Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
BY JON WARD
Republican presidential hopeful Mitt Romney on Tuesday came out against the tax deal reached between President Obama and congressional Republicans, saying the temporary nature of the tax rate extension would limit the positive economic impact and correspondingly make the deficit worse.
Romney’s move has the potential to spur broader opposition to the deal among Republican lawmakers than has previously been seen, and is clearly intended by the former Massachusetts governor as a play for support from Tea Party and grassroots conservatives.
“What some are calling a grand compromise is not grand at all, except in its price tag,” Romney wrote in an op-ed published by USA Today. “The total package will cost nearly $1 trillion, resulting in substantial new borrowing at a time when we are already drowning in red ink.”
Romney argued that while “in many cases, lowering taxes can actually increase government revenues,” because the extension of current tax rates is only for two years, the economic growth that would have been created by a permanent extension would fall far short of producing the kind of tax revenues needed to reduce the deficit and debt.
“While the tax deal will succeed in temporarily putting more money in the hands of consumers, it will fail to deliver its full potential for creating lasting growth,” Romney wrote.
Romney also staked out an unmistakably hard line conservative position on unemployment benefits, which the tax deal would extend for 13 months. While he acknowledged that joblessness can produce “heartbreak,” he said that longer term government benefits “actually serve to discourage some individuals from taking jobs, especially when the benefits extend across years.”
He proposed to establish “employment savings accounts” to replace government-provided benefits. And he took clear aim at the component of the deal that is most egregious to many conservatives: the unpaid for unemployment insurance spending.
“In spending $56.5 billion to extend benefits, the deal is sacrificing the bedrock Republican principle that new expenditures be paid for with offsetting budget cuts,” he said.
Prior to Romney’s bombshell on Monday, House leaders from both parties told The Daily Caller that the tax deal would clear the House as soon as the end of this week by a relatively slim margin, with a margin for error of roughly 20 votes or so.
The Senate voted overwhelmingly, 83 to 15, to end debate on the measure and move toward a final vote on passage, which will take place either late Tuesday or Wednesday morning.
In the House, the measure needs 218 votes to pass. Key Democrats and Republicans estimated that combined they will have about 240 votes.
House Democrats told TheDC they expect to have about 100 votes in favor of the measure, which is far less than half of the 255-member caucus. House Republicans are expected to support the measure in far greater numbers, with only between 20 and 40 of their 179 members voting against it, a knowledgeable Capitol Hill Republican said.
But if 40 House Republicans do turn against the bill, and support for the deal erodes with House Democrats under the 100-vote mark, the bill could potentially land in some hot water.
That scenario is now far more likely thanks to Romney’s break with the agreement.
>>Continue reading at the Daily Caller.
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Jun '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
Sometimes, the political dangers for people who plan to run for office in two years are the exact opposite of the political dangers for those in office now, those who'll get the direct blame for creating any temporary delays, headaches, or chaos. The tax deal might be one of those. "It's good not to be the king."
Dec '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
“The total package will cost nearly $1 trillion, resulting in substantial new borrowing at a time when we are already drowning in red ink.”
Say what? How is not taking the money earned by and belonging to private citizens a "cost" to the Federal government?
Methinks Mitt has become part of the political class that thinks all income belongs to the government except what the politicians, in their wise and beneficent magnanimity, deign to dole out to the income-earners to reward them for working for the government.
Sep '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
In my view the country would have been better off if tax rates were allowed to go up and the subject addressed in the new congress. Twiddle Dee and Twiddle Dumb will prove to be abysmal leaders for the GOP in the coming 2 years and they’re demonstrating this with this deal. The GOP should have insisted that the tax rates be addressed separately and not used a vehicle to further increase the deficit with more lard. Being porkers themselves, this was not done. Unfortunately Romney’s political posturing will have little effect.
May '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
Liberal Jim, they can insist like crazy, something will still get attached, no matter what.
But I'm not going to pay any attention to Mitt till he comes clean on Massachusetts health care and confesses that it was a mistake. Till he does that, he can't have fiscal conservative credentials.
Jul '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
From Jon Podhoretz's Twitter:
And the Mitt Romney, Most Inauthentic Politician in America, Drive to the Presidency continues: http://goo.gl/1gMyj
about 20 hours ago via web
Nov '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
Ditto that.
I like Mitt, but I'm waiting for him to tell us in no uncertain terms that he made a mistake, that he's sorry he ever tried it, and that he now knows that more government in the medical industry is the last thing we need.
And it better be convincing.
