WASHINGTON -- The Republican majority in the House of Representatives got out of Washington last weekend for the long Thanksgiving holiday without passing a pending tax bill. It was not just the congressional tendency to put off doing today what can be postponed until tomorrow. There were not enough Republican votes to pass a quintessentially Republican tax bill.
The reasons are profoundly disturbing. A goodly number of GOP House members have bought into the Democratic mantra that investment tax cuts, the backbone of economic recovery, are unfair to ordinary Americans. Having just narrowly passed a very modest curtailment of federal spending for the poor, the Republicans flinched at being accused of passing tax cuts for the rich. The leadership plans to take up the tax bill when Congress reconvenes in December, guessing that holiday turkey and relaxation will have ended last week's recalcitrance.
The late supply-side pioneer Jude Wanniski wrote about two governmental Santa Clauses -- one bestowing spending increases and the other tax cuts. For 50 years until the supply-side revolution in the late 1970s, Republicans rejected both Santa Clauses and cemented their minority political status. It was no small matter last week that House Republicans looked like they were shooting at the tax Santa Claus.
What the House does on taxes is critical because the bill passed by the Senate not only shoots at the tax Santa Claus but inflicts a mortal wound. Capital gains and dividend tax cuts due to end next year were not extended by the bill, which inflicts what amounts to an excess profits tax on big oil companies. The House bill crafted by Ways and Means Committee Chairman Bill Thomas corrects those deficiencies. He planned to pass his bill in the House last Friday or Saturday and then prevail in the House-Senate conference on the bill when Congress returns in December.
Thomas pressed that plan in a special closed-door conference of House Republicans last Friday. But there were plenty of dissenters. They were fatigued, they said, from a Thursday night session that lasted until 1:41 a.m. to pass what was described as a Draconian spending bill but actually trimmed only $50 billion in projected increases from a $2.5 trillion budget. The spending bill passed by 217 to 215 against unanimous Democratic opposition after lacking a majority the previous week, and the members did not want immediately to undergo another ordeal.