Taxes & Spending

Conservatives’ Opposition To Tax Cut Compromise

In what may be a preview of the impending battles within the Republican Party during the next session of Congress, many influential conservatives, for political, strategic, or self-interested reasons, voiced strong opposition against the Tax Relief Act, which passed with bipartisan support in the Senate on Tuesday. Eighty-one Senators supported the measure while 19 opposed. The bill now must pass the House this week.

On his radio show on Dec.10, Rush Limbaugh said he hoped the “deal fails” because it would  be good politics to block the compromise and let Democrats take the blame for being in charge while taxes went up. Limbaugh also suggested that conservatives should also be opposed to the deal because when Republicans have more members in the next Congress, they would be in a better position to get a better deal, such as making the tax rates permanent instead of just extending it for two years.

“The new Congress will fix it, if the GOP leadership will allow it … let the rates go up, and wait for our cavalry to show up,” Limbaugh said, before adding again that he hoped the “deal fails.”

On Dec. 6, conservative talk radio host Mark Levin opposed the deal for another reason — he told his listeners that though he wanted to like the tax compromise, “I don’t like this deal” because it just represents the status quo. “We’re supposed to cheer for the status quo?” Levin asked.  “Republicans were able to hold onto the status quo, the current tax rate, and only for two years, and Democrats got tax raises.”

And the fiscally conservative Club For Growth, which aligned itself with many Tea Party candidates during the midterm elections, opposed the deal because, in the words of Club President Chris Chocola, “This is bad policy, bad politics, and a bad deal for the American people. 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.”

Chocola proposed that “instead, Congress should pass a permanent extension of current rates, including a permanent repeal of the death tax, and drop all new spending.”

Emboldened by the historic midterm elections in which the Tea Party forces exerted great influence and mindful of the way in which Republicans lost their way in the last decade on fiscal issues, which arguably culminated in the election of Barack Obama, leading conservative figures felt they had to take a stand against anything that could align Republicans with the Beltway and wreak of frivolous deficit spending.

The Republican leadership, though, led in part by Minority Leader Mitch McConnell (R-Ky.), who was the GOP’s point man in negotiations, felt Republicans had to make a deal to ensure that income tax rates would not be raised across all income brackets for individuals and to prevent increases on taxes on small business and estates. The deal also provides a two-year fix on the alternative minimum tax and blocks higher taxes on capital gains and dividends.

Republican leaders felt it would be a risky strategy to potentially increase taxes on the American people while attempting to get a better — and more permanent — deal on tax rates, and opted for what they believed was the more practical and prudent approach.

When the number of Republicans increases in the next Congress, the Republican establishment will continue to be pressured by forces outside the beltway and those within, particularly by incoming members who believe they were sent to Washington by the Tea Party to send a message before governing.

How Republicans negotiate within their own ranks in the next Congress may be as fascinating as how the Republicans will potentially negotiate with Democrats.

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