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2010-12-16

Reps. Rush Holt and Raúl Grijalva on House Democratic Opposition to Obama’s Tax Deal with GOP

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The U.S. House of Representatives is set to vote on President Obama’s controversial tax deal with Republicans following its approval in the U.S. Senate. While taxes on the wealthy will decrease under the proposal, some tax experts are predicting taxes on the poor will actually increase. We speak to Democratic Congressmembers Rush Holt of New Jersey and Raúl Grijalva of Arizona, who say they will vote against the deal. [includes rush transcript]

Transcript

This is a rush transcript. Copy may not be in its final form.

JUAN GONZALEZ: Today the House is set to vote on President Obama’s $858 billion tax reduction deal. The Senate overwhelmingly approved the measure on Wednesday. The compromise negotiated with Republicans extends the Bush-era tax cuts for high-income earners and includes a provision to reduce the estate tax. The measure also extends jobless benefits for 13 months and cuts the Social Security payroll tax from 6.2 to 4.2 percent for one year. While taxes on the wealthy will decrease under the proposal, some tax experts are predicting taxes on the poor will actually increase because the bill eliminates President Obama’s Making Work Pay tax credit.

AMY GOODMAN: The compromise bill has met opposition from many Democrats. Last week the House Democratic Caucus approved a non-binding resolution to reject the measure. But the White House says a failure to pass the bill could damage President Obama’s prospects in 2012 and has urged them to go along with the bill. Obama has urged House Democrats to pass the bill.

PRESIDENT BARACK OBAMA: I recognize that folks on both sides of the political spectrum are unhappy with certain parts of the package, and I understand those concerns. I share some of them. But that’s the nature of compromise: sacrificing something that each of us cares about to move forward on what matters to all of us. Right now that’s growing the economy and creating jobs. And nearly every economist agrees that that is what this package will do.

Taken as a whole, the bill that the Senate will allow to proceed does some very good things for America’s economy and the American people. First and foremost, it is a substantial victory for middle-class families across the country who would no longer have to worry about a massive tax hike come January 1st. It would offer hope to millions of Americans who have lost their jobs through no fault of their own, by making sure that they won’t suddenly find themselves out in the cold without the unemployment insurance benefits that they were counting on. And it would offer real tax relief for Americans who are paying for college, parents raising their children, and business owners looking to invest in their businesses and propel our economy for.

AMY GOODMAN: Joining us to talk about Democratic opposition to the tax compromise set today — to be voted on today, Congressmembers Rush Holt of New Jersey, Raúl Grijalva of Arizona.

Congressmember Holt, let’s begin with you. Why are you going to vote against President Obama’s tax deal with the Republicans?

REP. RUSH HOLT: Well, there are many problems that I would point out with the bill, the basic fact that it shifts more of the cost of maintaining our society onto the backs of middle-income and lower-income Americans. I mean, any dollar that’s not collected from higher income means more of the tax burden shifts to middle income.

But you heard the President say, well, in a compromise, we have to sacrifice some things we care about. I’m not willing to sacrifice Social Security. And I’m concerned that this does real damage, does violence, to the rationale for Social Security. Apart from what it does to the financing of Social Security, which can be made up in future years, it does, I think, irreparable damage to the very idea of Social Security. It puts Social Security on the table as a bargaining chip along with the alternative minimum tax, the debate over whether the Bush tax cuts should end at $250,000 or a million dollars income, and with business expensing and estate tax rate. In other words, it’s just a bargaining chip, it’s just another item. And, you know, ever since 1935, Social Security has had its enemies, but it has withstood those enemies because of really the ingenious, the shrewd rationale that FDR assigned to Social Security. And this undermines that. It makes Social Security just another program, not — it does away with the idea that Treasury funds, that general funds, are not fed in to Social Security to support it. And I think a year or two in the future, the political support for Social Security will just unravel.

