Republican Whip Eric Cantor delivers the weekly Colloquy

Republican Tax Travesty

Bruce Bartlett

Congress votes for a 90% tax on federally funded executive bonuses.

On March 19, the House of Representatives voted to impose a 90% tax on the incomes of certain executives of financial institutions receiving federal funds. What was remarkable about this vote is that 85 Republicans voted for this travesty. The consequences will be felt for years to come.

The history of tax policy is that it tends to go in one direction until there is a key event that establishes a new direction. Thus the vote by a Democratic Congress in favor of a lower capital gains tax in 1978 set the stage for the Reagan tax cut of 1981 and a decade of lower tax rates. When Republican George H.W. Bush switched gears and supported higher taxes in 1990 it presaged Bill Clinton's 1993 tax increase and many years of rising taxes.

George W. Bush's 2001 tax cut proved that there was bipartisan support for tax cuts that continued for several years. And I believe that when half of the Republican caucus in the House supports not just a tax increase, but a confiscatory tax increase, this shows that the wind has shifted again in favor of higher taxes.

Usually when Republicans vote for a tax increase it is because they have been pressured by a Republican president to do so and as part of a budget deal that cuts spending at the same time. But neither condition applied to the March 19 vote. It was a pure tax increase with no accompanying cuts in spending or other taxes. It wasn't required by any compelling economic necessity and wasn't even an administration initiative.

The only reason for the tax increase was outrage, stoked by faux populist right-wing talk radio hosts, over bonuses paid to executives of AIG, the insurance company at the heart of the financial crisis. That the Democrats, who traditionally support soak-the-rich policies, reacted with righteous anger against some fat cats is no surprise. That 85 Republicans joined them is remarkable and possibly unprecedented.

Particularly dismaying is the fact that supporters of the tax increase included senior members of the Republican leadership. These include Eric Cantor of Virginia, House minority whip, the No. 2 position in the House Republican leadership; Cathy McMorris Rodgers of Washington, vice chair of the House Republican Conference, the organization that represents all Republican House members; Roy Blunt of Missouri, who preceded Cantor as House Republican whip from 2003 to 2008; Adam Putnam of Florida, who served as chairman of the House Republican Conference in the last Congress; and Jerry Lewis of California, ranking Republican on the House Appropriations Committee and chairman of the House Republican Conference in the 101st and 102nd Congresses.

In addition, there were a number of Republicans who supported the increase who have in the past been among the most conservative in Congress. These include Dana Rohrabacher of California, who served as a speechwriter for Ronald Reagan in the 1980s; Peter Hoekstra of Michigan, who played a key role in developing the Republican Contract With America in 1994; and Paul Ryan of Wisconsin, ranking Republican on the House Budget Committee.

The following table presents of complete list of the ignoble Republicans who supported confiscatory taxation on March 19th.

House Republicans Voting for 90% Tax Rate

Aderholt	Cassidy	Guthrie	Miller (Mich.)	Ryan (Wis.)
Alexander	Castle	Heller	Moran (Kan.)	Schmidt
Barton (Texas)	Crenshaw	Herger	Petri	Schock
Biggert	Davis (Ky.)	Hoekstra	Platts	Shimkus
Bilbray	Dent	Johnson (Ill.)	Putnam	Smith (N.J.)
Bilirakis	Diaz-Balart, L.	Jones	Rehberg	Smith (Texas)
Blunt	Diaz-Balart, M.	Kirk	Reichert	Stearns
Bono Mack	Duncan	Lance	Rodgers	Tiberi
Boozman	Ehlers	Latham	Roe (Tenn.)	Turner
Brown (S.C.)	Emerson	Lee (N.Y.)	Rogers (Ala.)	Upton
Brown-Waite	Fleming	Lewis (Calif.)	Rogers (Ky.)	Walden
Buchanan	Forbes	LoBiondo	Rogers (Mich.)	Wamp
Calvert	Fortenberry	Manzullo	Rohrabacher	Whitfield
Camp	Frelinghuysen	McCaul	Rooney	Wittman
Cantor	Gallegly	McClintock	Ros-Lehtinen	Wolf
Cao	Gerlach	McHugh	Roskam	Young (Alaska)
Capito	Goodlatte	Mica	Royce	Young (Fla.)

