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December 19, 2010

Clarice's Pieces: This (Class) War Is Lost

By Clarice Feldman
Rev. Senator Harry Reid famously said before the Bush surge in Iraq, "This war is lost."  It wasn't.  But you could take one look at his face Thursday night, the anniversary of the Boston Tea Party that signifies the American revolt against Great Britain.  Reid's expression said as plain as day that the Democrats' old stock in trade, class war, is lost -- at least for now.

First to fall was the Omnibus Bill, the reason for Reid's downcast visage.  It was, tweeted internet wit Iowahawk, a "Turporducken."  "Pork, inside a lame duck, baked inside a gigantic turd."

If you wonder why such a two-thousand-plus-page monstrosity was ever proposed in the lame duck Congress after the November rout, when voters made clear they wanted profligate government spending halted, here's why.  In order to get agreement to the many outrageous new items of government spending before year's end, Reid had bribed senators on both sides of the aisle with countless earmarks to sweeten the bill and get their votes.

The idea is that when the voters learn of the giveaways and scream, their senators can mollify them with the earmarks, telling them how much bacon they brought home.  But the pressure brought to bear by the Tea Party stiffened the spines of the Republicans and maybe even of several Democrats, forcing Reid to pull the bill and keep it from a floor vote. Who wants to be the last to die politically for a Turporducken?  The countless sad goodbyes to defeated colleagues focused a lot of senatorial minds.

The Tea Party did this, though it has from its inception been derided by the elites and media as know-nothings and racists.  The Tea Party's impact came despite the pundits' claims that the revolt was over and that the party was impotent and torn apart by internal strife.  It doesn't look to me like it's getting weaker.  I think it's growing in adherents and strength.  That's a good thing.  Short of actually erecting gibbets on Capitol Hill, the Tea Party must not let up the pressure if they hope to keep Congress focused on cutting spending.

Candidate Obama long ago conceded that he was more interested in "fairness" than raising revenue when it comes to taxing upper-income people.  His party, which had insisted on ending the Bush tax rates, had to bow to the reality that a sharp tax increase would worsen the economy.  Democrats wanted to do this to punish those they called "wealthy," which they defined as any couple earning more than $250,000 a year.  The most adamant class warriors among them are furious, but the desire to win reelection in 2012 proved more powerful than retribution for both president and Congress.

To be sure, the Republicans, not a majority in the House until January, had to concede some things to keep the tax tab down for us.  But they actually gave up a lot less than some critics of the deal might think.

Tom McClintock laid out the bargaining positions and outcome rather neatly:

House Chamber, Washington, D.C. December 16, 2010.

M. Speaker: I commend the Senate for passing the tax relief measure yesterday, and I hope that the House passes it today.  According to the CBO, this bill comprises $136 billion in additional spending and $721 billion in tax relief.  That means fifteen percent of this bill is spending -- the other 85 percent is tax relief:

  • No across the board increase in income tax rates next year.
  • No AMT biting deeper into middle class families.
  • A Death Tax that's a third less of what it would otherwise have been -- threatening far fewer family farms and family businesses with extinction.
If this relief fails, when the ball drops at Time Square on New Year's Eve, Americans will have just been walloped by a tax tsunami the likes of which we haven't seen since Smoot-Hawley.  Families and small businesses will be spending the New Year struggling to pay thousands of dollars of new taxes.  

A family making $50,000 will see at least $3,000 more taken from its paychecks.  A small businessperson whose shop makes $300,000 will have to cut another $8,400 -- perhaps the difference between a part time and a full time job for an employee.

From the Left we're told that we should raise taxes on the very rich who make over $200,000 because they don't pay their fair share.  According to the IRS, those folks earn 36 percent of all income; they pay 49 percent of all income taxes.  A lot of them aren't people at all -- half of the income earned by small businesses will be hit by these tax increases.  These are the job generators that we're depending upon to end the nightmare of unemployment for millions of American families.

To confiscate billions of dollars more from them and expect more jobs to come of it is simply insane.  Some of my fellow Conservatives object to the 15 percent of this bill that spends money we don't have.  I agree.  But that damage can be corrected through offsetting spending reductions next year.  The new Republican House majority can do so without the Senate or the President -- simply by refusing to appropriate funds -- and it's committed to doing so.  But it cannot rescind the taxes next year without the Senate and the President, who have made their opposition to just such a clean bill abundantly clear.  And even if such a retro-active bill could be passed by Spring, these families and businesses won't get their tax overpayments refunded to them until they file their returns a year later.  Massive tax increases under Hoover turned the recession of 1929 into the depression of the 1930's [sic].  Let that not be the epitaph of this Congress.  [Emphasis added.]

How angry was the left at this concession, which undercuts decades of the open class warfare by the Democrats?  So angry was she that House Speaker Pelosi skipped the vote and the presidential signing ceremony which took place just hours after the bill's passage.  If you think this was not a major victory, remember that shortly before the presidential election in 2012, the Democrats will be faced with whether they will again agree to extend the Bush rates.   How are they going to keep arguing that the Republicans are for tax breaks for the rich, for special favors to them, when they have just conceded that taxing the rich at a higher rate is detrimental to the economy and not a revenue-enhancer in any event?  

Moreover, with the tax cut settled, the Democrats' fanciful projections of vast streams of new income to fund their extravagant legislative fancies are now proven a naked lie.  Unless the economy and employment pictures improve dramatically, I can't see how federal revenues will rise significantly.  This means the arguments for drastic budget and program cuts are strengthened.

But Obama's terrible, horrible, no-good, miserable week was not yet over with passage of the tax bill and the death of the omnibus bill.

In Florida, Judge Vinson, overseeing the twenty-state challenge to ObamaCare, showed that he was no more impressed with the government's arguments respecting the constitutionality of ObamaCare than was Judge Hudson in Michigan, who ruled the requirement that Americans buy health insurance unconstitutional..

Even if broccoli is good for you and might hold down health costs nationally, Vinson suggested, the government has no right to require that we buy it.  The individual mandate looks to be on its last legs.  It remains to be seen how much of the rest of the act will fall with it and whether the Hudson and (anticipated) Vinson rulings further inspirit the Republican house in January to cut ObamaCare funding and move to repeal the law before more damage is done to our national health care system.

Instead of using our health care system to further redistribute wealth, maybe the new Congress will take the few needed steps to deal with some shortcomings -- far simpler suggestions like, for example, a national plan to provide insurance coverage for persons who cannot otherwise obtain it because of preexisting conditions, and tort reform, the absence of which drives up medical costs.

Professor William Jacobson underscores the extent of this week's victories:

For the first time in my adult life, Harry Reid has failed, utterly.

What does this mean for the $1 billion slated for ObamaCare start-up costs?  It's history in the new House, and sets up another confrontation when the House produces a budget effectively defunding ObamaCare in its infancy.

Will Reid threaten another government shutdown over, or will Obama refuse to sign, a budget that does not fund a penny in ObamaCare costs?  Stay tuned for a few months.
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