Republicans pass tax breaks, but don’t pay for them
April 29th, 2014
06:44 PM ET
9 years ago

Republicans pass tax breaks, but don’t pay for them

Washington (CNN) – Republicans want to cut the deficit. And Republicans want to cut taxes. Tuesday, those two sweeping goals collided as a GOP-controlled House committee voted to advance hundreds of billions in tax cuts at the cost of adding those billions to the deficit.

The House Ways and Means Committee voted almost entirely along party lines to make six tax breaks permanent at a cost of $310 billion over the next 10 years.

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The top Democrat on the committee pounced.

“To say that Republican action today is hypocritical is a serious understatement,” Rep. Sandy Levin of Michigan said. “This approach today of Republicans flies smack in the face of fiscal responsibility.”

But the committee’s Republican chairman, Dave Camp, also of Michigan, did not blink. He responded that the tax breaks have been passed year after year without any offsets.

“This bill has been extended, unpaid for, probably 30 times,” Camp said of a research tax credit. “I think it’s important we extend this … supporting permanency, not a temporary extension.”

Team Camp also points to another argument: They believe the jobs that come from tax breaks are worth adding some red ink to the deficit.

“These are things that people feel are extremely worth adding to the economy,” said Camp spokeswoman Sarah Swinehart.

What’s $310 billion get you?

These six so-called “tax extenders” that the Ways and Means Committee approved Tuesday were plucked from a larger group of 55 tax breaks that expired at the end of 2013 and have been waiting for congressional renewal.

Among those passed Tuesday were three biggies: the research and experimentation deduction, the credit that helps small businesses with major equipment costs, and the break for businesses earning rent and interest overseas.

Camp was correct. In recent years, Congress has extended the breaks year after year without offsetting their costs. But in the 90s, most of them were offset.

Why the flashpoint now?

Democrats are particularly pressing the issue now because they see a conflict between the Republican demands that spending, especially on Democratic priorities like unemployment benefits, be offset while the GOP allows their own priority – tax cuts – to add to the deficit.

“It’s a clear double standard, particularly when you hold up unemployment,” said Chuck Marr, director of tax policy at the left-leaning Center on Budget and Policy Priorities.

But Democrats also have exceptions to pay-for pushes, notably, many Democrats believe that unemployment benefits are emergency spending and do not need to be offset.

When asked if that is a double standard from the left, Marr said no.

“Unemployment insurance is a temporary, countercyclical move,” he replied. “What Republicans are doing here is pushing for something permanent and unpaid for.”

GOP chooses tax cuts at expense of deficit

Republicans insist their decision to choose tax cuts over trimming the deficit is nothing new.

“(Chairman Camp) has the position that extensions of current policy and tax cuts don’t have to be paid for,” said Swinehart. “Pay-fors are for spending. New spending. That’s his position.”

Yet, in Camp’s recent sweeping tax reform proposal, he did pay for all the tax cuts he extended. He did that largely by repealing other tax cuts. But that proposal is not going anywhere.

Camp insists that’s not a contradiction. His office argues that paying for tax breaks is only possible in a comprehensive revision of the tax system, not when tax breaks are taken one by one as the House is preparing to do now.

The result: On Tuesday, Republicans on the Ways and Means Committee choose their anti-tax crusade over their image as deficit hawks.

Next, all Republicans in the House will face a similar choice.

Multiple GOP sources tell CNN they expect all six tax credit bills to get votes on the House floor and that leadership is still working out the exact timing.

Filed under: Congress • Republicans • Taxes
soundoff (68 Responses)
  1. Gary

    So I guess that extending these tax breaks year after year is ok but raising the dept limit, like has been done year after year isn't. The only way to get R's to be against this would be if President Obama thought it was a good idea. True hypocrits.

    April 29, 2014 06:56 pm at 6:56 pm |

    Democrats are upset why ? Because it makes jobs where PPL can work and provide for themselves . And not depend on their kind of government . Foodstamps welfare etc .

    April 29, 2014 06:56 pm at 6:56 pm |
  3. Wes

    Pay for a tax cut? What does that mean? If I can't afford something, I don't buy it. Pretty simple.

    April 29, 2014 07:00 pm at 7:00 pm |
  4. Bobby Sherman

    The GOP, blind leading the blind!

    April 29, 2014 07:01 pm at 7:01 pm |
  5. The Elephant in The Room

    President Obama inherited a moribund economy flat on it's back. He staved off the worse financial calamity since the Great Depression. He saved the American automobile industry and he has vastly reduced the US budget DEFICT that George W. Bush President #43 [a REPUBLICAN] left. Mr. Obama has us moving towards a SURPLUS, the first time this has happened since the last DEMOCRAT was in the WhiteHouse . . . . that would be one Bill Clinton. Only several years of a surplus can eliminate our $17Trillion of debt. That's the same debt that Republicans try to blame on Obama.

    It is wholly financially IRRESPONSIBLE for House Republicans to be trying to give away money to the wealthy in the form of tax breaks that will move the DEFICT in the WRONG direction. Dick Cheney may have said deficits don't matter; but intact they do.

    The GOP must be called to pay for everything they do. Every war they want to fight and every bit of corporate welfare they want to bestow.

    April 29, 2014 07:02 pm at 7:02 pm |
  6. J Anthony

    The hypocrisy is simply mind-blowing. The pretzel-logic this sham-committee spews out makes a mockery of the taxpayers.

    April 29, 2014 07:07 pm at 7:07 pm |
  7. belinda

    Americans, are well aware of Republican overindulgence, Remember ? All of the George Bush, GOP policies, that almost brought our country to it's knees ??? Corporate Welfare is the GOP's favorite charity. It's critical that Americans send a message this fall, to these GOP conservative extremists, that they don't run this country, we do.

