Top Conservatives Turned Off By Tax Deal's Inclusion Of Unemployment Benefits

December 07, 2010 11:51 am ET — Matt Finkelstein

Rep. Michele Bachmann

Yesterday, President Obama reached an agreement with Republican leaders to end the stalemate over the expiring Bush tax cuts. According to the deal, all of the tax cuts, including those for the richest two percent, will be extended for two years. In exchange, Republicans agreed to lift the party's blockade on unemployment benefits, which ran out for millions of Americans last week. The parties also agreed to a reduction in the estate tax, a payroll tax holiday, and a continuation of tax relief provided in the Recovery Act.

Many progressives are understandably unhappy with the compromise, though some of their discontent is a result of the way negotiations played out rather than the final product. Meanwhile, one would expect the GOP to be thrilled with the president's acceptance of tax cuts for the wealthy, by far the biggest concession in the deal. But there are already grumblings from conservative lawmakers who oppose the extension of unemployment benefits:

Rep. Michele Bachmann (R-Minn.), the chairwoman of the House Tea Party Caucus, said Republicans could balk at voting to extend all the tax cuts for two years if it's tied to a long-term extension of jobless benefits. [...]

"I don't know that Republicans would necessarily go along with that vote. That would be a very hard vote to take," Bachmann said on conservative talker Sean Hannity's radio show on Monday.

"I think we're back in a conundrum. I think the compromise would be extending the rates for two years and not permanently, but not tying it to massive spending," she said. "We cannot add on something like a year of unemployment benefits."

In addition to Bachmann, Sen. Tom Coburn (R-OK) — the de facto leader of the Senate GOP and a past opponent of jobless aid — told National Review shortly before the deal was struck that the inclusion of unemployment benefits could influence his position. "The question [for Republicans] is: At what price are you buying?" he said.

And this morning on Fox News, incoming House Republican Conference Chairman Jeb Hensarling (R-TX) said he was "not initially thrilled about" the compromise. "With respect to the unemployment insurance, I mean we want to make sure we're dealing more with paychecks and not so focused on unemployment checks," said Hensarling. "And if we're going to extend the unemployment insurance beyond its normal level, let's at least pay for it and get this nation off its ruinous spending path."

Notably, economists say that unemployment benefits provide far more bang-for-the-buck than tax cuts. In fact, the nonpartisan CBO ranked unemployment benefits first among 11 proposals to stimulate the economy. Yet, despite receiving their top demand of tax cuts for the wealthy, conservative lawmakers still don't appear ready to take "yes" for an answer if it also means providing desperately needed assistance for the unemployed.


UPDATE: The Wonk Room previously noted: "For comparisons sake, the average millionaire will receive $103,809 in tax breaks next year if the Bush tax cuts are extended. Unemployment benefits, meanwhile, average about $290 per week."

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