Jul '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
This "temporary extension of the Bush rates" argument is totally bogus.
The 111th Congress could have mandated a "permanent, from now-to-the-end-of-time, absolutely until Doomsday, it's-never-going-to-change-and-we-really-mean-it extension of existing income tax rates" and it wouldn't have one bit of influence over what any subsequent Congress can do.
All the two-year extension means is that the issue will be re-addressed in 2012.
I'm aware that under Milton Friedman's "permanent income" theory, a temporary extension won't have the effect of encouraging people to consume, but under current circumstances there are so many other uncertainties baked into the cake by Democrats that people are keeping their wallets nailed shut, anyway.
Guys like Romney and DeMint are just using this to tout their conservative fiscal credibility.
To Romney, I say, "Go away already. We've got your number."
To DeMint, I say, "Uh, Jim, yes, you are the prettiest girl at the dance. Now get to work."
Edited on Dec 14, 2010 at 2:47pmMay '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
Starve the Beast
Ditto that.
I like Mitt, but I'm waiting for him to tell us in no uncertain terms that he made a mistake, that he's sorry he ever tried it, and that he now knows that more government in the medical industry is the last thing we need.
And it better be convincing. · Dec 14 at 1:25pm
I actually think that we do need government in the medical industry, but it needs a lot of changes, many of types that haven't been contemplated very much. Government is doing exactly the wrong thing in most situations at the moment.
Jul '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
Duane Oyen
Starve the Beast
Ditto that.
I like Mitt, but I'm waiting for him to tell us in no uncertain terms that he made a mistake, that he's sorry he ever tried it, and that he now knows that more government in the medical industry is the last thing we need.
And it better be convincing. · Dec 14 at 1:25pm
I actually think that we do need government in the medical industry, but it needs a lot of changes, many of types that haven't been contemplated very much. Government is doing exactly the wrong thing in most situations at the moment. · Dec 14 at 2:43pm
How you write like these sentences in succession is a wonder Duane; it is cognitive dissonance defined. Government is needed, but is doing the wrong thing at the moment. That's the problem. It always is doing the wrong thing at the moment.
Sep '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
Romneycare will always be a millstone around the neck of Mitt. Even if he comes clean and does a mea culpa, I don't think it will do him any good.
Is this deal a good one? I don't think so. The more I think about it, the more I think it stinks.
If I were a member of the congress, I'd vote against it. I'd take my chances with the new congress in January, vote for a permanent tax rate at the current levels, refund the temporary tax hike to the citizens, not do any new spending, and see if Ol' Barry would have the stones to veto it.
Dec '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
Lesson in taxation: recall your classical economics. Reread David Ricardo. There are no such things as “government bonds.” Those are a fiction created for the thoughtless. There is government control over money. The federal government has a balanced budget on a cash flow basis. Government control over money takes two forms: (1) there is tax (which is a promise to take money and not give it back); and (2) there are bonds (which are “contingent” taxes--the government takes the money and says maybe we will give it back if we replace it with taxes from someone else. Otherwise, we tax you.). Thus, if government spending is constant, a cut in taxes for one group means an increase in contingent taxes (to balance the cash flow).
Now think about Mitt Romney’s remarks--what the Governor from Bain Capital is saying, is that a situation in which the government finances current cash needs from the rich in the form of “contingent taxes” is not in the long term interest of Bain Capital which competes for the same pool of funds. Mitt would prefer actual stated taxes cover government cash flow so that Bain knows how to project future cash plans.
May '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
Romney'll say anything and everyone knows it, so I doubt his two cents will affect votes. Would he have come down so hard against the bill if Palin and Rush and co. hadn't done so first? Impossible to tell with him.
Paul Ryan made a strong defense of the bill on Bill Bennett's show this morning. His biggest fear is a massive Wall Street sell off (among other negative consequences) if the issue is not resolved before Jan 1. Further, he considers it a reasonable possibility that some hypothetical "new and improved" House bill wouldn't make it through next year's Senate, which, afterall, will still be Democratic. So we'd be faced with a shock to the economy, higher taxes, and no bill, a risk Ryan feels we must avoid.
Rush and friends are acting as though we're going to be running the joint in January--House and Senate--and will be able to write our dream bill and dare Obama to veto it. Not so.
Oct '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
Stuart Creque: “The total package will cost nearly $1 trillion, resulting in substantial new borrowing at a time when we are already drowning in red ink.”
Say what? How is not taking the money earned by and belonging to private citizens a "cost" to the Federal government?
