Rep. Pence Rewrites Bush Tax Cuts History

December 10, 2010 11:28 am ET — Kate Conway

Rep. Mike Pence

Phoning in to Sean Hannity's radio program yesterday afternoon, Rep. Mike Pence (R-IN) whitewashed Republicans' role in setting the stage for the present battles over extending the Bush tax cuts. Distorting history, Pence claimed that "the truth" is that only arcane Senate procedure caused an expiration date to be set.

PENCE: Yeah, well it's just historically inaccurate. I was there at the time these tax cuts were passed into law in the aftermath of 9-11. And look, they — we passed them under this rule called reconciliation, which when you do that in the Senate it limits the horizon to ten years for any tax policy. We were embracing what we believed would be pro-growth tax policy going forward, but it was just the arcane rules in the Senate that limited it to ten years, and that's the truth of it.

Pence's characterization is not "the truth." Republicans were forced to pass the tax cuts under reconciliation, which requires only a simple majority, because they couldn't muster the votes for their expensive (and ultimately ineffective) bill. Reconciliation also requires that the legislation in question not increase the deficit outside of the budget window, which was ten years. In order to pass the tax cuts — which will be the primary driver of the federal deficit over the next ten years — Republicans were forced to write in a 2010 expiration date. So the measure's unpopularity in Congress is really what necessitated the use of that "arcane rule" of reconcilation, a byproduct of which was the 2010 tax cut sunset. The American Enterprise Institute's Norm Ornstein explains:

When the Bush tax cuts were on the agenda at the very beginning of his presidency, Republicans in Congress and the White House made a tactical choice to avoid giving Senate Democrats the leverage that a 60-vote hurdle can provide by employing reconciliation (yes, the same tool that those who applied it then condemned roundly when it was used for health care reform this year). It was tricky to use reconciliation for tax cuts, which increased deficits when reconciliation was specifically supposed to be used for revenue-neutral or deficit-reducing programs. But the decision was made to use it for this purpose--but not to violate the proviso that the plan would increase deficits outside the budget window of 10 years.

That meant a ploy of declaring that all the tax cuts would expire entirely after 10 years, including the absurd-on-its-face provision that estate taxes would gradually decline to zero in 2010--and then be fully restored in 2011. From the day after the tax cuts were signed into law, Republicans were campaigning to extend them, in effect admitting that the policy was built around a "never mind" ruse. 

Ornstein concludes that Republicans' attempts to place blame on Democrats for causing impending tax hikes are "bemusing." So is Pence's revisionist history, which ignores that Republicans elected to use the "arcane rules" that necessitated an expiration date because it was the only way to pass their legislation.


UPDATE: It should also be noted that while Pence says "these tax cuts were passed into law in the aftermath of 9-11," the initial round of Bush-era tax cuts actually passed in May 2001.

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