Senate Democrats

The Dam Has Broken

The Dam Has Broken: In Major Shift, 34 Senate Republicans Vote To Put Tax Expenditures On The Table For Deficit Reduction

Ethanol Vote Is Rebuke To Right-Wing Groups’ Position That All Taxpayer Subsidies Must Be Kept Off Limits

Senator Alexander: ‘A Good Way To Reduce The Debt Is To Get Rid Of Unwarranted Tax Breaks’

Rebuking right wing interest groups that have tried to keep tax expenditures off the table in the ongoing deficit reduction and endorsing Democrats’ argument that these subsidies should be targeted in deficit reduction, 34 Senate Republicans voted yesterday to end $5 billion worth of ethanol subsidies. The watershed vote means that Grover Norquist’s so-called “Pledge” has been blown “wide open” and now “makes no sense”, according to one leading Senate Republican. This opens the door to other types of revenues – as well as spending cuts – when it comes to cutting the debt – depriving Republicans of their rationale for protecting wasteful subsidies for oil companies, companies that ship American jobs overseas, and other companies that do not need the taxpayer handouts they currently receive.

Senate Republicans Endorse Getting Rid Of Spending Through The Tax Code To Reduce the Deficit

Senator Alexander Called Getting Rid Of Unwarranted Tax Breaks “A Good Way To Reduce The Debt.” But the No. 3 Senate GOP leader said Tuesday that eliminating tax breaks might be a legitimate way to solve the nation’s current fiscal crisis. ‘My view is a good way to reduce the debt is to get rid of unwarranted tax breaks,’ GOP Conference Chairman Lamar Alexander (Tenn.) said.” [Roll Call, 6/15/11]

 

Senator Cornyn Said Eliminating Subsidies “Hardly Is The Same Thing As Raising Taxes.” Even National Republican Senatorial Committee Chairman John Cornyn (Texas) agreed that eliminating subsidies “hardly is the same thing as raising taxes.” [Roll Call, 6/15/11]

Senator Kyl Said “We Shouldn’t Be Picking Winners and Losers.” “Minority Whip Jon Kyl (Ariz.), who is the Senate negotiator in debt limit talks led by Vice President Joseph Biden, said he supports killing the special tax provision as well. ‘I’m just looking at it from the standpoint of tax policy. We shouldn’t be picking winners and losers,’ Kyl said.” [Roll Call, 6/15/11]

 

Senator Grassley Noted Oil Subsidies “Enacted Nearly A Century Ago Cost The American People As Much As $114 Billion,” “And This Doesn’t Even Include The Subsidies During The Past 11 Years.” During a Speech on the Senate floor, Senator Grassley said “A report issued by the General Accounting Office in the year 2000 looked at the subsidies for the oil production. They record a 32-year period between 1968 and the year 2000. During that time frame, intangible drilling subsidy cost the American people as much as $52 billion. The percentage depletion subsidy cost the American people $82 billion. So these two provisions enacted nearly a century ago cost the American people as much as $114 billion from 1968 until the year 2000, and this doesn’t even include the subsidies during the past 11 years.” [Floor Statement, 6/13/11]

 

The GOP’s No-Tax Pledge Has Been Blown “Wide Open,” “Has No Credibility”

Senator Johanns Said The Pledge Has Been Blown “Wide Open,” Now “Makes No Sense” Whatsoever. Several Senate Republicans are angry at anti-tax activist Grover Norquist’s position on a major ethanol vote, creating a rift between one of Washington’s most influential conservatives and a Republican Party that has marched largely in lock step with his campaign tax pledges over the years. “What Grover Norquist has just done is blown his pledge wide open,” Sen. Mike Johanns (R-Neb.) told POLITICO. … Johanns — who hails from one of the largest corn-producing states in the country — said the pledge may be “very, very meaningless” because senators can now point to other measures they support that cut taxes. “It makes no sense to me whatsoever,” Johanns said. “Now it’s kind of blown open. Once it’s out there, no member will ever be caught in a bind as long as you follow the Norquist exception. And that’s what he’s done here.” [Politico, 6/15/11]

 

Senator Chambliss Said Norquist “Has No Credibility.” Some Republicans who are open to raising tax revenue have faced the wrath of Norquist — and they are none too pleased. “Grover Norquist has no credibility, so I don’t respond to him,” Sen. Saxby Chambliss (R-Ga.) told POLITICO. “He doesn’t deserve being responded to.” [Politico, 6/15/11]

