billion.

Almost $5 billion in subsidies for corn-based ethanol and a continuing tariff to protect against ethanol imports were wrapped up and placed on the tree Thursday night for farm-state lawmakers and agribusiness lobbyists. Environmentalists won more grants for developers of renewable energy, like wind and solar.

For urban lawmakers, there's a continuation of about-to-expire tax breaks that could save commuters who use mass transit about $1,000 a year.

Other popular tax provisions aimed at increasing production of hybrid automobiles, biodiesel fuel, coal and energy-efficient household appliances would be extended through the end of 2011 under the new add-ons.

The package also includes an extension of two Gulf Coast tax-incentive programs enacted after Hurricane Katrina to spur economic development in Mississippi, Louisiana and Alabama.

While the add-ons may have won more votes for the Obama-GOP deal in the Senate, their potential impact is less clear in the House, where Democrats have criticized the package as a tax giveaway to the rich.

There's the possibility the added goodies will have opposite the intended effect for some lawmakers. Rep. Jeff Flake, R-Ariz., said the add-ons could turn his fiscally conservative colleagues against the bill.

"You don't want to be accused out there of supporting stimulus three," he said. "It will knock some votes off in the House, but more than anything, it will show the voters out there that things haven't changed with Republicans."

Sources: AZ Central, CNN, Fox News, MSNBC

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