JUAN GONZALEZ: Well, Congressman Holt, I want to ask you precisely about that, because this is a one-year cut. Obviously, every working American will next year see, for one year, their pay — this is a sizable reduction in what they have to pay out in Social Security taxes. So then, at the end of next year, as you’re beginning a presidential election year, the Obama administration will be forced to having to increase those taxes again or may end up bending to Republican pressures to begin creating private retirement accounts as part of that two percent return, and something that Obama’s own economic adviser, Austan Goolsbee, has often advocated. Do you have any concerns about that? What will happen at the end of this one-year period?

REP. RUSH HOLT: Well, in January 2012, workers — under this proposal, under this scheme, workers would see their take-home pay go down. I’m not sure who wants to be responsible for that. So, this is called a one-year change. And any lost revenue will be replenished from the general fund, and then the tax rates would be restored to the full 6.2 percent in 2012. I’m not so sure. I mean, it — but my point is, even if you lose that revenue for one, two or three years, it could be made up. But the damage done to the idea, the political underpinning of Social Security, will be, I’m afraid, irreparable.

AMY GOODMAN: How hard is the administration lobbying you, Congressmember Holt? Were you at the White House today?

REP. RUSH HOLT: I actually stopped by the White House to take some of my constituents in to see the Christmas decorations. But I’m not — I think they realized — last weekend I had a number of calls, and I think they realized that, you know, I’m making up my own mind here and that they — and, in fact, they had to admit that I had a good point. They just said, "Well, but, you know, we have this compromise. We have to do it. We have to get money in people’s pockets by January." And I agree, we do have to get money in people’s pockets by January. But at what cost?

JUAN GONZALEZ: Well, we’re also joined by Representative Raúl Grijalva of Arizona. You are also opposed to this deal. Could you tell us why?

REP. RAÚL GRIJALVA: I think for many of the reasons that my colleague, Congressman Holt, just listed for you, but, you know, essentially, the whole notion of a compromise. I think those of us that have stood with the President on so many issues — healthcare without a public option, cap and trade without any real responsibility for companies that pollute our environment, doing more for nutrition but taking it away from food stamps — those have all been tough measures in which many of us have participated in support of the President. Now we’re asked to do one more step. And this compromise is not a compromise. It cuts at the very values that the Democratic Party and progressives stand for. It shifts the disparity of income one more time. And it puts an additional burden on programs that are vital. I think the point that Congressman Holt made about, this is an attack on Social Security. This payroll holiday begins the process of undoing Social Security.

And the idea that the President outlined and the administration outlines, that we take this compromise now and then we’ll hold the Republicans feet to the fire come 2012 on the issue of the estate tax and the issue of the two percent for the wealthiest tax break, that’s not going to happen. What’s going to happen in 2012, we’ll be confronted by the Republicans on two or three matters — one being, let’s make all of these taxes permanent. And what are we going to say at that point, once we’ve already participated in this compromise? And I think that that political potential is there. And the other one is a $900 billion deficit increase. Where is that going to come from? I can just hear the corkling coming from the new majority that’s coming into the House come January and February: "We are not going to increase the debt limit; what we are going to do is find that $900 billion somewhere." And where that somewhere is going to be: Medicare, Social Security, education, healthcare in general and other vital domestic programs. We are setting ourselves up for that fight, as well. My point is, let them own this issue of the wealthy and the tax break. I was disappointed that Congressman Weiner’s amendment to undo the estate tax and the two percent for the highest was not —- is not going to be permitted. And that just confirms for many of us that -—

AMY GOODMAN: It won’t even be permitted today?

REP. RAÚL GRIJALVA: —- a vote for this compromise -—

AMY GOODMAN: It won’t even be —

REP. RAÚL GRIJALVA: I don’t think it was — I don’t think it’s going to be voted upon.

AMY GOODMAN: So, this is the —

REP. RAÚL GRIJALVA: As I don’t think the Rules Committee ruled it as —

AMY GOODMAN: This is the push to impose a higher estate tax.

