House Votes To Permanently Repeal Marriage Tax

CBS (6/13, story 7, Rather) reports, “In Congress, the House voted for permanent repeal of the so-called marriage tax. Prospects for final passage in the Senate are iffy at best. Opponents of repeal say Social Security trust funds would be drained to make up for the lost marriage tax money.”

The Washington Times (6/14, Dinan) reports that “the Senate is not likely to act on the bill. . The measure to make marriage-penalty relief permanent, which has the backing of the Bush administration, passed the House 271-142, with one independent and 60 Democrats joining 210 Republicans in voting for it, and 141 Democrats and one independent voting against it.” Democrats “said the bill is irrelevant until 2011, and Republicans’ push to pass it exposes the whole exercise as political theater.”

The AP (6/13, Espo) reports Republicans “pushed legislation through the House on Thursday granting permanent tax relief to married couples, overriding Democratic complaints they were draining Social Security trust funds to gain election-year advantage.” The 271-142 vote “sent the bill to the Senate, where Majority Leader Tom Daschle, D-S.D. expressed little enthusiasm for scheduling a debate on the issue.” Rep. Roy Blunt said, “We don’t want to have a $42 billion annual tax increase that goes into effect Jan. 1, 2011, because people are married.” The AP adds Rep. Steny Hoyer “said the bill was part of a ‘fiscal irresponsibility rampage’ by Republicans, coming on the heels of an effort to make estate tax repeal permanent.” Daschle, “fresh from engineering Wednesday’s defeat of the estate tax repeal, showed scant enthusiasm for another tax-cut battle.” Daschle said, “With all the work we’ve got to do, I think it would be difficult to anticipate another tax debate along the lines of what the House is proposing. … My sense is that we’ve been there and done that.” The AP adds, “It was the second day in a row that congressional Republicans used debates in the Capitol to criticize Democrats on tax-cutting issues.”

Reuters (6/13, Smith) reports the House “voted overwhelmingly on Thursday to extend a popular tax cut for married couples as Republicans push to bolster their tax cutting credentials ahead of the November elections.” But the measure is “unlikely to be taken up in the Senate, which is controlled by Democrats.” Voting to “eliminate the so- called marriage penalty proved politically popular in the House, and 60 Democrats voted for the Republican-backed bill after the House rejected a Democratic alternative.” Republican backers “argued that failure to act would result in a $42 billion tax increase for 36 million people in 2011. But Democrats argued there was no rush to make permanent a tax cut that has not yet gone into effect and accused Republicans of playing politics.”

CQ (6/13, Torobin) reports the House “now has moved five different bills that would extend tax cuts scheduled to expire in 2001. The strategy has forced Democrats — who generally oppose debates about tax cuts when the nation is spending more than it takes in — to cast votes that might become fodder for campaign commercials.” But while “60 House Democrats voted for the bill, several others mocked Ways and Means Chairman Bill Thomas and the House GOP leadership for focusing on tax cuts instead of other legislation — dealing with prescription drugs and offshore tax havens, for instance — and dismissed the notion that those who voted against the bill would feel voters’ wrath in November.”

KDFW-TV of Dallas (6/13) reports, “Today the House approved legislation that will grant permanent tax relief to married couples. It’s part of an effort to make President Bush’s tax plan last beyond its scheduled expiration in the year 2011. Democrats say doing so will drain Social Security funds.”

More Commentary.

In Business Week (6/24), Robert Kuttner says, “Congressional Budget Office projections suggest that a permanent tax cut would create permanent deficits, excluding Social Security. In its latest long-term report, in March, the CBO forecast budget deficits in eight of the next nine years. Of the worsening fiscal picture over the decade, says the CBO, $2.4 trillion reflects changes in tax laws. By 2011, if the tax cut is extended, the annual non-Social Security deficit would be around $300 billion. This is just when large numbers of baby boomers retire and Medicare costs will skyrocket.” Given “these figures, it is incredible that serious people, much less serious conservatives, want deeper

tax- cutting.” So “why would any prudent Republican politician play this kind of roulette with the economy? For the same reasons Ronald Reagan did: First, a tax cut for the wealthy rewards political allies; second, it starves the public sector of revenue, making it impossible to finance new spending programs in keeping with the GOP’s small-government crusade.”

Local TV Coverage.

WFSB in Hartford (6/13) reports, “The House has voted to make permanent the tax relief that went to married couples, but don’t count on that extra money just yet. The bill now goes to the Senate, where it’s getting a less-than-enthusiastic response from Majority Leader Tom Daschle. Without congressional action, married couples will pay more when the tax cut expires in 2011.”

WNBC in New York (6/13) reports, “House Republicans approved a bill to grant permanent tax relief to married couples. Democratic Majority Leader Tom Daschle gave it a cool reception. They say easing the marriage tax will drain Social Security funds.”

Rove Calls For “War” Over Estate Tax.

The Washington Post (6/14, A5, Allen) reports, “Karl C. Rove, President’s Bush’s senior adviser, promised yesterday to wage ‘a war’ for permanent repeal of the estate tax.” The Post notes, “Rove, in a rare public appearance, told the National Federation of Independent Business that Bush is committed to increasing economic growth and creating jobs. ‘That’s why he has an agenda that, even in the midst of war, he’s not giving up on,’ Rove said.” The Post adds, “Rove said that agenda includes making last year’s tax cut permanent, starting with the elimination of the inheritance tax, which Republicans call the ‘death tax.’ Under last year’s law, the repeal of the tax expires in 2011. A bill to make the cut permanent failed in the Senate by six votes on Wednesday.” Rove said, “Don’t look at it as a defeat. . This is a war, and we need to make an ongoing commitment to winning the effort to repeal the death tax.”

Repeal Advocates Reportedly Beaten By Lobbyists, Daschle Strategy

. The New York Times (6/14, Hulse) reports, “As the Senate moved toward a risky vote on repealing the estate tax, William H. Gates Jr. sat a continent away on Wednesday, trying to work his will on the proceedings.” The Times continues, “One of a group of wealthy Americans who have campaigned to keep the inheritance tax, Mr. Gates, father of the Microsoft mogul, called pivotal senators. From Seattle, he laid out his case for withstanding the Republican-led election year effort to eliminate the tax or put Democrats on record as opposing repeal.” Gates lobbied, “Senators Jean Carnahan of Missouri and Tim Johnson of South Dakota, two Democrats who will no doubt face tough questions about the tax in their re-election campaigns. Mr. Gates said he doubted that he had much effect. But Mr. Johnson and Mrs. Carnahan were among 44 senators who voted to retain the tax, blocking a business-backed campaign to end it.” On the other hand, “Repeal advocates say they had successes, as well, in retaining two other Democrats, Ron Wyden of Oregon and Bill Nelson of Florida.” Marty G. Reiser, a spokesman for Citizens for a Sound Economy said, “Oregon and Florida were our biggest targets. . We generated visits to their offices and a lot of phone calls. Their staffs were certainly aware of our pressure.” The Times notes, “Business lobbyists, who knew from the start that they had an uphill fight, said the maneuver by the Senate majority leader, Tom Daschle, Democrat of South Dakota, to bring the issue to the floor unexpectedly on Tuesday cost them.”