Senate Republicans Kill House-Passed Bipartisan Tax Bill— Was It A Good Compromise To Begin With?

Odd couple

Trump and his allies have been working overtime to deny Biden any victories before the election. The big one everyone was talking about was the bipartisan immigration-border bill that Senate Republicans scuttled. Right wing Israelis in Netanyahu’s cabinet aligned with Trump have prevented any kind of Gaza settlement with the hope of damaging Biden, now Kamala. And on Thursday. The Senate voted down ending the filibuster on a bipartisan tax bill— co-authored by Ron Wyden (D-OR) and Jason Smith (R-MO)— that would have raised the childhood tax credit while giving business tax breaks they had been seeking from their conservative allies. It needed 60 votes to get to the floor and it only got 48, with 44 voting against.

It has passed the House 357-70 last January, opposed by the House freedom caucus nuts and a small handful of progressives who found the compromise too one-sided. On Thursday, the only Democrats to vote against it were the most conservative one, Joe Manchin and the most progressive one, Bernie. Actually both are independents who caucus with the Dems. JD “Childless Cat Lady weirdo” Vance didn’t show up to vote at all.

Dan Osborn, the independent running for a Republican-held US Senate seat in Nebraska— and who is currently leading incumbent Nan Fischer— told us that “Rejecting a bipartisan child tax credit bill for partisan gain? This is why America is sick of Washington: party politics being put over the well being of children. What a disgrace.” Fischer, as always, voted in lockstep with Mitch McConnell. If you’d like to consider helping flip the Nebraska seat— keeping in mind that the Democrats didn’t bother putting up a candidate— you can contribute to Osborn’s campaign here.

Introducing the vote on the floor, Schumer said “Senate Republicans love to talk about how they are the party of family and business. So it’s very odd to see them come out so aggressively against expanding the child tax credit and rewarding business with the [research and development] tax credit.”

Andrew Duehren, reporting for the NY Times, <> wrote<> that “The roughly $80 billion bill had seemed to have everything. It  soared through the House earlier this year with broad bipartisan support, a rare feat. Business groups loved it and hoped Congress would again allow companies to immediately deduct the full cost of capital investments and research expenses from their tax bills. And anti-poverty activists cheered its expansion of federal support for parents with children… Republican senators worried that the bill’s expansion of the child tax credit veered into creating a new welfare program, stalling the legislation... Top Senate Republicans reasoned that they may be in a better negotiating position after November’s election, when they could win control of the chamber. They chose to hold out on the House-approved bill and plan on addressing the business tax breaks later.”

[T]he decision was a disappointment to many business lobbyists. The tax breaks they sought had lapsed under provisions in the 2017 tax law; Republicans ended them as a way to contain the cost of that legislation. Because the tax breaks incentivize investment and scientific research, they are largely uncontroversial and were expected to be reinstated.

“The prolonged uncertainty surrounding the extension of these policies has curtailed American businesses’ ability to invest, compete and grow, and we urge Congress to find a path to restoring them this year,” said Watson McLeish, the senior vice president for tax policy at the U.S. Chamber of Commerce.

The legislation would have expanded a tax credit aimed at bolstering the supply of low-income housing, provided tax relief to disaster victims and laid the groundwork for a bilateral tax agreement with Taiwan.

Lawmakers had sought to cover the cost of the tax breaks by effectively shutting down a fraud-riddled program from the pandemic, the employee retention tax credit. Intended to be an incentive for companies to keep employees on payroll during the worst of Covid-19, the retention credit has instead become a magnet for bogus claims. By September, the federal government had spent nearly $230 billion on refunds for the credit, far beyond the estimated cost of $55 billion.

The Internal Revenue Service has frozen new claims for the credit for months in an attempt to address abuse of the program. The bill in the Senate on Thursday would have rejected all claims made after Jan. 31, 2024, helping generate $80 billion in estimated savings.

If you wonder like progressive stalwarts AOC, Rashida Tlaib, Jamaal Bowman, Greg Casar, Cori Bush and, on Thursday, Bernie, opposed the bill Bernie explained that though he strongly supports “restoring the expanded Child Tax Credit from the American Rescue Plan that reduced childhood poverty in America by over 40 percent,” he couldn’t in good conscience, for for the package.

“At a time of massive wealth and income inequality,” he told his Vermont constituents, “we should not be giving tens of billions of dollars in tax breaks to some of the largest and most profitable corporations in America. Incredibly, this legislation would hand out a $2 billion retroactive tax break each to Lockheed Martin and Raytheon— some of the most profitable defense contractors in the world. Further, at a time when Artificial Intelligence and automation threatens to displace millions of American workers, this legislation could provide billions of dollars in tax breaks to companies like Amazon, Google, Verizon, and Facebook to replace workers with machines or robots. Three years ago, as part of the American Rescue Plan, Congress passed an expanded Child Tax Credit that put $300 a month per child directly into the bank accounts of tens of millions of families. This provision alone lifted nearly 4 million children out of poverty. The tax bill on the floor today is only one-tenth the size of the Child Tax Credit in the American Rescue Plan and would only last for three years. When all is said and done, this bill would provide at least $3 in corporate tax breaks for every $1 in tax cuts for working families with children. That is not a good deal.”