Archive for February 16th, 2012
Sen. Mark Warner (D-Virginia), who is usually the first person in line to support a bi-partisan measure, has broke ranks and will not support the deal hammered out by House Republicans and Senate Democrats to extend the payroll tax cut. Warner has been pleading for unity on tackling the debt and deficit crisis, but believes this deal will make the problem worse.
It appears that there is enough momentum to pass the measure, but losing the vote of a moderate like Warner speaks volumes about the potential problems with the bill.
Warner’s remarks from the Senate floor can be seen below:
Warner gave five specific reasons for not supporting the measure:
1- The tax cut is not “paid for”, meaning the lost revenue is not made up in other areas, either by different tax increases or spending cuts in other sectors. This was the main complaint by House Republicans, who later conceded because they did not want the issue to become a political football in the fall election.
2- By setting this precedent, of extending tax cuts that are designed to expire, it will make the work of coming up with a solution for the Bush Tax cut expiration even harder. Democrats have long tried to phase out the Bush tax cuts to no avail. Warner warns that this will extend and already lingering fight.
3- The proposal doesn’t offer provisions to raise taxes on the rich (a deal breaker for republicans) or even a means testing provision that would allow the cut to expire for high earners. Warner said he was up to a discussion on just how high those earners have to be, but regardless it was not part of the proposal.
4- There is no mechanism to ratchet the holiday back as the economy improves. He fears there will be a “cliff” effect when then the tax holiday ends making it even harder for people who have grown accustom to the extra money in their paycheck.
5- Warner believes the plan it unfairly impact federal workers, of which there are many in Virginia.
The full transcript is after the jump: