McConnell: Tax Cut Deal Didn’t Work, But At Least Obama Agreed With Republicans on Taxes

At a breakfast for reporters hosted by the Christian Science Monitor, Mitch McConnell said confidently that no tax increases will get through this Congress – not even as part of brinksmanship over the debt ceiling, even though Democrats wanted to use that to get their increases.

“Let me just give you a little recent history,” said McConnell. “If you were an advocate for increasing taxes, I think you’d agree the easiest way to try to get that done would be to draw the line at people making $1 million or over,” said McConnell. “$1 million a year or over! Surely that would be something you can get through Congress, right? Well, we had that vote in December, when there were 59 –59! – Democrats in the Senate. That was the Schumer proposal. They had a majority in the House, and 59 senators, and a president who wants to raise taxes. And yet five Democrats voted with us against the Schumer proposal. They could not get a tax increase on people making $1 million and up through a Congress that they had overwhelming control of. I think I can safely say this Congress isn’t going to raise taxes. So why are we still talking about it?”

He offered more proof that taxes couldn’t be raised soon. “In fact they did the opposite” he said. “I, as you recall, negotiated in December an extension of current tax rates. They still had 59 Democrats and a 40-seat majority in the House when the vice president and I negotiated an extension of the current tax rates, and the president went around and said to do otherwise would be bad for the economy. Now, does anybody in this room think the economy is better now than it was in December? I don’t think so. So, look: Taxes aren’t going to be raised.”

That sounded to me like an admission that the tax cut deal hadn’t worked – which meant extending Bush rates plus adding sweeteners didn’t work. And that wasn’t what many Republicans were saying in January, when early job numbers pointed to a possible recovery. I asked McConnell to expand on that: If keeping the Bush tax rates wasn’t helping the economy any, why would we expect keeping those rates, or lowering them, would lead to growth?

“Well, if borrowing a trillion dollars in spending, largely on government, and over-regulating the economy, is good for the economy, we’d be in a boom time. So my view is: Quit doing what we’ve been doing. You certainly don’t want to raise taxes in the middle of the recession, which the president [agreed with] in December.”

In his responses to other questions, McConnell explained a bit more about his thinking here – tax simplification, while not possible in the debt deal (not enough time), was the way to go. “We want it to get more revenue through economic growth,” he said.

But the best question about this was about last week’s vote on the ethanol tax break. Did McConnell no longer “feel bound” by the Norquistian tax pledge position, that any vote against any tax break was in itself a vote to raise taxes? Were any tax loopholes on the table?

“I think they will be, in the context of corporate and individual tax reform,” he said. “And at the risk of being completely and totally redundant, I’m in favor of looking at both corporate and individual rates – and by the way, I think you can’t just segment out of corporate only. "

What sort of loopholes might get taken out in a deal? “We ought not to do this in a piecemeal way, just picking out things that poll-test well.”