    April 29, 2014 07:08 pm at 7:08 pm |
  8. LT Fang

    Failing Algebra is dangerous.

    April 29, 2014 07:16 pm at 7:16 pm |
  9. steve

    smoke,mirrors, and yes,trickle down economics!

    April 29, 2014 07:26 pm at 7:26 pm |
  10. They ought to change from the elephant to the hippo...

    This shouldn't be in the "news" section. It should be in the "tired out, same old.." section...

    Do Republicans actually have any "new" ideas? It seems like they haven't even a clue...

    April 29, 2014 07:54 pm at 7:54 pm |
  11. Dustin

    So, the government can wastefully spend ridiculous amounts of money it doesn't have, but letting earners keep more of their money must be "paid for"? Spoken like a true bureaucrat

    April 29, 2014 07:57 pm at 7:57 pm |
  12. Pollopa

    The GOP continues to wreck the economy. Yeah both parties to blame ... riiight.

    April 29, 2014 07:57 pm at 7:57 pm |
  13. kenneypco

    Republicans once again show that they are represent businesses interests over the average American voter population. Republicans will insist on off-sets when it comes to providing assistance to feed American citizens but not when providing assistance to foreign countries. Republicans will insist on off-sets when it comes to providing unemployment assistance to people that have been let go by American businesses (small business and large alike). Republicans will scream at the top of their lungs about the deficit when money is spent on the average American citizen but then turn around and add to the national deficit to assist businesses.

    People will claim that businesses are job creators but seem to refuse to acknowledge that consumers are job keepers. Without consumers jobs rapidly disappear. Providing tax breaks to businesses does NOTHING to spur consumers spending on the scale needed to create the job growth Republicans are always hammering Democrats for not producing.

    April 29, 2014 08:08 pm at 8:08 pm |
  14. Jack33

    Republicans have yet to offer me a single good reason to vote for them. The last time they had a coherent fiscal policy was under Eisenhower, and today are a totally irresponsible Party that only appeals to the ultra-greedy element of the $3000/hr class or small-town rubes who are too naive to realize they are being played via wedge issues.

    April 29, 2014 08:24 pm at 8:24 pm |
  15. Dave in Arizona

    Nobody should be surprised by this. This is how Republicans have operated for 30 years, which is why they always build deficits and increase the rate of debt gain.

    And mark my words, if they ever manage to repeal anything of Obamacare, it'll just be the mandates–what's used to pay for everything else they'll avoid cutting since people like them.

    April 29, 2014 08:35 pm at 8:35 pm |
  16. don in albuquerque

    Another responsible move by the fiscally responsible GOTP. Wanna talk any more about the Dems bankrupting America? The GOTP is really a bad joke.

    April 29, 2014 08:39 pm at 8:39 pm |
  17. God MAY NOT be a Liberal, but He IS a Democrat

    Isn`t it amazing that now that Barack Hussien Obama is SHRINKING the US budget deficit aggressively, Republicans – supposedly the fiscally responsible party – are trying to ADD to the deficit? Don`t we have a $17T National Debt GOP`ers? Isn`t that the most important thing in life according to your talking points?
    It is irresponsible to use taxper money to subsidize corporate profits by giving them credits for routine business expenses. Afterall, isn`t this a capitalistic nation? If they can`t make a profit in the "free market" then fail and get out of the way. No more of the GOP economic principle of "socializing" expenses & losses but "privatizing" profits. That`s not very American.

    April 29, 2014 08:50 pm at 8:50 pm |
  18. Amazing

    Once again, we see the hypocrisy of the GOP. Deficits are only a concern when the President is spending. When they are spending, deficits don’t matter. The same argument that they are using can apply to the entitlement programs (i.e. Congress has passed spending on these programs for years). As a Democratic, I don’t have a problem with reducing entitlements for people such as myself who have sufficient money. But, if you cut entitlements then you must do the same with tax credits for business so that everyone shares in the pain.

    April 29, 2014 09:03 pm at 9:03 pm |
  19. The Republican Party Is Dead To Me

    And they claim to be the party of fiscal responsibility. They've sure got some of you snowed, completely under.

    April 29, 2014 09:08 pm at 9:08 pm |
  20. Mr. Balls

    Hypocrites on both sides of the aisle.

    April 29, 2014 09:09 pm at 9:09 pm |
  21. Iamnotfooled

    We all know how the "JOB CREATORS" worked out. What hypocrites. Why not pass the American Jobs Act which would actually employ 1.9 million people and fix America's infrastructure instead of putting it in the pockets of the rich?

    April 29, 2014 09:17 pm at 9:17 pm |
  22. jinx9to88

    LMAO! These GOP clowns are hilarious!! They better pay for those tax breaks!!!

    April 29, 2014 09:37 pm at 9:37 pm |
  23. jinx9to88

    “What Republicans are doing here is pushing for something permanent and unpaid for.” Yep business as usual for the GOP. 2 wars, medicare part D and Bush tax breaks for the rich 7 of the 8 year he was in office all put on a credit card for the current Admin. Hypocrites!! I still cant believe people vote for the same people back into office.

    April 29, 2014 09:48 pm at 9:48 pm |
  24. The Real Tom Paine

    Yep, that's the way to pay for the debt we've run up. Keep cutting those taxes, and watch the debt rise even more. Way to go, GOPers.

    April 29, 2014 09:51 pm at 9:51 pm |
  25. tom l

    "But don't pay for them"

    Hilarious. Yeah, sure. This is faux lite. Since when is not taking as much money referred to as a cost? Only in a liberal's mind. Not to mention how simple minded the whole premise is. Maybe at some point some people can understand the concept of "more economic activity" and how that leads to more revenues. Just ask JFK

    April 29, 2014 09:51 pm at 9:51 pm |
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