Dems are in, tax cuts are … still in

The 110th Congress, the first session to be run by Democrats in a dozen years, officially takes office today. Expect much of the same when it comes to taxes.

Don’t get me wrong. I believe (hope) this Congress will be more equitable in its tax policy. While Dubya’s tax cuts have helped some middle- income filers, many at the lowest end of the earnings spectrum have suffered as tax cuts were made possible by program cuts that affected them the most. As for those corresponding tax breaks, most of them since 2001 have primarily benefited the wealthiest Americans.

That said, don’t expect this Congress to make a whole lot of changes, at least not right off the bat. There are several reasons we will see at least a semi-status quo.

First, the Dems are just now back in charge, and it’s a tenuous control. True, a message was sent by voters in November, but it was "move over a little" not "U-turn, please." And it was directed more at international issues (read Iraq) than domestic ones. Plus, we typically like to talk big about change, and by we I mean all of us in the
U.S., not just mouthy Texans, but when push comes to shove, we are a
bit more circumspect most of the time.

Secondly, the matter of control depends on just where you’re standing when you utter the word. Even if you don’t consider the illness and long-term recovery of Sen. Tim Johnson of South Dakota, the Democratic control is razor thin. Sure, they have a clear majority in the House, but they need both bodies to complete legislation before it goes to Dubya, who must literally sign off on any measure that makes it to his desk.

In a Wall Street Journal op-ed piece yesterday (read it here if you subscribe), the prez warned of legislative stalemate if the
Dems passed bills that were "simply political statements." So now he’s saying do as I say, not as the GOP did since he took office.

Hypocrisy Alert: Rep. Patrick T. McHenry (R-
North Carolina) has been in a full-blown snit about the transfer of
power on Capitol Hill. He’s all upset because the Democrats are planning to
run the place their way, driving the legislative agenda themselves
without any input from the Republican minority.

Ooo-kaaayyy … Isn’t
that what you guys did for the last 12 years?

Yeah, says McHenry, but he says it was different since the GOP didn’t do so in such an upfront manner. They just started doing dead of the night, back room deals on the sly once they got in.

"We didn’t
campaign on this openness,” McHenry argued. “It’s not whining. It’s a matter of calling them out on their rhetoric.”

Dubya didn’t specify exactly what might qualify as "political" legislation, so that gives him a nice big moving target, one that’s constantly up for interpretation, as he positions his veto pen.

And speaking of that veto option, Dubya has nixed only one bill so
far (stem cell research; he’ll get a chance to do that again soon, as
this is on top of the new Congress’ January agenda). If the Dems get
too "political" for his tastes, he might new a new cartridge for his
pen.

Finally, when it comes specifically to taxes, no politician of any party is ever comfortable raising them, at least not explicitly. What we’re likely to see is an effort by the 110th Congress to rein in
federal spending by reinstituting the "pay-as-you-go" rule, supported by Democrats and some conservative Republicans.

This would
require that any additional federal spending be paid for by either spending
cuts or tax increases. Any of those tax increases will likely be very targeted (for political purposes) and affect relatively small groups, albeit a lot of groups if they need a lot of revenue for a proposal. So that means we’ll continue to see esoteric, probably short-term changes to tax laws to help fund specific programs for limited times.

For example, in the next few weeks look for a House vote on legislation to repeal the tax breaks for oil companies and use the revenues to
increase investment in renewable energy. The balancing act for lawmakers is figuring out whether the irritation of big oil (and its PAC money) will be sufficiently offset by approval from Joe and Jane Motorist, who fear that gasoline will climb toward $3 again, probably just as the summer vacation driving season starts.

The real truth of taxes and Congress won’t be revealed until 2010, when any "temporary" tax cuts that are still in place then are about to expire. Of course, these temporary breaks are fewer each session as Congress continually votes to make more things permanent, which itself is a word that’s defined differently in most lawmakers’ dictionaries, but that’s another topic for another time.

In the meantime, though, during the 110th Congress’ term, don’t expect a lot of tax drama.

Just who are those people? Here are some interesting demographic facts about the 110th Congress, culled from Congressional Research Service, CQ.com, politics.ap.org
and the San Diego Union-Tribune.  

• The
  average age in the 110th Congress is 57; it’s 
  55.9 for House members, 61.7 for Senators.
• There
  are 90 women in the 110th Congress, 74 in the House, including three delegates,
  and 16 in the Senate. Nancy Pelosi, whose district includes San Francisco, will become the first female Speaker of the House.
• There
  are 42 black members of the House and one black senator.
• There
  are 27 Hispanic members of the House, including one delegate. The Senate has three Hispanic members. 
• There
  are seven Asian members of the House, including one black member of Filipino
  descent. There are two Asian members of the Senate. 
• There is
  one Native American member of the 110th Congress in the House. 
• Protestants make up the largest religious group in
  the 110th Congress. but the largest single denomination is Roman Catholics. The
  freshman class of the House has the first Muslim and the first two Buddhists to
  serve in Congress.
• There are 131
  members of the 110th Congress who have served in the military, 102 in the House and
  29 in the Senate.