White House defends mutually assured corruption
As this blog highlighted yesterday, the White House has started its daily Press Briefings with the arrival of the new Congress. In the first one of the week, on January 7, the reporter for Reuters wasted no time in pegging White House Press Secretary Jay Carney with a pointed question on the fiscal cliff:
The fiscal cliff deal, as you know, included a package of tax breaks for businesses worth about $64 billion, including the wind tax credit. And Republicans are saying that the President insisted on these, and I’m wondering why, given all of the difficulty reaching that final deal, the President really insisted on including these business tax breaks.
This is an excellent question – the President did somehow manage to not require higher taxes for a number of special interests, as Tea Party Patriots noted last week. Unfortunately for partisans, Carney’s answer was excellent:
Well, you’re assuming that what you’ve been told is correct. I would simply say that it would strain the credulity of everyone in this room to suggest that Republicans did not support or want tax credits for business. That would truly be turning Washington on its head, and that is not what happened.
The President did support giving certainty to American businesses and consumers by including in the fiscal deal the bipartisan extenders package that the Senate Finance Committee, this summer — or summer of 2012 — passed 19 to 5. And more than 90 percent of the cost of the extenders package is associated with longstanding provisions in the tax code, with clear policy rationale for businesses or individuals, including the R&D tax credit to support domestic job-creating research investments; the production tax credit, which you mentioned, which supports clean energy jobs — if this key support had been allowed to expire, as you know because it was discussed during the campaign, as many as 37,000 clean energy jobs could have been lost; mortgage debt relief to help homeowners, which protect homeowners from paying taxes on up to $2 million of forgiven debt. And the list goes on — bonus depreciation.
So again, going back to the first point, this package of tax extenders was supported on a bipartisan basis by the Senate Finance Committee. The President supported it. But it is, again — you would have to suspend disbelief to accept the premise that Republicans did not.
As sad as it is, Carney is right that both Republicans and Democrats have supported these tax credits. Of course, as I wrote at Breitbart when Senate Finance Committee Chairman Max Baucus (D-MY) and Senate Finance Ranking Member Orrin Hatch (R-UT) were first pushing extenders through the committee, both parties have their own hypocritical rationale:
On the one hand, the Senate Democratic leadership has aides saying leadership is fine with a “clean extension” of these tax provisions. This is in direct opposition to what Democrats have long said about the Bush tax cuts and most other tax proposals put forward by Republicans. Senator Tom Coburn (R-OK) phrased Republican hypocrisy well when it comes to reforming the tax code through elimination of loopholes and lower rates, noting that, “If you renew tax extenders, how are you going to reform it…The point is it’s a wasted effort.”
In August, the Committee indeed pushed the tax extenders through with a comfortable 19-5 ratio. While some tax credits were ended, the whole package stank of special interest favoritism.
In a sane world, the Reuters question would have been answered sheepishly. The Press Secretary for a President who signed special interest loopholes into law simply because they are for the well-connected would never actually try to defend such an action. Yet that is what Carney did, and by and large the Beltway crowd merely shrugged and moved on.
Carney is right that the tax extenders had bipartisan support; that’s exactly the problem.