Source: Clerk of the House, Roll Call 143 (March 19, 2009).

Comment On This Story

It should be noted that this legislation came up under special rules that required a two-thirds vote for passage, so Republicans could have defeated it easily if the bulk of them had opposed it.

Tellingly, none of these Republicans rose on the House floor to justify their vote before casting it. The only one I could find who even tried to defend it afterward was Rep. Tom McClintock of California, who gave this lame and unconvincing excuse for abandoning his principles: "It will slow the corporate bailouts that are bankrupting this country."

I was always taught that two wrongs don't make a right. But McClintock apparently doesn't see it that way. He thinks that because a business receives federal funds that this is justification enough for treating its employees in a grossly high-handed and punitive manner, taxing them as if it's entirely their fault that Congress voted to give aid to their company for some purpose of which McClintock disapproves.

By this rationale, how could McClintock justify voting against 90% tax rates on the executives of defense contractor Lockheed Martin or any other business that receives funds from the federal government? I don't really see the difference with AIG. In each case, Congress decided that these private companies are doing work that is necessary for the national welfare. To penalize the employees of one while letting those of another off the hook is nothing but hypocrisy.

And the hypocrisy goes beyond Congress. For many years, a group called Americans for Tax Reform has imposed a rigid and uncompromising tax pledge on members of Congress. Those signing it vow never to support higher tax rates under any circumstances.

All but eight Republicans voting to raise taxes are listed as signers of the ATR pledge. Credit goes to Joseph Cao of Louisiana, Mike Castle of Delaware, Vernon Ehlers of Michigan, John McHugh of New York, Todd Platts of Pennsylvania, Harold Rogers of Kentucky and Robert Wittman and Frank Wolf, both of Virginia, for at least having the courage of their convictions by refusing to sign the pledge; the rest obviously consider it to be nothing but a scrap of paper to be abandoned whenever the lords of talk radio demand it.

To be fair, ATR appeared to give them permission to vote for higher taxes. According to ABC News, when asked whether a vote on the 90% tax rate was a violation of the pledge, ATR President Grover Norquist hemmed and hawed and said it might be OK if other taxes were cut. But of course they weren't. Many Republicans were left with the impression that they could vote for the tax increase without violating the pledge.

Although ATR posted a denunciation of the vote on its Web site, it remains to be seen whether it or other rabid anti-tax groups like the Club for Growth or the National Taxpayers Union will make any effort to hold tax-hiking Republicans accountable. I'm not holding my breath; partisanship almost always trumps principle these days.

Ironically, Barack Obama may save the Republicans from their own craven cowardice. He and his advisers have signaled that the administration has serious problems with the confiscatory tax bill--including doubts about its constitutionality. Liberal legal scholar Lawrence Tribe thinks the 90% tax might violate the Constitution's prohibition against bills of attainder--laws that single out specific people for punishment. It's appalling that 85 Republican congressmen never gave any thought to this consideration in their rush to pander to ignorant fools.

The worsening of the government's budget deficit virtually ensures that higher taxes will be required in the not too distant future. When that day comes, Republicans will undoubtedly claim that anti-tax purity prevents them from supporting such action. However, in the case of 85 House members this won't be the case. We already know what they are; it's just a question of negotiating the price.

Bruce Bartlett is a former Treasury Department economist and the author of Reaganomics: Supply-Side Economics in Action and Impostor and How George W. Bush Bankrupted America and Betrayed the Reagan Legacy. He writes a weekly column for Forbes.

The Republican Civil War

The Republican Civil War

By Thomas Sowell

As if it is not enough that they have been decimated by the Democrats in the past couple of elections, the Republican survivors are now turning their guns on each other.

At the heart of these internal battles have been attacks on Rush Limbaugh by Republicans who imagine themselves to be so much more sophisticated because they are so much more in step with the political fashions of the time.

New Republican National Committee chairman Michael Steele's cheap shot at Rush's program as "ugly" set off the latest round of in-fighting. That is the kind of thing that is usually said by liberals who have never listened to the program.

Regular listeners to the Rush Limbaugh program or subscribers to the Limbaugh newsletter know that both contain far more factual information and in-depth analysis than in the programs or writings of pundits with more of a ponderous tone or intellectual airs.

