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Why House tax vote is really about drawing battle lines for the fall

By Deirdre Walsh, CNN Senior Congressional Producer
July 30, 2012 -- Updated 1220 GMT (2020 HKT)
Leaving small business owners out of the Bush tax cut extension, Rep. Kevin McCarthy, center, says, could kill small businesses. But the upcoming vote may be more about the general election than the taxes.
Leaving small business owners out of the Bush tax cut extension, Rep. Kevin McCarthy, center, says, could kill small businesses. But the upcoming vote may be more about the general election than the taxes.
STORY HIGHLIGHTS
  • Republican bill to extend tax cuts expected to pass along party lines in the House
  • Obama: If Republicans don't negotiate, they will be responsible for tax hike
  • Republicans: Tax hike on top 2% could kill 700,000 jobs
  • Both sides will use the vote to try to gain the upper hand on the campaign trail

Washington, DC (CNN) -- Republicans and Democrats on Capitol Hill are gearing up for a vote this week on a House Republican bill to extend all the current tax cuts, but the debate is really aimed at the vote that comes less than 100 days from now.

The GOP bill is expected to pass narrowly, mostly along party lines. But both political parties are using Congress' big fight over taxes to frame voters' choice in the November election.

GOP leaders' message is that anything short of renewing all the current tax rates amounts to a massive tax increase on small businesses and undercuts the economic recovery. Democrats say Republicans are holding tax breaks for the middle class hostage over cuts for less than 2% of American taxpayers.

Last week the Senate narrowly passed a bill pushed by Democrats and the White House that extends tax breaks for those families making $250,000 and under, or individuals earning $200,000 or less, but allow the cuts for upper-income Americans to expire at the end of the year.

On Thursday, President Barack Obama, fresh off the win in the Senate, joined top Hill Democrats in pressing House Republicans for a vote on that bill, saying they'll be responsible for a tax increase for all Americans.

Senate passes Democratic tax plan, rejects GOP version

"We need 218 votes in the House of Representatives -- 218 votes in the House of Representatives -- to make sure that 98% of Americans don't see their taxes go up," Obama told reporters after meeting with his Cabinet. To keep up the pressure, top administration officials will fan out around the country to push for the vote, the president said.

House Speaker John Boehner, R-Ohio, dismissed the Senate vote and calls from Democrats to pass that bill without delay. He challenged the president to drop his opposition to tax breaks for upper-income levels, saying letting them expire would only mean the weak economy would suffer more job losses.

"Mr. President, I'll tell you what -- if you want to show that you stand with American small business owners, the best thing you can do is drop your plan to increase their taxes on January 1. This small business tax hike, according to Ernst & Young, will destroy more than 700,000 jobs," Boehner said Thursday.

Bush tax cuts: What you'd pay under rival plans

Led by House GOP Whip Kevin McCarthy of California, rank-and-file House Republicans plan to carry that message across the country in the days before this week's House vote. GOP members will meet with small business owners and constituents in more than 25 "Stop the Tax Hike" events across the country.

Members of Congress, Republicans challenging Democrats for other congressional seats and aides have already launched their campaign to get the word out on social media, using the "#StopTheTaxHike" hash tag on Twitter.

House Democrats are ready for the fight -- and this time they welcome it.

Recent debates over tax rates have proven to be politically tricky terrain for congressional Democrats. Some Democratic aides and members admit that previous debates on taxes left them on the defense. Republicans were able to effectively paint the GOP as the party that fights to keep taxes low, while tagging Democrats as champions of tax increases.

After suffering major losses at polls in the 2010 election, House Democrats were split on a last-minute deal that President Obama cut with Republicans to extend all the so-called "Bush-era" tax cuts for two years during the lame duck session.

Ilinois Republican Rep. Peter Roskam argued Friday that the "only thing that's changed is that the economy has gotten softer not better."