Methinks Mitt has become part of the political class that thinks all income belongs to the government except what the politicians, in their wise and beneficent magnanimity, deign to dole out to the income-earners to reward them for working for the government. · Dec 14 at 11:43am
Don't be absurd. You know as well as I do, no spending is being cut to compensate for this; itis a cost. Look, we've had enough rightwinger populist rheteric for why spending beyond our means isn't bad.
Ronald Reagan would never have stood for this; he raised taxes himself when needed! We've not suffered from the Laffer curve for decades!
This is spending. It's good spending, and will help our economy. But we will pay for it later. That's how spending beyond our means works, whether its borrowed or not.
Edited on Dec 14, 2010 at 8:10pmOct '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
I've never understood Romneycare. It copied all the bad bits of private universal healthcare markets (from those nations that do it), and little to none of the good parts.
An insurance mandate isn't a panacea. It takes a lot more then that.
Standfast: Romneycare will always be a millstone around the neck of Mitt. Even if he comes clean and does a mea culpa, I don't think it will do him any good.
Is this deal a good one? I don't think so. The more I think about it, the more I think it stinks.
If I were a member of the congress, I'd vote against it. I'd take my chances with the new congress in January, vote for a permanent tax rate at the current levels, refund the temporary tax hike to the citizens, not do any new spending, and see if Ol' Barry would have the stones to veto it. · Dec 14 at 5:44pm
Jul '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
There's your nutshell. The man is our Clinton. He's smooth, clever, pleasant, successful, manipulative, untrustworthy.
Oct '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
@Palaeologus
Ah come on. If extremists weren't disproportionately powerful, moderates wouldn't have to change their tune so much (do you honestly believe the real world matches any political ideology, right or left?).
There's too much populism in our political culture. Politicians do not change their tune by choice; that is the nature of populist rhetoric.
May '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
I don't understand how this is a bombshell. While I don't agree that continuing the current tax rates constitutes a cost to Govt. (3/4 of Mitt's $1 trillion price tag), the rest of his statement is simply fact. His feeling is that the increased debt makes the package not worth doing. Defenders like Ryan say that a massive tax rate increase, even if short term, would be even worse - so the deal is worth passing.
This seems to me to be obvious statements of fact coupled with different, but equally obvious, interpretations of likely outcome. Sounds like healthy and reasonable debate rather than a bombshell. I would vote against the package on principal - not increasing debt. I also believe however that Paul Ryan is probably correct in what would happen should this not pass. There is no good alternative here - and the alternatives in the future will continue to worsen.
Jul '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
Joseph Eagar:
Ah come on. If extremists weren't disproportionately powerful, moderates wouldn't have to change their tune so much
There's too much populism in our political culture. Politicians do not change their tune by choice; that is the nature of populist rhetoric. · Dec 14 at 10:02pm
I don't dispute any of that.
Nevertheless, I believe there are moderates and "moderates."
For instance, Stephen Douglas had a moderate position on slavery: leave it to the folks of a given state.
Abe Lincoln had a different, moderate, position: choke it off, don't let it grow, it will die on its own.
Neither was a Jimmy Buchanan or a John Brown.
It's simple. Do you trust the dude? Or not?
Yeah, moderates are put in tough spots constantly, but is it really so hard to note when moderation = calculation?
I'd say it becomes much easier when one is pro-choice in MA and pro-life in the Republican presidential primary.
Edited on Dec 14, 2010 at 10:58pmOct '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
Palaeologus
Joseph Eagar:
I don't dispute any of that.
Nevertheless, I believe there are moderates and "moderates."
<snip>
Yeah, moderates are put in tough spots constantly, but is it really so hard to note when moderation = calculation?
I'd say it becomes much easier when one is pro-choice in MA and pro-life in the Republican presidential primary. · Dec 14 at 10:46pm
Edited on Dec 14 at 10:58 pm
There's certainly a point there. The problem with compromise is the major players must be willing to play along; when it comes to deficit reduction, that isn't the case (when the third rails of politics are Defense, Social Security, Medicare and Raising Taxes, cutting deficits becomes impossible).
I guess we've gotten too intolerant of sacrifice. . .at some point taxes will go up and spending will plummet, but since the middle class will take the brunt of it politicians are running scared.
May '10
Re: Romney Announces Opposition to Tax Deal, In Major Blow to GOP's United Front
Palaeologus
There's your nutshell. The man is our Clinton. He's smooth, clever, pleasant, successful, manipulative, untrustworthy. · Dec 14 at 9:47pm
....but we should add that Mitt is a rock-solid husband by all accounts.