POLITICS - Democratic Plan to Sway Republicans

"Private Hill Memo Instructs Dems On How To Sway GOP On Taxes" by Sam Stein, Huffington Post 7/1/2011

Excerpt

With congressional Republicans unbending in their opposition to including tax hikes or revenue increases in a debt ceiling deal, Democrats have deployed what one aide described as a strategy of maximum discomfort.

The Democratic party is set to highlight a series of tax expenditures that seemingly require an adroit defense to keep in the code. The idea is to get Republicans to agree that at least one of these expenditures should be eliminated, after which aides hope for a domino effect to occur, with similar expenditures being thrown into a final deal.

The beginnings of this strategy were on display this week, when Sen. Jeff Merkley (D-Ore.) called for ending $126 million in tax write-offs for horse racing. Even prior to that, the party spotlighted tax breaks for corporate jet owners, as well as incentives for oil and gas companies. The effort has not yielded success as of yet, but that might be because it remains in its nascent stages.

In a private memo distributed on the Hill, the centrist-Democratic group Third Way instructs lawmakers to pinpoint at least seven tax expenditures to toss in the scrap heap. The group makes the argument that these expenditures should go not strictly on policy grounds, but with an eye toward flipping the balance of the political debate surrounding debt reduction.

"Below is a list of tax expenditures – most taken directly from documents produced by Taxpayers for Common Sense – that could be fodder for further amendments that continue to give reasonable Republicans cause to break the [Grover] Norquist yoke," the memo reads. "With these tax provisions, the marvel isn’t that they cost taxpayers so much money (they don’t), but that they exist at all. And anything that can further help reasonable Republicans break free of this dangerous pledge puts us closer to a real budget deal."

The memo, which borrows heavily from the work done by the non-partisan Taxpayers for Common Sense, is being distributed to Democratic and Republican offices alike, according to a high-level Democratic source who passed the document on to The Huffington Post.

It is, in a way, a telling illustration of unity within Democratic ranks. Third Way is often at odds with the progressive pole of the party. But the fact that its research is already being put to good use by the likes of Merkley suggests that there is a shared sense that the GOP needs to be more aggressively called out for defending egregious-sounding tax expenditures.

Among the items Third Way urges lawmakers to highlight: an estimated $40 million in write-offs that owners of motorsports entertainment complexes are given; the $162 million in expensing rules for U.S. film and television productions; and $30 million (over ten years) that could be saved by eliminating a withholding provision for those lucky enough to win at horse and dog race tracks.