Why Michael Steele found it necessary to say such a thing-- except as a sop to the liberal intelligentsia-- is one of the many mysteries of the Republican Party. Steele has since apologized to Rush but you cannot unring the bell.

More important, the mindset it betrays is at the heart of many of the problems of the Republican Party, going back for years, long before Michael Steele appeared on the scene.

There has long been an element of the Republican Party that has felt a need to distance themselves from people who stand up for conservative principles, whether those with principles have been Ronald Reagan, Rush Limbaugh or whomever.

The latest example is John McCain's daughter, who has said how embarrassed she is by having to explain Ann Coulter to her friends. If it wasn't for articulate conservatives like Ann Coulter, both the Republican Party and the country would be in even worse shape than they are now, for there are extremely few articulate Republican politicians who can make the case for any principle. Certainly Ms. McCain's father is not one of them.

The only time John McCain led Barack Obama in the polls last year was after Governor Sarah Palin joined the ticket. The economic collapse doomed their candidacies but McCain would have had no chance at all with another inconsistent and inarticulate Republican like himself on the ticket.

Yet many in the Republican Party seem to have felt as embarrassed by Governor Palin as they have been by others who articulated principles, instead of trying to be in step with the fashions of the time-- fashions set by liberals.

Maybe those Republicans who put a high value on being accepted in elite circles should be embarrassed by the narrowness of their elite friends, who disdain or demonize people whose principles they disagree with, instead of answering their arguments.

There has even been an undercurrent among some Republicans of a sense that it is time to move away from the image of Ronald Reagan, to update the party and court newer and less embarrassing segments of the voters than their current base.

There is certainly a lot to be said for inviting wider segments of the population to join you, by explaining how your principles benefit the country in general, and those segments in particular. But that is fundamentally different from abandoning your principles in hopes of attracting new votes with opportunism.

No segment of the population has lost more by the agendas of the liberal constituencies of the Democratic Party than the black population.

The teachers' unions, environmental fanatics and the ACLU are just some of the groups to whose interests blacks have been sacrificed wholesale. Lousy education and high crime rates in the ghettos, and unaffordable housing elsewhere with building restrictions, are devastating prices to pay for liberalism.

Yet the Republicans have never articulated that argument, and their opportunism in trying to get black votes by becoming imitation Democrats has failed miserably for decades on end.

There seemed, for an all too brief moment, that Michael Steele might have been the one to provide such much overdue articulation-- and possibly he still might, but only if he stays out of the Republican trap of trying to appease opponents by throwing supporters to the wolves.

Two Governors and the GOP Future

Republicans are faced with a dilemma.

• By KIMBERLEY A. STRASSEL

South Carolina Gov. Mark Sanford is mooted as a GOP presidential contender. During the stimulus debate he told President Barack Obama, to his face, that the Palmetto State wanted no part of a spending blowout that would be harmful to the economy, to taxpayers, and to the dollar. He even traveled to Capitol Hill to stiffen Senate Republicans against the plan.

Barbara Kelley

Florida Gov. Charlie Crist is mooted as a GOP presidential contender. During the stimulus debate, he made clear the Sunshine State couldn't wait to get its hands on the stimulus booty and joined Democratic governors to push the bill. He even campaigned with Mr. Obama in support of the $787 billion extravaganza.

As contrasts go, it doesn't get better than this. The Republican Party is locked in a debate over how it ever fell so low and what it needs to become in the future. Mr. Sanford and Mr. Crist vividly capture the divide. They also capture how the economic downturn is already forcing Republicans to choose a side.

The 48-year-old South Carolina governor is of the party wing that believes it failed in its core promise of fiscal responsibility, and in tackling the bread-and-butter issues (education, health care) that worry voters today. He's made his name partly by confronting his own party, which runs the legislature.

Nearly every year since he was elected in 2002, Mr. Sanford has proposed to cap spending at state population growth plus inflation. His state senate has ignored him. He's used his line-item veto more than 500 times, usually on pork projects. The legislature routinely overrides. Far from diminishing his standing, these lost battles have made him popular in the state.

