Politics
2:21 am
Mon August 4, 2014

A Tax Bill Killed By The Push And Pull Of Politics On The Hill

Originally published on Mon August 25, 2014 11:12 am

A few months back, Sen. Ron Wyden, a Democrat from Oregon, brought a bill to the floor that basically offered tax incentives to businesses and individuals. Those incentives are called tax extenders.

They include big stuff and small stuff — tax breaks for wind farms, tax breaks for schoolteachers who buy their own supplies. Tax breaks for rum producers in Puerto Rico, people who make movies, race track owners, even some breaks for people who bike to work. In other words, something for every lawmaker to take home.

This should have been a slam dunk. And at first, it was. Ninety-six senators gathered in the chamber shortly after Wyden's speech, and all voted in favor of moving the bill forward. But two days later, this bill, with 96 out of 100 supporters, was stopped cold. To anyone watching, it might have looked like some special kind of insanity.

But Howard Gleckman, a senior fellow with the tax policy center at the Urban Institute, says look closer.

"This is all fairly well planned," he says. "This isn't World War I, where we kind of accidentally stumbled into a catastrophe."

He says he does understand how frustrating it is for Americans to watch this process: "It's either frustrating or amusing. If you actually watch this on C-Span and you don't get the joke, it has to be very frustrating."

That leads to things like a rally outside the Capitol on a recent afternoon of Republicans who were upset with Senate Majority Leader Harry Reid for not bringing House bills to a vote.

But underneath the seeming randomness of one day supporting a bill and the next day killing it, is a careful and precise game of politics, and neither party — on this bill or most others — knows for sure how it's going to play out.

For the tax extenders, the writing on the wall came several hours after that first vote when Sen. Orrin Hatch, a Republican from Utah, essentially threw down the Obamacare card, bringing up the law's much-maligned tax on medical devices.

"And yet the leadership of this body won't allow it to be brought up free-standing or on some bill that has some chance of passage through both houses of Congress," Hatch said.

Hatch called for a vote on whether to scrap the medical device tax by putting it onto a bill that has some chance of passage — in this case, the tax extenders bill. Pressure from Republicans carried into the next day. Majority Leader Reid finally came to the floor and said he wouldn't do it.

Behind the scenes, staffers say Reid couldn't afford to let the medical device tax get a vote. He has several Democratic senators in tough re-election races in states with medical device companies. No contested Democrat wants to take a position on something like that in an election year. Reid had a choice to make, and it was an easy one. His priority is to protect the Democratic majority in the Senate, even at the expense of a popular tax bill. Even at the expense of C-Span viewers shaking their heads at what could seem like kindergartners on a playground.

So, tax extenders died a quick death. But most people on the Hill say it will be back — just not until after elections.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

LINDA WERTHEIMER, HOST:

Here's the way you might like to think the Congress works. Somebody has an idea for a new law it's proposed, voted up or down and Congress moves on.

STEVE INSKEEP, HOST:

That might be nice. But Congress is never that simple. The law reflects a complicated country and Congress reflects complicated politics.

WERTHEIMER: And that complexity led to the seemingly bizarre failure of a proposal with bipartisan support. Almost all the Senate went on record in favor of a package of tax breaks. Then just as Congress was about to leave town for a recess, the plan was killed. NPR's Laura Sullivan explains why.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT BARACK OBAMA: The senator from Oregon.

SENATOR RON WYDEN: Mr. President, this morning the Senate begins consideration of a tax cut bill.

LAURA SULLIVAN, BYLINE: A few months back, Senator Ron Wyden, a Democrat from Oregon, brought to the floor a bill that basically offered tax incentives to businesses and individuals. They're called tax extenders. They've got big stuff and small stuff - tax breaks for wind farms, tax breaks for school teachers who buy their own supplies. Tax breaks for rum producers in Puerto Rico, people who make movies, racetrack owners, even some breaks for people who bike to work - in other words, something for every lawmaker to take home.

(SOUNDBITE OF ARCHIVED RECORDING)

WYDEN: And let us move on to urgently-needed, bipartisan, comprehensive tax reform. With that, Mr. President, I yield the floor.

SULLIVAN: This should have been a slam-dunk and at first it was.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN: Mr. Alexander, Ms. Ayotte, Ms. Baldwin, Mr. Barrasso.

SULLIVAN: Ninety-six senators gathered in the chamber shortly after Wyden's speech and all voted in favor of moving the bill forward. But two days later, this bill, with 96 out of 100 supporters, was stopped cold. To anyone watching, it might have looked like some special kind of insanity. But Howard Gleckman, a senior fellow with the Tax Policy Center at the Urban Institute, says look a little closer.

HOWARD GLECKMAN: This is all fairly well planned. This is not like World War I, where we accidentally stumbled into a catastrophe.

SULLIVAN: Do you have any idea how frustrating that is for Americans to watch?

GLECKMAN: Oh, sure. I mean, it's either frustrating or amusing. If you actually watch this on C-SPAN and you don't get the joke, it has to be very frustrating.

SULLIVAN: And leads to things like this.

(SOUNDBITE OF ARCHIVED RECORDING)

CROWD: Harry, take it out of the stack. Harry, take it out of the stack.

(CHEERING)

SULLIVAN: That's a rally outside the Capitol on a recent afternoon. These were Republicans upset with Senate Majority Leader Harry Reid for not bringing House bills to a vote. But underneath the seeming randomness, of one day supporting a bill and next day killing it, is a careful and precise game of politics. And neither party, on this bill or most others, knows for sure how it's going to play out. For the tax extenders, the writing on the wall came several hours after that first vote, when Senator Orrin Hatch, a Republican from Utah, essentially threw down the Obamacare card and its much maligned tax on medical devices.

(SOUNDBITE OF ARCHIVED RECORDING)

SENATOR ORRIN HATCH: And yet the leadership of this party won't allow it to be brought up free standing or on some bill that, basically, has a chance of passing through both houses of Congress.

SULLIVAN: Did you catch that? He wants to vote on whether to scrap the medical device tax by putting it onto a bill that has some chance of passage - in this case, the tax extenders bill. Pressure builds from Republicans into the next day. Majority Leader Reid finally comes to the floor and says he won't do it.

(SOUNDBITE OF ARCHIVED RECORDING)

SENATOR HARRY REID: Madam President, I object.

UNIDENTIFIED WOMAN: Objection is heard.

SULLIVAN: Behind the scene staffers say Reid couldn't afford to let the medical device tax get a vote. He has several Democratic Senators in tough re-election races in states with medical device companies. No contested Democrat wants to take a position on something like that in an election year. Reid had a choice to make and it was an easy one. His priority is to protect the Democratic Majority in the Senate, even at the expense of a popular tax bill - even at the expense of C-SPAN span viewers shaking their heads at what could seem like kindergartners on a playground.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED WOMAN: The ayes are 53, the nays are 40. The motion is not agreed to.

SULLIVAN: Tax extenders died a quick death. But most people on the Hill say will be back, just not until after the elections. Laura Sullivan, NPR News, the Capitol. Transcript provided by NPR, Copyright NPR.

Tags: