Dozens of Democrats Defect, Join GOP on Research Tax Cut
Scores of Democrats rebuffed the White House and their own leadership on Friday, voting for a bill to permanently extend a tax cut encouraging companies to invest in research and development.
The vote passed 274-131, with 62 Democrats breaking with their party to vote with all but one Republican to pass the bill.
President Barack Obama’s administration and House Democratic leaders had panned the bill because it does not offset the cost of the tax credits. The administration issued a veto threat earlier this week.
The defections are particularly striking because at a private meeting immediately preceding the vote, House Minority Leader Nancy Pelosi of California, Minority Whip Steny H. Hoyer of Maryland, Assistant Leader James E. Clyburn of South Carolina and Budget ranking member Chris Van Hollen of Maryland sharply admonished Democrats planning to vote for the bill.
Voting “yes,” they argued, sets a precedent for a half-dozen more tax extenders Republicans plan to bring to the floor without offsets, and the budget cuts needed to pay for them will ostensibly come from Democratic priorities. Aides present at the closed-door meeting Friday said Pelosi had particularly harsh words for her colleagues inclined to defect — at one point questioning their integrity, according to a source in the meeting.
“This totally undermines any claim of fiscal rectitude. … It is such a fraud,” Hoyer told CQ Roll Call after the meeting. “I talked to some members … who said, ‘Well I’m for the R&D tax credit.’ Well I’m for it too, but I’m for fiscal responsibility.”
Pelosi, Hoyer and other Democratic leaders, citing the R&D vote, have argued that if Republicans can pass the tax credit without offsetting it with cuts elsewhere in the budget, they should do so with a long-term unemployment insurance as well.
Republicans have countered that the tax credit has been extended on a short-term basis for decades without being offset, so to ask for offsets now flies in the face of precedent.
The 62 Democrats who voted “yes” represent a wide swath of the caucus’ political spectrum, from moderate-minded freshmen to typically reliable party-liners like John B. Larson of Connecticut and Earl Blumenauer of Oregon.
Blumenauer told CQ Roll Call after the vote that he has voted in favor of the same tax credit for years, so voting against it would have been hypocritical. He also said it does not matter as much because the tax credit will not pass in this form in the Senate.
“It has been extended unpaid for 10 times. In essence, this has been extended permanently,” Blumenauer said. “I didn’t feel comfortable [voting against] something that I have voted to extend repeatedly unpaid for, like Republicans and Democrats, and because this is a broader interaction between the House and Senate, I don’t see any risk in being consistent.”