His policies have made South Carolina more competitive. In 2005, the state passed its first-ever cut in marginal tax rates for businesses, and in 2007 broader tax relief. He's shepherded tort reform, and crafted incentives to encourage property insurers to remain in the state after a spate of hurricanes. South Carolina still has problems (in particular, education), though since 2003 it has had the 16th fastest job growth in the nation. Its unemployment rate -- the third highest in the country -- has been exacerbated by record growth in the state's labor force.

South Carolina is hurting, but Mr. Sanford argues a stimulus primarily designed to grow government will only cause sustained economic pain. He blames much of his state's budget deficit on the fact that his legislature grew spending 40% from 2004 to 2008, and he rejects a bailout that would facilitate those excesses. That thinking outraged the state's Democratic Congressman Jim Clyburn, who responded with a provision in the House version of the stimulus giving legislatures the right to circumvent fiscally responsible governors.

Mr. Crist comes from the GOP wing that believes it needs to reach new voters with "centrist" solutions. Praised by the media as a "new breed" of GOP governor (think Arnold Schwarzenegger), Mr. Crist has reached out to Democrats, and frets over such issues as global warming. His tenure has been defined by a certain economic populism, and big approval ratings (at least for now).

Elected in 2005, Mr. Crist inherited a growing state from predecessor Jeb Bush. Florida was the job-creation story of this decade, in part because of Bush policies that cut taxes and spending, unleashing private industry. One of Mr. Crist's first acts was nonetheless to demonize private insurers in the wake of Hurricane Katrina, which has caused many to flee and left the state as the primary home insurer. That's earned him love from Floridians who've enjoyed artificially low premiums, though at some point (say, when the next big one hits) the bill will come due.

To Mr. Crist's credit, he has not raised taxes, while the downturn (which hit Florida early) has forced some budget cuts. Then again, Mr. Crist's growing problem is that while government programs might sound good, they cost money and hurt business. The governor recently crafted a high-profile deal to lay out $1.3 billion to buy out a sugar company -- part of a popular commitment to restore the Everglades. It could cost thousands of jobs.

This governor, too, is having problems with his GOP legislature -- just a different sort. Last month he vetoed $365 million in spending cuts it had sent him, as it struggled to close a budget gap. Mr. Crist delayed his own budget request so he'd have time to factor in federal stimulus dollars, which will allow him to keep funding his favored programs and to avoid tax increases he had been considering.

Congressional Republicans appear to have registered an early vote in this divide, when all but three voted against the stimulus. California, where Mr. Schwarzenegger is feeling the consequences of spending and overregulation, has got many in the GOP wondering if Florida is embarking down a similar road.

Meanwhile, don't think the two governors haven't themselves noted the differences, and responded in form. Faced with GOP criticism for his support of the stimulus, Mr. Crist explained he was just trying to help "the most vulnerable in our society." Asked about Mr. Crist, Mr. Sanford was more direct. "I don't think that a lot of people down here would call him a fiscal conservative."

Republican Prophecies

Republican Prophecies

David Waldman has gone through the garbage pile:

Congress Matters: What files? The insane pack-rat files, of course. I have with me a hard copy of a collection of Republican quotes predicting doom and disaster in the wake of the 1993 Clinton economic stimulus plan, and much of the rhetoric is eerily similar to today's. Of course, that should come as no surprise, since the point of the compilation was in fact to point out that the 1993 rhetoric -- particularly on health care, which was still a live proposition at that time -- was itself eerily similar to Republican doom and disaster rhetoric during the debate on the original Social Security and Medicare legislation.

I figure this is what I've been saving this crazy thing for, after all these years. So I'm just going to type them all up here for your enjoyment. And I sincerely hope that they retain their entertainment value forever, and in particular that we all get to laugh -- not nervous tittering, but really have a carefree laugh -- at this exercise very, very soon. Some of these quotes are better ammunition than others. I think the blunt predictions of utter disaster from the Republicans in 1993 are pretty damning for the most part.... [T]he quotes on Social Security, insisting that it would be the end of a free America. Except Reagan's of course. He went there....

On the 1993 deficit reduction package:

Rep. Robert Michel (R-IL), Los Angeles Times, 5/28/93: They will rmember who let loose this deadly virus into our economic bloodstream.

Rep. Newt Gingrich (R-GA), GOP Press Conference, House TV Gallery, 8/5/93: I believe this will lead to a recession next year. This is the Democrat machine's recession, and each one of them will be held personally accountable.

