House of Labor
Drifting Right, Lincoln Comes Out Against EFCA
By Alec MacGillis
As members of Congress returned home for their two-week recess, Sen. Blanche Lincoln (D-Ark.) today wasted no time in delivering a major blow to the fading hopes of the Employee Free Choice Act. Lincoln, whose backing would be needed for the legislation to get a filibuster-proof 60 votes and who previously supported the bill, has been signaling that she is turning against it, but had not yet been as explicit as she was today at a meeting of the Little Rock Political Animals Club in Arkansas.
"I cannot support that bill," Lincoln told the club, one attendee recounted to Arkansas Business. "Cannot support that bill in its current form. Cannot support and will not support moving it forward in its current form."
Better known as card-check, the legislation would make it easier for workers to form unions.
Lincoln's shift on EFCA is not the only rightward tack she has taken in recent weeks as she looks ahead to her 2010 reelection race. She has also made headlines for a provision she put forward with Sen. Jon Kyl (R-Ariz.) that would slash the estate tax rate by raising the tax exemption from $7 million to $10 million per couple and lowering the top rate from 45 percent to 35 percent.
Proponents of the bill -- which passed 51-48 in the Senate but was not included in the House's version of the budget, and so awaits its fate in a conference committee -- say it would spare successful small businessmen, farmers and entrepreneurs from unfair taxation.
Opponents say that it would cost the Treasury $250 billion and would benefit only the very wealthiest families -- and precious few farmers and small businessmen. Already, the Tax Policy Center estimates, only the wealthiest three-tenths of a percent of estates will pay taxes under the 2009 rates, which President Obama has proposed to extend.
Underlying the debate is an interesting subtext regarding charitable giving that also placed Lincoln at odds with her president.
To help pay for expanded health care, Obama's budget proposed a decrease in the tax deductions that wealthy taxpayers -- those earning $250,000 or more -- can claim for their charitable giving and mortgage interest payments.
Opposition to the proposal was swift, as congressmen in both parties, charities and universities said reducing the charitable deduction savings for wealthy taxpayers would result in a big drop in giving. Obama countered that any decrease in giving would be minimal and that charities and universities' losses would be more than offset by the stronger economy and broader health coverage he said his plans would produce.
Lincoln seized on concerns about reduced giving in explaining why she was ambivalent about Obama's plan. In an interview late last month, she said she was worried about a drop in giving to Arkansas universities and nonprofits and didn't see the current deduction rates as inequitable. Wealthy taxpayers "get more [deductions] because they give more" in taxes, she said. "From the nonprofit standpoint, it's an incentive to give a bigger gift, and I think a lot of people do, if you look at the bigger givers."
She noted that Arkansas ranks near the top in per-capita charitable giving. Asked whether Obama's tax change would affect that giving much, considering that Arkansas ranks near the bottom in per-capita income, she said she thought it would, because, she conjectured, much of the state's giving actually comes not from average citizens but from the ranks of the big business headquartered in the state. And some of these wealthy Arkansans have been hit by the recession, too, she said. "Some of those big givers, they may not have a college fund and retirement fund like I do, but they've seen their funds cut in half, and they're going to change their giving habits somewhat," she said.
A few days after this interview, Lincoln and Kyl presented their estate tax cut -- which opponents say it would do far more to reduce charitable giving than Obama's proposed change in deduction rates would, because wealthy people would have far less of a tax incentive to give. The Center on Budget and Policy Priorities estimates that charitable giving by the wealthiest would drop about 10 percent -- a much steeper drop than they estimate will occur under the Obama giving tax changes.
Now that Lincoln has turned against it, card-check looks likely to be on hold for the time being. Expect, though, to hear much more on Congress' return in two weeks about the clashing claims on charitable giving and tax reform, at the center of which now stands Blanche Lincoln.
Posted at 5:41 PM ET on Apr 6, 2009
House of Labor
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