A few months back, Sen. Ron Wyden, a Democrat from Oregon, brought a bill to the floor that basically offered tax incentives to businesses and individuals. Those incentives are called tax extenders.
They include big stuff and small stuff — tax breaks for wind farms, tax breaks for schoolteachers who buy their own supplies. Tax breaks for rum producers in Puerto Rico, people who make movies, race track owners, even some breaks for people who bike to work. In other words, something for every lawmaker to take home.
This should have been a slam dunk. And at first, it was. Ninety-six senators gathered in the chamber shortly after Wyden’s speech, and all voted in favor of moving the bill forward. But two days later, this bill, with 96 out of 100 supporters, was stopped cold. To anyone watching, it might have looked like some special kind of insanity.
But Howard Gleckman, a senior fellow with the tax policy center at the Urban Institute, says look closer.
“This is all fairly well planned,” he says. “This isn’t World War I, where we kind of accidentally stumbled into a catastrophe.”
He says he does understand how frustrating it is for Americans to watch this process: “It’s either frustrating or amusing. If you actually watch this on C-Span and you don’t get the joke, it has to be very frustrating.”
That leads to things like a rally outside the Capitol on a recent afternoon of Republicans who were upset with Senate Majority Leader Harry Reid for not bringing House bills to a vote.
But underneath the seeming randomness of one day supporting a bill and the next day killing it, is a careful and precise game of politics, and neither party — on this bill or most others — knows for sure how it’s going to play out.
For the tax extenders, the writing on the wall came several hours after that first vote when Sen. Orrin Hatch, a Republican from Utah, essentially threw down the Obamacare card, bringing up the law’s much-maligned tax on medical devices.
“And yet the leadership of this body won’t allow it to be brought up free-standing or on some bill that has some chance of passage through both houses of Congress,” Hatch said.
Hatch called for a vote on whether to scrap the medical device tax by putting it onto a bill that has some chance of passage — in this case, the tax extenders bill. Pressure from Republicans carried into the next day. Majority Leader Reid finally came to the floor and said he wouldn’t do it.
Behind the scenes, staffers say Reid couldn’t afford to let the medical device tax get a vote. He has several Democratic senators in tough re-election races in states with medical device companies. No contested Democrat wants to take a position on something like that in an election year. Reid had a choice to make, and it was an easy one. His priority is to protect the Democratic majority in the Senate, even at the expense of a popular tax bill. Even at the expense of C-Span viewers shaking their heads at what could seem like kindergartners on a playground.
So, tax extenders died a quick death. But most people on the Hill say it will be back — just not until after elections.