Will Bush Have to Buck His Own Party on the Stimulus?
As Capitol Briefing wrote yesterday, some conservatives weren't thrilled with all the happy talk about a bi-partisan stimulus package.
Today the conservative Republican Study Committee unveiled its own stimulus package in hopes of influencing the current debate in a direction more amenable to the right.
The plan, dubbed the Economic Growth Act of 2008, includes four key planks:
1) Allowing businesses to immediately expense or deduct the full costs of assets they buy in the same year they buy them, rather than spreading those deductions over several years
2) Cutting the top corporate tax rate from 35 percent to 25 percent
3) Indexing for inflation the cost basis used when calculating the capital gains tax for the sale of assets
4) Simplifying the capital gains rate structure by allowing corporations to pay a 15 percent rate rather than the current 35 percent
House conservatives assembled at today's press conference told reporters that this package would be far more effective at actually stimulating the economy than handing out tax rebates to ordinary citizens -- a potential provision in a bi-partisan stimulus plan.
RSC members are walking a fine line here, and today they alternated between criticizing the current ideas under discussion and saying that rebates might be just fine, as long as Congress also moves provisions that will help businesses and investors.
"The handing out of rebate checks will have a de minimis impact on the economy," predicted Rep. Scott Garrett (R-N.J.), while Rep. Paul Ryan (R-Wis.) warned against "some press-release driven stimulus package that at the end of the day doesn't grow one job."
As for whether GOP conservatives will support the deal currently being cut by their own leaders with Democrats and President Bush, the members who spoke today wouldn't commit either way until they see the final bill.
Of course, if Bush and most Democrats are on board, the package won't need conservatives' votes to pass -- at least, not in the House. In the past, President Bush has not made a habit of cutting deals with Democrats over the opposition of his own party -- a form of political "triangulation": throwing political opponents off guard by choosing to agree with them on certain issues. (For a good historical example of this dynamic, recall President Clinton's deal with the GOP on welfare reform.)
In the end, Capitol Briefing still expects most conservatives will vote for the stimulus package even if it doesn't contain the items they want, for the simple reason that members may have a tough time politically if they vote against rebates.
January 23, 2008; 1:44 PM ET
Categories: Agenda , GOP Leaders , Purse Strings
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