 

Senator Thune Said Norquist Is Doing A “Tremendous Amount of Gymnastics” on The Pledge. “This is a tremendous amount of gymnastics to try to get the pledge to fit so they can say that this amendment is OK,” said Sen. John Thune of South Dakota. The No. 4 Senate Republican said in an interview: “I think that’s going to make it increasingly difficult for the pledge to have credibility going forward. What they’re doing here is really contortion.” [Politico, 6/15/11]

 

Senator Grassley Said The Pledge Has “A Certain Inconsistency.” Sen. Chuck Grassley (R-Iowa), one of ethanol’s biggest proponents, said “there is a certain inconsistency because there are two separate votes. … I would think an organization, in order to have credibility, has to be consistent.” [Politico, 6/15/11]

 

Senator Thune Accused Norquist of A “New Interpretation of The Pledge.” But Sen. John Thune (R-S.D.), who opposed the Coburn amendment, accused Norquist of making up a new set of rules for his pledge to give cover to Republicans who backed the Coburn amendment. “It’s a whole new interpretation of the pledge, which I think is going to make the pledge less and less relevant,” he said. [Roll Call, 6/15/11]

 

Rank And File Republicans Support Ending Tax Subsidies

 

Chambliss Says Revenue Reform Must Be A Part Of Solving Debt. “Can the folksy Georgian persuade his fellow Republicans, including his buddy Speaker John Boehner (Ohio), to embrace a tax reform package that lowers rates but raises revenue to cut the deficit? …‘John [Boehner] and I have had conversations about the fact that solving this problem is going to be very, very difficult. We have not gotten into the specifics of it,’ Chambliss said. ‘Ultimately I’m hopeful that Republicans in the House and Democrats in the House will see that this problem is so serious and the only way you are going to solve it is to look at the three pillars — cuts in discretionary, entitlement reform and revenue reform.’” [Roll Call, 4/13/11]

 

Lamar Alexander Says Federal Subsidies for Coal, Oil, and Gas “May Be too Expensive.” At a Department of Energy, Energy Innovation Summit, Tennessee Senator Lamar Alexander said, “Sometimes we get so entranced with an idea that we initiate a federal subsidy for it, and it never goes away.  We’ve done that with renewable energy, ethanol, mature sources such as coal, oil and gas. That may be too expensive.” According to Platts, “Later, on the sidelines of the conference, Alexander, the third ranking Republican in the Senate, said he may support some of President Barack Obama’s proposal to eliminate $26 billion in oil and gas tax breaks.” [Platts.com, 3/2/11]

 

Johanns: Let’s Not Take A Thing Off The Table. Johanns said, “You know when I did a letter, and got 32 Republicans and my colleague, Michael Bennet, got 32 Democrats, that letter went to the President. I was asked the same question and I said, look, let’s not take a thing off the table. We’ve got to go into the room ready to work through this. The more we take off the table, the more we say you can’t do this you can’t do that, the less chance we can solve this…I do not like tax increases. But let’s go into the room, everybody with an open mind. And let’s start working through this.” [ABC, 4/13/11]

 

Senator Mark Kirk Believes Supports Nixing Big Oil Subsidies; They’re “Doing Just Fine on Their Own.” Q: “Why can’t we start collecting royalties, finally, from the oil companies? Or do something about the subsidies that these very wealthy corporations have? Why can’t we get rid of these tax havens? Why can’t we talk about those things? Why can’t we put those on the table as well?”

KIRK: “I think we should. In the House of Representatives, I voted to wipe out many of the oil company subsidies. They’re doing just fine on their own. I think that many of the corporate welfare programs are misplaced.” [CSPAN, 3/1/11]

 

Senator Dan Coats on Deficit Reduction: “I Said Everything is on Table and That Includes Ethanol, That Includes All Subsidies.” Coats said, “I said everything is on the table. And that includes ethanol, that includes all subsidies. We have got — I’m elected here to come to Washington to make the tough decisions. And even though they go against the political grain of things, no pun intended there regarding ethanol there — I’ve talked to ethanol people. I’ve said that this is something that’s got to make economic sense.” [ABC News, 4/13/11]

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