Opinion

Is compromise possible?

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Congress wrapped up another week of the lame duck session, and, with the clock ticking closer to a massive tax increase, it is unclear whether House Democratic leadership will allow the chamber to consider the president’s tax agreement.

Yesterday, there were reports that House Democrats had voted against the tax agreement. However, this was an unofficial procedure. The Democratic Caucus held a debate and voice vote behind closed doors. What we know about this meeting are just rumors and hearsay.

We do not know where members of Congress stood and we do not know the arguments put forward. What we do know is that a majority of the Democratic Caucus wants to keep the House from debating and voting on the president’s proposal.

The uproar has even gotten to the point where liberal activists are openly discussing a primary challenge to President Obama. While there doesn’t seem to be a candidate stepping up to the plate, it indicates the level of anger over the administration’s attempt at compromise.

The major provisions of the agreement extend all current tax rates for the next two years, prevent the alternative minimum tax (AMT) from hurting 21 million taxpayers, and extend emergency unemployment compensation for 13 months. Because this is a compromise, there are portions of the agreement that I wholeheartedly support and others that I have concerns about.

I believe that extension of all the current tax rates will provide the certainty that businesses need to make long-term decisions such as hiring new workers. Most prudent businesses have been forced to plan for the possibility that their taxes would greatly increase at the beginning of the year. Some held back new investment in order to prepare for a big tax bill.

I would have liked to see these rates extended for longer than two years. Many forward-looking businesses plan ahead longer than that. We’ve reduced uncertainty, but it will only grow as the next deadline looms over the horizon.

The estate tax, or death tax, was gradually eliminated over the last decade, completely disappearing this year. However, it was set to return in full force next year. The agreement includes a bipartisan compromise that exempts estates under $5 million. This should prevent most family farms and small businesses from being hurt by its provisions.

The agreement also includes a new expensing provision for businesses that make major purchases of equipment during the next two years. This should encourage new investment and job growth early next year.

While the extension of unemployment benefits is not paid for, Congress shouldn’t wait any longer to extend this expired program. It means that in the next Congress, Republicans will have to work even harder to identify ways that we can reduce government spending. Even the most important programs should not increase our already burdensome national debt.

The agreement also includes a package of extensions for dozens of different tax credits. The president this week spoke about the need for tax reform that would simplify our complex system. While I wish that this Congress could take a closer look at whether many of these credits should be carried forward, I hope that next year we can negotiate a true reform that eliminates special-interest deductions and makes it easier for businesses and individuals to pay their taxes.

As I’ve already mentioned, this agreement has many liberals up in arms. However, many conservatives, including Sen. Jim DeMint (R-SC), have criticized the deal. Any true compromise is going to see objections from partisans.

The question is how the president will overcome these objections. Some of his allies in the House and Senate are calling for additions to the agreement. The danger here is that earmarks and special-interest provisions will be tacked on at the last minute.

With only 21 days left before the tax increase, there isn’t much time for bargaining. Some lame ducks certainly see this bill as their last chance to get something that they want. Ultimately, it could be the American people that get hurt by last-minute deal-making. If a compromise fails to pass before the start of the year, it will be the top priority of the new Republican House.

I can’t say whether the final agreement is something that I will be able to support. I hope that it will remain a sensible compromise, but we all know that you can’t count on Washington operating with any sense.

Rep. Joe Pitts represents Pennsylvania’s Sixteenth Congressional District.

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