Senate Dems For High Taxes; House Passes "Audit The Fed" Bill

Today in Washington, D.C. - July 26, 2012:
The Senate reconvened at 9:30 AM today. Pending is the motion to proceed to S. 3414, the cybersecurity bill.; Senate Majority Leader Harry Reid (D-NV) filed cloture on the motion to proceed to the bill last night. If an agreement is worked out, the vote could be held today. If not, the vote is scheduled for Friday morning.

Yesterday, 51 Senate Democrats voted to pass a bill (S. 3412) raising taxes on small businesses and increasing the death tax rate.

Prior to that vote, Senate Democrats voted down an amendment offered by Leader McConnell and Sen. Orrin Hatch (R-UT), ranking member of the Finance Committee, that would have extended all current tax rates for another year.

The House reconvened at 9 AM today.  The House is continuing its debate on H.R. 4078 - "To provide that no agency may take any significant regulatory action until the unemployment rate is equal to or less than 6.0 percent."  The vote expected today will be most likely be along party lines.

The ">ARRA News Service reported on the House yesterday passing H.R. 459, the Federal Reserve Transparency Act. The bill calls for a full audit of the Federal Reserve System-- including its lending facilities and critical monetary policy operations-- passed overwhelmingly by a bipartisan vote of 327-98.  The House also passed H.R. 6082  (253-170), "To officially replace, within the 60-day Congressional review period under the Outer Continental Shelf Lands Act, President Obama's Proposed Final Outer Continental Shelf Oil & Gas Leasing Program (2012-2017) with a congressional plan that will conduct additional oil and natural gas lease sales to promote offshore energy development, job creation, and increased domestic energy production to ensure a more secure energy future in the United States, and for other purposes."  Yesterday,  the house voted down (164-261) H.R. 6168  - "Directing the Secretary of the Interior to implement the Proposed Final Outer Continental Shelf Oil & Gas Leasing Program (2012-2017) in accordance with the Outer Continental Shelf Lands Act and other applicable law."

Regarding the passage of the "Audit the Fed" bill. Rep. Ron Paul (R-TX), sponsor of the bill, responded, “It has been a long, hard fight, but Congress finally is getting serious about exercising its oversight responsibility over the Federal Reserve.  Auditing the Fed is a common sense issue supported by the overwhelming majority of the American people.  The Fed’s trillions of dollars worth of asset purchases and its ongoing support of foreign central banks cannot be allowed to continue without Congressional oversight.  Today’s passage of H.R. 459 is a good first step towards full Fed transparency, and I hope that the Senate will consider the bill before the end of the year.”

Regarding yesterday's votes on taxes in the Senate, this morning, Senate Republican Leader Mitch McConnell discussed Senate Democrats’ votes yesterday to raise taxes as the economy continues to struggle. “Last night Democrats took a vote that says a lot about the way they view the world. After nearly four years of spending and debt, millions of Americans are still struggling amidst the slowest recovery in modern times, and the economy is flat on its back. And they want to raise taxes. Under the guise of pretending to care about the deficit, Democrats are pushing an ideological goal of a symbolic tax increase that won’t even fund the government for a week. They’re not even pretending to care about the economy any more.”

Politico called the action “a largely political vote,” pointing out the Democrats’ tax hike “now heads to the Republican-led House, where it is dead on arrival.” And The Washington Post dubbed it a “largely symbolic victory for Democrats who have been pushing to raise taxes on the rich for more than a decade.”

Democrats seemed to acknowledge that the vote was more about the election than the economy. The Post wrote, “Democratic lawmakers said the Senate’s 51-48 vote is a political breakthrough that strengthens their election-year argument that Republicans are holding tax cuts for the middle class hostage in order to maintain breaks worth $160,000 a year to the average millionaire.” The New York Times’ Jonathan Weisman tweeted from a press conference Democrats scrambled to organize following the vote, “[Sen. Chuck] Schumer cuts to the chase: ‘This will be a positive day for November.’”

Addressing Vice President Joe Biden, who was presiding, and others in the chamber before yesterday’s vote, Politico notes “[McConnell] said Biden and other Democrats were flip flopping because they supported extending the same cuts in 2010. ‘So we know this is not about the economy,’ McConnell said. ‘We know this is about the election.’”

If Democrats were really concerned about the economy, why would they support tax increases now, with the economy in worse shape than when they supported extending all the tax rates in 2010? Two years ago, 40 Senate Democrats supported the bill to extend all the tax rates, but yesterday 51 voted to raise taxes. The GDP grew at 3.5% over the four quarters preceding the December 2010 vote, but grew at only 2% in the four quarters prior to yesterday’s vote. When President Obama signed the bill extending the tax rates, he said a tax increase “would have been a blow to our economy just as we're climbing out of a devastating recession.” And of course he famously told MSNBC in 2009, “You don't raise taxes in a recession.”

As Sen. McConnell additional said today, “They’re not even pretending to care about the economy. They've sort of given up on the argument that this is about the economy. We know that because two years ago the Democrats agreed that this tax increase, they're now fighting to increase -- two years ago they agreed it would hurt the economy. . . .   Yet now, when the growth rate is 2 percent -- 3.5 percent then, 2 percent now -- and 13 million Americans are still out of work, they're voting to slam nearly a million businesses with a tax increase.”

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