With only a few days left to go on the 111th Congress’ schedule, what looked like a relatively simple compromise to extend Bush tax cuts and unemployment benefits extensions might turn into a battle royale that extends into next year and the convening of the 112th Congress. According to The Hill, The Tea Party Caucus, headed by Rep. Michelle Bachmann (R-MN), told Sean Hannity on his radio show Monday morning that she didn’t think many Republicans would agree with the tax cuts being tied to a long-term unemployment extension.
“I don’t know that Republicans would necessarily go along with that vote. That would be a very hard vote to take,” Bachmann told the conservative radio show host.
Hours later, President Barack Obama announced a “framework” proposal negotiated by Senate Minority Leader Mitch McConnell (R-KY) and Vice President Joe Biden. The latest move, as laid out by OpenConngress.org, by Democrats to get the unemployment extension legislation reauthorized (for 13 months instead of 3) was tied to a two-year extension of the Bush tax cuts (all of the cuts, as opposed to only the cuts for 97 percent of the lowest income earners, which is what Democrats wanted). A revamped estate tax was thrown in, as well as some business write-off breaks, individual tax credits, and a 2 percent Social Security tax “holiday” for those making less than $107,000.
None of the proposed compromise is offset or paid for via some form of revenue. The total cost to the American taxpayer is estimated to be around $900 billion over the next two years.
And that is where the Tea Party Caucus has drawn the line. Unpaid-for legislation, coupled with unemployment benefits extensions (which many Tea Party members view as counterproductive to rebuilding the economy and getting the jobless back to work), runs contrary to the political movement’s tenets of fiscal responsibility and government responsibility.
“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,” Michelle Bachmann told Hannity. “We cannot add on something like a year of unemployment benefits.”
Many in the Tea Party — not to mention other conservative Republicans and Democrats — find a 13-month unemployment benefits extension irresponsible in that the jobless situation may reverse itself in the coming months. Most supporters — mainly Democrats — believe the longer authorization period is warranted due to extended Federal Reserve forecasts that see the national unemployment rate not falling below 9 percent throughout 2011.
Senator Jim DeMint (R-SC), the only major Republican senator to openly endorse Tea Party candidates during the 2010 midterm elections, voiced reservations. Still favoring making the Bush tax cuts permanent, DeMint told the New York Times he was unsure how he would cast his vote on the proposal.
Former Alaska governor Sarah Palin, long a Tea Party supporter, posted her criticism of the compromise on Twitter Wednesday, choosing to back Sen. DeMint, who she noted was quoted by a conservative commentator, Jebediah Bila, as saying that the GOP could do “better than this.”
And if there wasn’t enough dissatisfaction among conservatives, the compromise is also facing resistance from liberal Democrats as well. Long opposed to the renewal of the Bush tax cuts (predominantly for the 2-3 percent wealthiest income earners), many are displeased with President Obama’s planned compromise to get the unemployment benefits extensions reauthorized at the cost of extending the tax cuts.
Renewing the unemployment benefits extensions, they argue, would cost the American taxpayers $57 billion and add to the national debt through 2011. Renewing the tax cuts will increase the national debt by well over $200 billion.
The battle lines are drawn. It remains to be seen if Michelle Bachmann and the Tea Party can hold the line — with a little help from fellow Republicans and some disgruntled Democrats.
Michael O’Brien, “Bachmann: GOP could scuttle tax deal tied to extending jobless aid,” TheHill.com
Donny Shaw, “What Exactly Is In Obama’s Tax Cut/Unemployment Extension Compromise,” OpenCongress.org