Rep. John Kasich (R-OH), 8/5/93: Do you know what? This is your package. We will come back here next year and try to help you when this puts the economy in the gutter...

Rep. John Kasich (R-OH), CNN, 7/28/93: This plan will not work. If it was to work, then I'd have to become a Democrat...

Rep. Robert Dornan (R-CA), 8/5/93: The problem with our economy is that there is too little employment and too little growth. This plan will do nothing to improv that condition and will actually make it worse.

Rep. Christopher Cox (R-CA), 5/27/93: This is really the Dr. Kevorkian plan for our economy.

Rep. Thomas Ewing (R-IL), 8/5/93: ...This bill is a disaster waiting to happen.

Rep. Jim Ramstad (R-MN), 3/17/93: ...will stifle economic growth, destroy jobs, reduce revenues, and increase the deficit.

Rep. Phil Crane (R-IL), 3/18/93: ...a recipe for economic and fiscal disaster.

Rep. John Kasich (R-OH), CNN, 7/28/93: ...We have a stagnant economy and there is nothing down the road that makes it look like we're going to have the kind of economic growth that puts people to work.

Rep. Dick Armey (R-TX), CNN, 8/2/93: The impact on job creation is going to be devastating, and the American young people in particular will suffer a fairly substantial deferment of their lives because there simply won't be jobs for the next two to three years to go around to our young graduates across the country.

Rep. John Kasich (R-OH), 5/27/93: ...your economic program is a job killer.

Rep. Dick Armey (R-TX), 8/5/93: The economy will sputter along. Dreams will be put off and all this for the hollow promise of deficit reduction and magical theories of lower interest rates. Like so many of the President's past promises, deficit reduction will be another cruel hoax.

Rep. Wally Herger (R-CA), 8/4/93: The simple fact is that the Clinton plan will not lower interest rates. It will not lower inflation. It will not create jobs. And it will no lower the deficit. The Clinton tax plan will spur inflation, lose jobs, increase the deficit, and hurt our economic growth.

Rep. Deborah Pryce (R-OH), 5/27/93: The votes we will take today will not be soon forgotten by the American voter. [They] will lead to more taxes, higher inflation, and slower economic growth.

Rep. John Kasich (R-OH), GOP News Conference, Senate Gallery, 8/3/93: Come next year... we're going to find out whether we have higher deficits, we're going to find out whether we have a slower economy, we're going to find out what's going to happen to interest rates, and it's our bet that this is a job killer.

Rep. Dick Armey (R-TX), CNN, 8/2/93: Clearly this is a job killer in the short run. The revenues forecast for this budget will not materialize; the costs of this budget will be greater than what is forecast. The deficit will be worse, and it is not a good omen for the American economy.

Rep. Jim Bunning (R-KY), 8/5/93: It will not cut the deficit. It will not create jobs. And it will not cut spending.

Rep. Dick Armey, CNN, 2/18/93: I will tell you, this program will not give you deficit reduction. It will be a disaster for the performance of the economy.

Rep. Clifford Stearns (R-FL), 3/17/93: ...It will be the kind of impact that this country can't absorb. It will slow economic growth, contribute to the massive federal deficit....

Rep. Joel Hefley (R-CO), 8/4/93: ...It will raise your taxes, increase the deficit, and kill over one million jobs.

On Medicare:

Ronald Reagan: "One of the traditional methods of imposing statism or socialism has been by way of medicine." He urged his listeners to write to Congress opposing Medicare and warned, "If you don't do this, one of these days you and I are going to spend our sunset years telling our children and our children's children what it was like in American when men were free."

On Social Security:

Rep. John Taber (R-NY), 4/19/35: Never in the history of the world has any measure been brought here so insidiously designed as to prevent business recovery, to enslave workers and to prevent any possibility of the employers providing work for the people.

Rep. Daniel Reed (R-NY), 1935: The lash of the dictator will be felt and 25 million free American citizens will for the first time submit themselves to a fingerprint test.

Rep. James W. Wadsworth (R-NY), 1935: This bill opens the door and invites the entrance into the political field of a power so vast, so powerful as to threaten the integrity of our institutions and to pull the pillars of the temple down upon the heads of our descendants.