July 25, 2011 | Commentary on Taxes
The President set a tax trap, and Republicans have fallen right into it.
President Obama initially argued that he wanted a “clean” debt limit increase with no other matters attached. The President later shifted his position to condition an increase in the debt ceiling on increasing taxes by $1 trillion to $2 trillion over the next 10 years. Obama wanted to see whether Republicans were naive enough to agree to tax increases as part of the deal.
It looks like some of them are. Too bad. An agreement that increases the debt ceiling and increases taxes at the same time is a lose-lose proposition.
The Gang of Six Plan: Promises, Promises
The Gang of Six senators include Republicans Tom Coburn (Okla.), Saxby Chambliss (Ga.) and Mike Crapo (Idaho), and Democrats Dick Durbin (Ill.), Mark Warner (Va.) and Kent Conrad (N.D.). They have been meeting off and on since the demise of the Simpson-Bowles debt commission late last year. One of the many problems with the Gang of Six plan is that it would increase taxes as a means to balance the budget.
David Addington, writing for The Heritage Foundation, said the details of the Gang of Six evidence “an unenforceable promise”—that Congress will eliminate the Alternative Minimum Tax (AMT), drop the individual tax rate to 29% and lower the corporate tax rate to 29%. “The Gang of Six circulated a plan that has Congress enact a law now whose principal elements (1) make unspecified spending cuts and unspecified tax increases to yield a $500 billion reduction in the federal deficit, and (2) impose spending caps on discretionary spending, but not on Social Security, Medicare, Medicaid and welfare programs that are the main cause of out-of-control spending.”
Congress should not raise the debt limit without getting Congress to cease overspending and overborrowing. This generational theft must end right now.
McConnell-Reid ‘Borrow More’ Plan
The McConnell-Reid plan to hike the debt ceiling would merely borrow more money with no significant reforms to spending. The plan has yet to be drafted and shared with the American public. From what we know about the secretly crafted deal, it is not good.
According to Addington, “The McConnell-Reid Plan simply hikes the debt ceiling so the government can borrow more money, with a commission thrown in to meet in the future to recommend to Congress spending cuts that may or may not ever be enacted.” This idea should be offensive to conservatives, because it is yet another punt on tough spending cuts and reforms.
Addington notes that it's obvious why liberals embrace the plan, but hard to understand why any conservative would support this idea. “From a political perspective, it is easy to understand why Sen. Reid supports the plan—after all, he is following the lead of the head of his party, President Obama, whose administration, when faced with the Cut, Cap and Balance spending cut legislation (HR 2560) that was a step in the right direction, said the President would veto it. But it is impossible to understand why Sen. McConnell supports the ‘Just Borrow More’ Plan. As one of the top two leaders of the Republican Party, surely he has some respect for his party’s platform, which proclaims that ‘Republicans will attack wasteful Washington spending immediately.' ”
Cut, Cap and Balance is the only idea that has been shared with the American people that both cuts spending and provides a mechanism to cap the size and scope of the federal government.
Mike Hammond of Gun Owners of America wants lawmakers to use the debt limit to block the administration’s gun control agenda. “A vote for the debt limit without limiting anti-gun ObamaCare, illegal regulations, illegal import restrictions and Department of Justice cover-ups is a vote against the Second Amendment,” he told Human Events.
Hammond wants lawmakers to block the administration’s plan requiring gun dealers in Texas, New Mexico, Arizona and California to register multiple sales of long guns—a requirement his group views as patently unconstitutional. Failure to do so as part of any debt ceiling deal amounts to condoning President Obama’s gun control agenda, he argues.
Furthermore, Hammond says, if conservatives don’t add language to prevent the Obama administration from implementing the United Nation’s efforts to register firearms, it will be allowing an international organization to force unconstitutional gun control ideas into law.
Brian Darling is senior fellow for Government Studies at The Heritage Foundation.
First appeared in Human Events