Opinion: Taxmageddon is headed our way

Roskam, the GOP's deputy whip, predicted some Democrats would support the GOP plan.

"My feeling is that there are a lot of Democrats who are not interested in walking the plank on some symbolic roll call to show unanimity with the president, who right now is challenging whether entrepreneurs have created their own company."

Pelosi called Democratic support for that bill "a one-time thing" and argued last week that her party only supported the extension of tax breaks for higher income earners then as a price for extending unemployment benefits that were about to expire.

Two years later Democrats insist they are the ones on offense, expressing confidence that this time it's Republicans who stand to lose.

Like the GOP, they have their campaign ready. Leadership aides designed their own new media efforts -- sending messaging packets to members that include "sample tweets" (using "#middleclasstaxcuts" as their hash tag) and "sample Facebook posts." The Democratic talking points center on their message that the GOP is holding middle-class tax cuts hostage for tax breaks for the ultrarich in the top 2%. Colorful charts and graphs show how many middle-class families would see their tax burden go up if Congress fails to act.

The chief of the House Democrats campaign committee, Rep Steve Israel, D-New York, sent a memo to all his candidates arguing that voters believe Republicans are on "the wrong side of this issue." The memo cites recent polls by Pew and National Journal that show the independent voters -- who will be key this fall -- believe allowing the tax breaks for wealthier Americans to lapse won't have a major impact on the economy.

Opinion: Hardworking Americans should not be living in poverty

"By going on offense and proactively framing this debate, you will make clear to voters in your district that you are fighting for the middle class, in contrast to your Republican opponent who is again standing up for the wrong priorities: more tax breaks for millionaires, Big Oil and companies shipping jobs overseas, at the expense of the middle class." the memo states.

The Democratic Congressional Campaign Committee also announced it will hold events in advance of the vote in 15 competitive Congressional districts dubbed "Middle Class First." Democratic activists will make calls and go door to door in these critical electoral battlegrounds to highlight their opposition to the House GOP bill.

Despite Israel's advice, Arizona Democratic Rep Ron Barber, who just won a special election last month, said he's undecided on how he'll vote. He's likely to face another tough race this fall.

"I have to see what the impact would be on people back home and then I'll know better what my answer is going to be on the bill," Barber said, saying he and his staff were still evaluating the impact on small businesses and middle-class taxpayers.

But McCarthy, a former small business owner who ran a string of deli shops in California before running for Congress, zeroed in on the GOP argument he hopes will trip up Democrats worried about the economy in tight races around the country: Renewing tax cuts for only those making $250,000 and under will hurt small businesses.

McCarthy told reporters last week, "Small business is the biggest job creator in America, more so than corporations. Take the measurement from the last recession to the current one; they have created 7 million jobs and big corporations cut 1 million."

But Democrats believe this time the debate is framed in a way that helps them. Rep Chris Van Hollen, the top Democrat on the House Budget Committee, says voters now see the choice between the GOP and Democratic tax proposals as a matter of trade-offs, and are more aware now about how the cost of keeping all the tax breaks will add to the nation's budget deficit.

Van Hollen pointed to the debates over the GOP plan, which he labeled the "Romney-Ryan-Republican budget," the House-passed budget written by GOP Budget Chairman Paul Ryan that Republican presidential candidate Mitt Romney has endorsed. Van Hollen said Democrats are stressing "the price of giving tax breaks to the wealthy -- the price is paid by seniors on Medicare paying more and education for our kids getting less. It's a much sharper message."

Foreshadowing the likely political attack from the GOP, McCarthy reminded reporters on Friday that many House Democrats are already on record voting to extend all tax breaks in 2010.

"You're going to have 89 current members of the Democratic party who voted to extend the tax cuts last time who are going to have to answer why they are flip-flopping with a bad economy," he said.

One thing that's certain -- minutes, or maybe even seconds, after the gavel comes down in the House chamber, both sides will use that vote to try to gain the upper hand on the campaign trail.

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