House Approves Tax Rate Bill

By Douglas V. Gibbs

To my great surprise, the House of Representatives have passed the tax rate bill, and have sent the bill to President Obama to sign into law. The bill freezes tax rates for the next two years (a good thing), while extending unemployment benefits (paying people not to work - a bad thing - a new entitlement?). The measure is also full of earmarks, making it an incredibly expensive spending bill. While the payroll tax is cut 2% for the next year as a result of the passage of this bill, most economists believe the temporary relief will do little to spur growth. For confidence in the market to increase, the payroll cut needs to be enacted for a longer period of time, and new tax cuts need to be implemented on a permanent basis. Also, spending needs to be cut drastically, something this bill refuses to do - making conservatives angry because the failure to stop new spending is a broken pledge from the GOP's Pledge to America.

The Senate voted in favor of the bill yesterday, 81-19; the House tonight approved the bill by a vote of 277-148. A number of Republicans supported the bill, believing it was the only way to protect the lower tax rates. Without the bill, many members of the GOP (Representative Hatch of Utah articulated such today on the Hugh Hewitt Show) believe that this may be the only chance to keep the rate lower, and if the tax cuts were to expire, once the rate was higher, it would be that much more difficult to bring the tax rates back down again.

Democrats that had been dead-set against this bill forced a delay, but were defeated in the long run.

Republican Representative Eric Cantor of Virginia stated the bill is a "first step" toward economic recovery.

The approving votes was truly bi-partisan, 139 Democrats and 138 Republicans. 112 Democrats opposed the bill because of the failure to increase taxes on the rich and widen the scope of the Estate Tax; 36 Republicans voted against the bill because of the additional spending in the bill, and the extension of unemployment benefits.

Obama, who spent his entire campaign claiming that the Bush tax cuts were the reason for the economic downfall, hailed this bill as a necessary step in our economic recovery. As a result of his position, liberals have counted him out as moving too far to the right. Conservatives, however, recognize this as simply a tactic to protect his presidency in 2012, knowing that Obama will be pushing for tax increases across the board in 2013 should he be reelected.

Democrats also called for the Estate Tax (Death Tax) to include more people, indicating that the cut off is too high. However, they did not get the adjustment they called for.

A massive spending bill designed to fund the government is also on the table, but the 1,924-page spending measure has been abandoned by Democrats. The bill was filled with earmarks, and after many members of the GOP backed off with their support, Reid pulled it.

In response, Senate Republicans have offered their own one-page bill, to prevent a government shutdown on Saturday, as an alternative.

-- Political Pistachio Conservative News and Commentary

Congress sends tax legislation to White House - Associated Press/Yahoo News

Senate Dem leader drops nearly $1.3T spending bill - Associated Press/Breitbart