Legislative Lowdown: Conservatives lost one battle — now let’s win the war

Brian Darling Liberty Government Affairs
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Congratulations to President Barack Obama, newly elected senators and the Republican majority in the House of Representatives. Conservatives should not be sore losers. Congratulate the victors and move on to the next battle.

The 2012 election was a significant battle in the war of ideas, yet not the dispositive conclusion of a long war. President Obama vanquished Mitt Romney in this battle of ideas, but there will be others. The proxy war against big government will be fought again in 2014 and 2016.

Conservatives shouldn’t shrink from the fight. We should dig in deeper and fight harder. We will fight the left and our own establishment, who will want to lay down arms and negotiate a peace. Conservatives will never stand down from the fight to preserve freedom and liberty. We declare that we will be the defender of the taxpayer, so that the insatiable federal government is not allowed to consume more and more of your hard-earned cash.

Mike Needham, CEO of Heritage Action for America, was spot on when he declared, “We are in a war. We are in a war to save this nation. And abandoning our post will condemn it to a future of managed decline.” Needham stresses that this is a continuing war that will be fought over the next few years.

Ed Feulner, the president of The Heritage Foundation, was also correct when he said that, “in Washington, there are no permanent victories or permanent defeats, just permanent battles. Now is the time to stand up and declare we will continue to fight against big government and for freedom.” We should be happy and respectful warriors for freedom.

Tax hikes coming

Next week, Congress will start work on a lame-duck post-election session of Congress. House Republicans received a mandate from the American people to continue with low-tax, small-government policies. They shouldn’t cave on taxes, government spending and increasing the debt ceiling without specific cuts to government programs.

On taxes, the battle will be over two big issues and a number of smaller issues. First, what elements of the 2001/2003 tax cuts will Congress retain and continue. President Obama may push for an extension of his payroll tax cut and an extension of the lower tax rates for individuals making under $200,000 and families making under $250,000. House Republicans will want an extension of all the tax cuts, with the possible exception of the temporary 2% cut to Social Security taxes.

The second big-ticket tax item may be a push by the Obama administration to request a tax hike, in the form of the elimination of tax deductions for businesses and individuals, to raise new revenues to pay for an elimination of the scheduled $55 billion of domestic cuts and $55 billion of automatic defense cuts (the Sequester).

Furthermore, the Alternative Minimum Tax will be on the table, in addition to the annual tax-extenders package that provides numerous special-interest tax-relief provisions for businesses. All of these tax issues will make for a complicated lame duck.

Spending cuts averted

On the spending side, the Sequester is scheduled to kick in. The Obama administration wants to use those scheduled cuts included in the 2011 debt-limit deal as leverage to get Republicans to violate theATRtax pledge.

The Americans for Tax Reform Pledge should be the standard conservatives use in the House and Senate when entering negotiations. They should “oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses” and “oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.” If they want to eliminate deductions, they need to do so using dynamic scoring to allow economic growth to raise revenue in years two and three of any tax reform package. Any deal should not raise one cent of revenue, i.e. taxes, in the first year.

The administration is also expected to request an extension of unemployment benefits and the Doc Fix, the reimbursement rate for Medicare participants. Conservatives need to make sure liberals find cuts to pay for this new spending.

Debt limit hiked again

One emerging issue for the post-election lame-duck session of Congress is an expected request by the Obama administration for a hike in the debt ceiling. Conservatives need to make sure that this debate is divorced from the tax-and-spending issues. If they are all mixed together, the final deal will be a disaster for conservatives.

Bottom line, let’s go to war on liberal ideas that grow government, increase taxes and increase the lending authority for administration officials if they refuse to agree to specific, deep, immediate cuts to spending programs.

Brian Darling is Senior Fellow for Government Studies at The Heritage Foundation (heritage.org).