Two weeks ago, the Senate killed an effort to repeal the federal estate tax on multimillion-dollar fortunes. The “no” votes were a stand for budget sanity and basic fairness. But the pro-repeal camp doesn’t want to take no for an answer.
Yesterday, the House of Representatives passed an estate-tax cut that is a repeal in everything but name. The so-called compromise would exempt more than 99.5 percent of estates from tax, slash the tax rates on the rest and cost at least $760 billion during its first full decade. Of that, $600 billion is the amount the government would have to borrow to make up for lost revenue from the cuts, which would benefit the heirs of America’s wealthiest families, like the Marses of Mars bar and the Waltons of Wal-Mart Stores. The remaining $160 billion is the interest on that borrowing, which would be paid by all Americans.
No lawmaker who voted for the compromise gets any points for moderation. Like the earlier full repeal bill, this one is unfair and grounded in intellectual dishonesty. The goal is not to pass good legislation, but to get this top priority for big-shot constituents nailed into law before the November elections produce a legislature that’s more responsible on fiscal matters.
In an attempt to rally support, House lawmakers have included in the bill another, totally unrelated, tax cut — for timber companies, worth $900 million over the next three years. The measure, based on the theory that American timber companies are at a disadvantage in the global marketplace, is essentially a special-interest giveaway that would encourage every business with international competitors to demand its own tax break. There is much to reform on the competitiveness front, but it should be done comprehensively, not on the basis of who has the senators best positioned to carve out a special deal.
The timber provision is a blatant attempt to extort “yes” votes out of four Democratic senators who have supported the timber industry in the past, but who have opposed estate-tax repeal: Senators Maria Cantwell and Patty Murray, both of Washington, Mark Pryor of Arkansas and Mary Landrieu of Louisiana. The idea is that if a few Democratic opponents can be enticed to vote for the estate-tax cuts, Republicans who have previously broken with their party over the issue might also go along, notably Senators George Voinovich of Ohio and Lincoln Chafee of Rhode Island.
All this effort for a bill that would put $760 billion in new debt on the backs of Americans in the name of making a handful of extremely rich people even richer. Congressional leaders may know how to count votes, but otherwise their math is pathetic.
A Look at Republican Priorities: Afflicting the Afflicted
At the same time that Republicans are fighting to exempt the richest estates from taxes, they are blocking a raise for the nation’s poorest workers.
Senate Democrats tried unsuccessfully this week to raise the federal minimum wage, which stands at just $5.15 an hour. It has not been increased in nearly a decade, and at its current stingy level, the rate flies in the face of Americans’ belief that those who work hard and play by the rules will be rewarded. A minimum-wage worker earns just $10,700 a year, nearly $6,000 below the poverty line for a family of three. Since the minimum wage was first adopted, there has been a long tradition of bipartisan support for regular raises. Presidents Dwight Eisenhower, Richard Nixon and George H. W. Bush all signed increases into law. Americans across the political spectrum strongly support the minimum wage, and believe it should be significantly higher. A recent poll by the nonpartisan Pew Research Center found that 83 percent of Americans favored increasing the minimum wage by $2.
Nevertheless, since 1997 minimum-wage increases have regularly been blocked in Congress. The restaurant industry and other low-wage employers that make heavy campaign contributions have thrown their weight around with great success. A bill sponsored by Edward Kennedy, Democrat of Massachusetts, to increase the minimum wage by $2.10 over two years drew the support this week of 52 senators, including eight Republicans, but Republican leaders threw up procedural barriers. And in the House, Republican leaders are not letting a minimum-wage increase come to a vote, apparently because it would pass.
Just 23 percent of Americans approve of the job Congress is doing, according to a recent New York Times/CBS News poll. These dismal ratings are no surprise when Congress’s highest economic priority is handing out tax cuts to millionaires and oil companies, and its one point of fiscal restraint is protecting employers from having to pay a decent wage to factory workers and waiters.
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