REP. RAÚL GRIJALVA: This is exactly the Sanders — right. And this is — the estate tax, I think, will be, but — taken it back to its previous levels, but the issue is much, much more fundamental. It’s about values, what we stand for. And I think this tax is not just voting on a compromise. It’s politically doable. It’s setting a tone for what’s going to happen the next two to three years.

AMY GOODMAN: I mean, you have an incredible situation here, Congressman Holt. You have many in the Tea Party base saying oppose this. You have the 2012 probable Republican presidential nominee or candidate, Mitt Romney, coming out against the bill. So, you have a situation where Obama relies on Democratic votes to pass this Republican bill. What are you going to say to your constituents? I mean, whether or not you vote for this, this is the Democratic Party.

REP. RUSH HOLT: Well, the White House is saying, "You see what a good compromise this is. We have people on the left who don’t like it and people on the right who don’t like it. It must be a good thing." And I’m saying to them, get a little sense of history here. You know, Social Security was a political masterstroke, and it has become one of the pillars of our society and of our economy. In 1935, FDR had a hard time putting this together. And there was a — it was really a shrewd rationale to say that this will be a wage insurance program where the worker will feel ownership of it. And now they’re saying, "Well, Social Security, well, some years we’ll take money from it, some years we’ll give money to it. We’ll use it to balance the budget or stimulate the economy or do something else." You know, it won’t be long for this world. And so, you know, even if you can say, "Well, the compromise, they gave a little bit to the rich, they gave a little bit to the poor," which they didn’t give much, you know, I think the long-term damage to this pillar of American society and American economy is not something we can live with. And Raúl said very well, the way this was negotiated, I think, leaves the Democrats and the President in a weaker position for future negotiations, which are sure to come just a few months from now — raising the debt limit and other such things we’ll confront. So, I can’t feel good about it.

JUAN GONZALEZ: So, Congressman Grijalva, do you expect — will there even be any symbolic votes in the House today on other aspects, or will the bill just be rammed through, as the Senate approved it?

REP. RAÚL GRIJALVA: It’s a concurrence vote, as I understand it. There might be an opportunity to deal with bringing the estate tax back to its previous levels, for it to go back to those levels under Clinton. But the issue of the two banes in this whole process — the estate tax and the two percent break for the richest — I don’t think they’ll be there. So it will be either concurrence or non-concurrence with the Senate bill, which is essentially where much of our opposition rests, you know.

And the whole talk about all — you know, yes, the middle class will receive relief, and they should. The people that are going on unemployment, or unemployment now, will get relief and will get some help. But millions of people that have been unemployed for a long period of time will see no benefit. One out of every three workers is probably going to see a tax increase, particularly those workers making under $20,000 a year. So, for them, there is no break. So, there’s a issue of equity in this whole process, and then there’s a issue of political expediency. Yes, it’s an expedient vote, but in the long term, as Rush just said, in the long term we are setting ourselves up for some very, very difficult times and negotiations that continue to take us to the lowest common denominator. I think the American people want us to stand up and fight, to show some values. And this vote, if we were to pass this, will show neither.

AMY GOODMAN: Congressmembers Grijalva and Holt, we thank you very much for being with us.

REP. RAÚL GRIJALVA: Thank you.

REP. RUSH HOLT: Good to be with you.

AMY GOODMAN: And, of course, when the Republicans come in, they’ll talk about the Obama debt, the Obama deficit.

That does it for the show. This update: Britain’s High Court today decided to grant bail to WikiLeaks founder Julian Assange. Some reports indicate he may not be freed until tomorrow, when the papers for his bail documents go through. The British judge today agreed to release Assange on strict conditions that include a cash deposit of $300,000. The bail conditions also stipulate, once freed, Assange must stay at a country house in Suffolk owned by Vaughan Smith, the founder of the Frontline Club in West London, report to police daily, and wear an electronic tag.

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