Republicans are intent on moving ahead with legislation to make permanent six tax extenders, which expired at the end of last year, at a cost of nearly $400 billion. As I pointed out last week, this position is hypocritical because Republicans have demanded spending offsets for every policy Democrats have proposed during the last few years. But when it comes to tax cuts, that rule no longer applies, apparently.
"We have essentially been allowing an R&D tax credit since 1981 in this country,” House Majority Leader Eric Cantor said on Monday about one of the six tax extenders. “So let's just call it what it is and make it permanent so that we can get back on the path to growth. Addressing growth, addressing our unfunded liabilities connected with entitlement programs—that is the sure way to reduce deficits and reduce the debt burden."
Read that last sentence again, except imagine Cantor used it in support of extending unemployment insurance instead of a deficit-increasing tax cut. It works perfectly. In fact, because the UI extension is temporary and the Republican tax cut is permanent, it makes even more sense. But that's not how Cantor sees it.
I disagree with Cantor’s stance on using spending cuts alone to solve our long-term debt problems, which have shrunk considerably, but I agree that making the tax extenders permanent, or renewing unemployment insurance, isn’t going to create a debt apocalypse. If Cantor believes, as his quote suggests, that a $378 billion tax cut is okay because our entitlement programs are the driver of our long-term debt, then surely a $9.7 billion extension of unemployment benefits, which includes a partial spending offset, qualifies as well.
But Cantor has refused to put the UI extension on the House calendar, repeatedly demanding a job creation measure in any bill. In fact, the Congressional Budget Office found that extending unemployment benefits would provide a minor boost to the economy. Regardless, a separate job creation measure has no bearing on the policy rationale for renewing UI.
Why does Cantor really oppose extending UI? Let’s return to the 2011 fight over unemployment benefits. Here’s Cantor then: “What I have said all along, Jim, is if we’re going to spend money in Washington, we better start to make choices and we’ve got to set priorities. If we’re going to spend money, we better cut it somewhere else.”
Cantor’s position on the tax extenders, which are a form of government spending by another name, contradicts his final sentence. That may be okay, if Cantor has evolved since 2011 and decided that deficit spending is sometimes acceptable, as I believe it is. But he can’t simultaneously argue for deficit-financed tax cuts while opposing an extension of UI over long-term debt fears.
Cantor either was right in 2011 and will demand a spending offset for the tax cuts, or he’s right now and supports an extension of UI without an offset. He can’t have it both ways.