Internal disputes on taxes spread to GOP

Democratic and Republican leaders are wrestling with internal party
schisms over the tricky issue of tax policy in the run-up to the
midterm elections. 

House Minority Leader John Boehner (Ohio) on Sunday exposed a split within the GOP after suggesting he could support raising taxes on the wealthiest individuals — exactly what President Obama wants to do.

{mosads}But Democrats face internal disagreements of their own, complicating the party’s political strategy for the fall.

Senate Majority Leader Harry Reid (D-Nev.) on Monday blasted Republicans for supporting “giveaways for millionaires,” even though some influential members of his caucus support extended tax relief for the highest-income families.

Boehner suggested in a television interview Sunday he could support tax increases for the rich — if it were the only way to pass tax relief for middle-class families passed under George W. Bush.

GOP critics pounced, saying Boehner had given up crucial leverage even before the debate began.

“It’s very concerning,” said a Senate Republican aide. “It signals at least a rhetorical retreat before the fight has even begun on full extension of the tax cuts.”

Some Republicans grumbled that Boehner was giving Obama’s tax plan momentum at a time when Democrats are running away from it.

Democratic divisions over whether to extend the cuts for all taxpayers or just for families earning less than $250,000 a year — the plan Obama favors — have been apparent for months.

Sen. Joe Lieberman, a self-described Independent Democrat, issued a statement Monday expressing strong support for extending the Bush tax cuts.

 “I don’t think it makes sense to raise any federal taxes during the uncertain economy we are struggling through,” Lieberman said.

Democratic Sens. Jim Webb (Va.), Ben Nelson (Neb.), Evan Bayh (Ind.) and Kent Conrad (N.D.) have also expressed support for extending tax relief for families earning over $250,000.

In the House, four Democrats, Reps. Gary Peters (Mich.), Jim Matheson (Utah), Melissa Bean (Ill.) and Glenn Nye (Va.), have begun circulating a letter among colleagues asking Speaker Nancy Pelosi (D-Calif.) to extend all of the Bush-era income tax cuts.

The tax cuts are due to expire Dec. 31.

The internal debate on the Republican side also gathered force on Monday, highlighting differences between the party establishment and conservative lawmakers who are more closely aligned with Tea Party voters.

Republicans allied with the party establishment sought to downplay the controversy, while groups that have backed conservative GOP candidates blasted Boehner’s judgment.

“He was very clear that we shouldn’t raise taxes, and he was very clear he would support doing so if it was the only option,” said a Senate GOP leadership aide.

Other Republicans were less forgiving.

“I think it’s a huge mistake; he’s caving to the Democrats,” said Andrew Roth, vice president of government affairs at the Club for Growth, a taxpayers’ advocacy group that has backed conservative candidates such as Rand Paul in Kentucky and Joe Miller in Alaska.

{mosads}Tim Griffin, a Republican running for the House in Arkansas, said he would not support raising taxes on families earning more than $250,000 under any circumstances.

“No, I don’t think raising taxes on families and folks that create jobs, and especially small businesses, is a good idea,” he told The Hill.

Brian Darling, director of Senate relations at the Heritage Foundation, a conservative think tank, also questioned Boehner’s strategy.

“It seems like a strategic mistake to agree to vote for only a partial extension of 2001 and 2003 tax cuts,” he said.

“If you take that out, it seems unlikely or impossible to get the other tax cuts extended. You’re taking away leverage from Republicans.”

Boehner re-emphasized his support for extending all of the Bush tax cuts in a Twitter post Monday.

On Monday, other Republican leaders gave Boehner’s controversial admission little support. They insisted on extending tax cuts for all income earners and showed no willingness to accept a Democratic ultimatum.

Senate Republican Leader Mitch McConnell (Ky.) on Monday introduced legislation to shield all taxpayers from rate increases. He argued that many small-business owners would be hurt by the Democratic tax plan.

“I will do everything in my power to stop President Obama and Speaker Pelosi from raising taxes on working families, small-business people and investors,” said House Republican Whip Eric Cantor (Va.) in a statement Monday morning.

“Raising taxes in this environment is a non-starter for me and millions of American small-business people who are struggling to keep the lights on and meet their payroll obligations.”

Senate Republican Whip Jon Kyl (Ariz.) told reporters that the Senate GOP conference held a meeting shortly before the August recess during which all members pledged to oppose tax increases for any Americans, including the wealthiest.

Democratic political strategists chortled over the different messages.

The Democratic National Committee blasted out a mass e-mail titled “Boehner v. McConnell?,” quoting a McConnell aide pledging unified Senate Republican opposition to any tax package that increased rates for families and businesses earning more than $250,000.

But Grover Norquist, president of Americans for Tax Reform, a leading anti-tax advocacy group, defended Boehner.

He said that Democrats have no intention of extending tax relief for middle-class earners and Boehner has called their bluff.

Norquist argued that Republicans would fall into a Democratic political trap if they pledged to block middle-class tax cuts in an effort to extend relief for families earning over $250,000. Such a position would play into Harry Reid’s talking points, he argued.

“Boehner’s position is exactly correct,” he said.
 
Jay Heflin contributed to this story.

This post initially contained an incorrect title for the Heritage Foundation’s Brian Darling. It has been updated.