Politics & Policy

The GOP’s Tax Triumph

Democrats want to preserve most of the Bush tax cuts.

If you started paying attention to politics recently, you’d think that Democrats viewed keeping the middle-class Bush tax cuts as akin in importance to preserving Medicare and Social Security.

Legislation that would preserve the Bush tax cuts for income at $250,000 and below has already passed the Senate, but not the Republican-controlled House, which is trying to get all the tax cuts renewed. Democrats are using this as an excuse to attack Republicans for not caring about the middle class. “It’s unacceptable for some Republicans in Congress to hold middle-class tax cuts hostage simply because they refuse to let tax rates go up on the wealthiest Americans,” said President Obama last week. “House Republicans are trying to hold the bill — and the middle class — hostage to protect the wealthy,” said Democratic Senatorial Campaign Committee chair Patty Murray (Wash.) in an e-mail. The Democratic Congressional Campaign Committee launched a website called GOPHostageTakers.com, which includes a petition saying, “We’ve seen Republicans hold the middle class hostage before — and they’re ready to do it again. After all, Republicans are more concerned about Grover Norquist than the American people.”

But it hasn’t always been that way. When George W. Bush initially proposed cutting tax rates across the board, Democrats vehemently opposed the idea. In 2001, only 12 Democratic senators (out of 48) voted for the Bush tax cuts, while in the House, a mere 28 Democrats (out of 210) voted for it. Two years later, when there was additional legislation that would cut some rates further and accelerate when certain cuts took effect, Democrats were even more resistant: Only two Democratic senators and 7 Democratic House members voted for the cuts. Nancy Pelosi, then House minority leader, issued a statement on the 2003 vote beginning with this line: “This tax cut is a tragedy.”

Then, as now, Democrats’ primary complaint was about the tax cuts going to the rich. But they also showed a real reluctance to cut tax rates for those doing less well, touting instead short-term solutions. Their ostensible concern — don’t laugh too hard — was the growing national debt.

But Tom Daschle (S.D.), then Senate minority leader, also made it clear that he would prefer targeted tax credits, rather than rate cuts. “Why would we put it in those areas of economic viability where you don’t need it?” he told Meet the Press in 2000. “Why don’t we put it where teachers and where people can benefit the most? Why not provide people with a college-tuition tax credit? Why not provide people with more help in paying off their student loans? Why not help people with child care? Those are the kinds of things we’re trying to do, recognizing we can’t do everything for everybody.” Or, more succinctly: Why give Americans some more of their taxes back when we could spend it on yet more programs?

By February 2001, Democrats were flailing around, searching for a plan. The St. Petersburg Times reported that while House minority leader Richard Gephardt was potentially open to reducing tax rates, he was also considering two other ideas: “to provide taxpayers with a one-time dividend or to give taxpayers a rebate on Social Security taxes.” Daschle, the Times wrote, “emphasized that Democrats are in agreement that only one-third of the available budget surplus should be spent on tax cuts,” with the remaining surplus going to reduce the deficit and — surprise, surprise — new spending.

When Democratic alternatives to the Bush tax cuts were introduced, they focused exclusively on tax cuts to the rates of the lower levels of income. For instance, according to Bloomberg News, one Senate Democratic plan involved “applying a new 12 percent marginal tax rate on the first $20,000 of a couple’s income,” while Daschle in March suggested reducing the bottom rate from 15 percent to 10 percent, which would affect “the first $6,000 of taxable income for individuals and $12,000 for married couples.” Cuts at these lower levels wouldn’t affect the rates that middle-class Americans paid on much of their income, the portion that exceeded the $12,000 and $20,000 thresholds.

When the Bush tax cuts did pass, Daschle continued to attack them. In a speech at the beginning of 2002, Daschle decried the tax cuts as responsible for the “most dramatic fiscal deterioration in our nation’s history” and said, “Not only did the tax cut fail to prevent a recession, as its supporters said it would, it probably made the recession worse.”

And in 2003, when Bush pushed for additional tax cuts and an earlier start date for some other cuts approved in the 2001 legislation, Daschle remained opposed. “Long-term, it drives us deeper into debt by borrowing money from the Social Security and Medicare trust fund to pay for this tax cut,” he said. Daschle had another alternative plan that year, reported the Associated Press, one that again centered on the lowest rate and not the overall needs of the middle class, and that preferred targeted tax cuts and government programs to rate decreases:

Senate Democratic Leader Tom Daschle intends to call for $300-per-person income-tax cuts and billions in aid to cash-strapped states as part of an economic-stimulus package designed to clash with President Bush’s recommendations.

Daschle’s proposals also include tax breaks to help small businesses afford health-insurance premiums, and aid for an estimated 1 million jobless individuals who have exhausted their unemployment benefits, according to congressional sources speaking on condition of anonymity.

In the 2004 Democratic primaries, some candidates — including John Kerry and John Edwards — supported keeping the tax cuts for the lower- and middle-income brackets.

The fact that, nine years later, current Democrats are squawking only about the reduction of rates at the $250,000 level and up is a victory for Bush — and for all the Republicans who championed the extensive middle-class tax cuts most Democrats couldn’t abide to vote for at the time.

— Katrina Trinko is an NRO reporter.

Katrina TrinkoKatrina Trinko is a political reporter for National Review. Trinko is also a member of USA TODAY’S Board of Contributors, and her work has been published in various media outlets ...


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