Adam Hughes is the director of of OMB Watch's Federal Fiscal Policy program.
Congressional Republicans have seemingly been obsessed with only one thing over the last year, pulling out all the stops by doing anything at all in their power to give their friends, their campaign contributors, family farms and small businesses a tax cut worth upwards of $1 trillion.
Almost all respectable media outlets, congressional offices, outside analysts and even most Americans now understand that the fight to repeal the estate tax is not about fighting for the little guy or the needs of average Americans, but is really about a windfall welfare program for the heirs of the outrageously mega-rich—with the 18 families at the top of the list.
But outside the exclusive confines of country clubs, mahogany board rooms and private jets, the mood in the country is shifting away from the unaffordable repeal of the estate tax. A coalition of national advocacy groups sent a sign-on letter this summer urging support of the estate tax that garnered 740 organizations—a 500 percent increase over last year. What's more, editorial boards and op-ed articles have appeared all around the country in numbers never before seen opposing repeal of the tax.
Despite this noticeable shift, Sen. Majority Leader Bill Frist and a gaggle of House Republicans have been hell-bent on gutting the country's only tax on massive inheritances. Let's review: Last August, Frist announced the Senate would move to consider the House-passed full-repeal bill first thing in September. But after Hurricane Katrina hit, Frist apparently decided the biggest natural disaster in American history pre-empted even top-GOP priorities like more tax cuts for the rich.
But the GOP would not be swept away so easily. By June 2006, the disturbing images of poverty had receded from national consciousness enough to revive the push for estate tax repeal. On June 8, the Senate rejected a motion to proceed to the full repeal bill, falling three votes short. Yet the campaign pressed on. Frist immediately asked the House's top tax writer Bill Thomas, R-Calif., to draw up and pass a "compromise" proposal on the estate tax, which Thomas dutifully did.
On June 22, the House passed a phony compromise that would cost 75 percent of full repeal. But the Senate Majority Leader still could not muster the necessary votes. Still the Estate Tax Cut Caucus soldiered on, recently hatching a devious plan to throw the estate tax provision onto the long-negotiated and completely unrelated pension reform conference report at the last minute. But this attempt has failed thus far as well, as a few Republican senators and Democrats expressed their displeasure with the idea, thereby foiling that strategy.
On to plan…D? Having been unable to bring the estate tax issue before the Senate on its own merits on two occasions, and failing to slip a change in through the back door once, why not resort to using long-agreed upon bills to entice the remaining votes needed? To do so, Frist and other GOP leaders have decided to try to remove a set of popular middle-class and business tax breaks from the pension bill (called the "extenders" package) and slap them together with the estate tax in order to manipulate and pressure senators into voting for the entire package.
Brilliant! Except that plan is running into stiff resistance as well and has thrown the pension conference into turmoil. Senate Finance Committee Chairman Chuck Grassley, R-Iowa, has not suppressed his disdain for combining the estate tax and extenders bill together and other members of the conference committee, especially Sens. Max Baucus, D-Mont., and Michael Enzi, R-Wyo., are not interested in messing with the pension conference report in the first place. Baucus—who supports full estate tax repeal himself—believes the combined package will not sway any Democratic votes anyway.
What are multi-millionaire's advocates to do? The Estate Tax Cut Caucus is running out of time and options, and it appears they are losing control as the pension reform conference is on the verge of collapse. It will be difficult to top the boldness demonstrated so far in fearlessly advocating the interests of the downtrodden multi-millionaires club. Yet with a zealous House GOP leadership team going to any lengths to get their way—even boycotting meetings on the pension bill—anything could still happen.
But after all is said and done and the final outcome is known, the one thing that will remain a mystery is whether the GOP ever wanted to win a vote on the estate tax in the first place. Certainly a man of Sen. Frist's education and intelligence should realize the votes to pass such a radical proposal are not available in the Senate. Why then does the Estate Tax Cut Caucus continue to beat their heads against the wall—even to the point of jeopardizing other priorities? Perhaps the GOP is not worried about what will happen to their multi-millionaire friends after they die, but whether they will write large checks this fall.
Republicans are trailing dramatically in recent polls, have no momentum going into the midterm elections, and the estate tax has always been a major money-making, base-beating issue for the GOP. It's clear the Senate certainly has better things to be doing—like passing long-promised policies on immigration, pension, lobbying and ethics, and true budget reform—not to mention passing the annual appropriations bills. But the hubris of the GOP is currently winning out as Republican leaders squabble late into the night trying to figure out a way to bring the GOP back to Washington still in control of Congress.
