Blue Dogs’ Ross bristles over add-ons to bailout plan
Posted on Thursday, October 2, 2008
WASHINGTON — The Senate sent the financial bailout legislation back to the House for a second swing with new provisions designed to attract additional votes in the lower chamber, but House fiscal conservatives on Wednesday signaled their displeasure with the revamped plan.
The Blue Dog Coalition, a group of House Democrats that bills itself as fiscally conservative, split on Monday’s failed vote on the package. One of the Blue Dogs’ leaders said not to count on their support Friday, when the House is expected to hold another vote, because the changes would further deplete the U. S. Treasury.
“Harry Reid is making a huge mistake,” said Rep. Mike Ross of Arkansas, one of the group’s cochairmen, referring to the Senate majority leader. “We’re not going to be held hostage.”
To sweeten the bailout bill, especially for some of the 133 Republicans who voted against it Monday, the Senate added an extension of expiring tax credits that are popular among environmentalists and businesses and added a “patch” to the alternative minimum tax that would keep the number of taxpayers subject to it — about 4 million — constant.
That has put pressure on the Blue Dogs, who hold the House “paygo” rule dear. The rule stipulates that any changes in taxes or spending be offset, so the final result has a neutral budget effect.
Although the group has no official position, Ross predicted some of the Blue Dogs would vote against the package unless the tax changes were offset. On Monday, 25 of the group’s 49 members voted for the bill.
“Harry Reid is dead wrong to attach other things to this bill,” Ross said. “This should be a stand-alone, up-or-down vote.”
In a news conference Wednesday afternoon, Reid, a Nevadan, warned that quick passage of a rescue plan was urgent, in order to avoid further deterioration of the nation’s credit markets.
“My job is not to get things passed in the House,” Reid said. “My job is to get things passed in the Senate. All we’re trying to do is get this passed. We’re not trying to jam anyone with anything.”
Since Monday’s failed House vote, members of both chambers have reported an increase in pressure from voters to pass some sort of bailout. But Ross said he would be comfortable in voting against a plan that further increased the debt, which he said was “the underlying disease that has afflicted the American economy.”
“The American people get that.”
Ross said Reid should “bring in the cots” and prepare for a long weekend.
“All the Republicans have to do is threaten a filibuster, and he backs down.”
The alternative minimum tax, which was introduced in 1970 to make sure the superrich didn’t pile up exemptions and deductions to lessen their tax liability, has over the years applied to more middle-class taxpayers, because it was never indexed to inflation. Periodically, Congress has raised the amount of income a person can make without being subject to the tax.
The tax credits apply to research-and-development expenses, and to the development of renewable fuels, including wind, solar and biofuels, that have either already expired or will expire at the end of the year.
The credits give businesses the ability to increase their investments, and their extension gives them a predictable policy environment, argued Sen. Blanche Lincoln, a Democrat from Arkansas.
She said it would be “unfortunate” to switch votes on the bailout based on the inclusion of the tax credits. “Businesses are going to be the engines” that drive the economy, assuming the bailout keeps the economy from spiraling out of control, she said.
The Senate passed a combination of the alternative minimum tax change and tax-credit extension package last month that would have resulted in a redirection of $ 67 billion from the U. S. Treasury. House leaders, keeping to a pledge they made to the Blue Dogs to only consider bills with offsets, did not bring up the package for a vote.
It is unclear whether the addition of the tax provisions will attract enough Republican votes in the House to pass the bill, even if more Blue Dogs vote no. Robert Bixby, executive director of Concord Coalition, an Arlington, Va., group that advocates balancing the budget, said combining the economic bailout with unrelated tax provisions puts the Blue Dogs in a tough position.
“It’s a nasty legislative move on the part of the Senate,” he said. “They’re using the larger economic-rescue bill to win that fight and shove it down the House’s throat.”
Rep. Marion Berry, another Arkansas Blue Dog, could not be reached for comment. His office issued a statement, which reads in full: “I am disappointed that the Senate is using the credit crisis once again to send the House unrelated legislation that further increases the national debt. Enough is enough. It is of critical importance that action be taken to unfreeze the credit markets so that farmers, small businesses, and students can get access to loans at reasonable rates.”
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