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House Passes 1.1 Trillion Dollar Spending Bill / New York Times

In Defeat for Tea Party, House Passes $1.1 Trillion Spending Bill

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Speaker John A. Boehner on Wednesday after the vote on a spending bill that left some conservative groups fuming. J. Scott Applewhite/Associated Press

WASHINGTON — The House voted overwhelmingly on Wednesday, 359 to 67, to approve a $1.1 trillion spending bill for the current fiscal year, shrugging off the angry threats of Tea Party activists and conservative groups whose power has ebbed as Congress has moved toward fiscal cooperation.

The legislation, 1,582 pages in length and unveiled only two nights ago, embodies precisely what many House Republicans have railed against since the Tea Party movement began, a huge bill dropped in the cover of darkness and voted on before lawmakers could possibly have read it.

The conservative political action committee Club for Growth denounced it and said a vote for it would hurt any lawmaker’s conservative scorecard. Heritage Action, the political arm of the Heritage Foundation, castigated it as a profligate budget buster that is returning Washington to its free-spending ways.

“Has Congress learned nothing from the Obamacare disaster?” said Jenny Beth Martin, national coordinator of the Tea Party Patriots. “We need members in the House and the Senate who are willing to keep their campaign promises, stand up for the people and protect Americans from Washington’s tax, borrow, spend and spend and spend mentality.”

The response in the Republican-led House was a collective shrug, with 166 Republicans voting for it and 64 opposing it. The Senate, controlled by Democrats, is expected to pass it easily this week.

“If I started voting how they want me to, versus what I think is right, then they’ve already won,” said Representative Mike Simpson, Republican of Idaho, who is dealing with one of the best-financed Tea Party challenges of this campaign year. “Eh, it is what it is.”

The budget process that is culminating in the passage of the spending bill has ushered in a remarkable marginalization of the Republican far right. After a politically disastrous 16-day government shutdown last fall, the House voted 285 to 144 to reopen the government on Oct. 16. Only 87 Republicans voted yes; 144 voted no.

The legislation that reopened the government set the parameters for a broad budget deal that was again denounced by conservatives. But in December, that deal passed the House 332 to 94, with 169 Republicans backing it. That budget blueprint yielded more than 1,500 pages of fine print.

For the most ardent conservatives, the spending bill passed by the House on Wednesday represented a tangible backslide from fiscal discipline, a $45 billion increase in spending compared with where the budget would have been had House Republicans let another round of automatic spending cuts take effect.

Yet it passed the House with an even greater margin — and even more Republican votes.

“Our people learned a lot of tough lessons in the last year, and I think you’re seeing the tough lessons applied,” said Representative Tom Cole, Republican of Oklahoma.

In the process, Speaker John A. Boehner has reasserted control over his fractious Republican conference, leaving his far-right flank angry and isolated. The speaker’s public and private denunciations of the outside conservative groups have created conditions in which members must choose sides, and they have.

“The Tea Party groups and conservative movement in America gave the speaker his speakership, and I think it’s time for us to be grateful for what these outside groups have done,” said Representative Raúl R. Labrador, Republican of Idaho, who has remained in the Tea Party camp.

But most have aligned with the speaker in what Republican leaders say is a growing realization that incremental moves toward governance are better than the purist, ideological stands demanded by the right.

“We can push large ideas out of the House and say, ‘This is what we feel is the right thing to do,’ but if we’re going to actually move things, they’re going to have to be smaller things,” said Representative James Lankford of Oklahoma, a member of the Republican leadership.

The Heritage Foundation drafted a lengthy to-do list for the huge spending bill, which included prohibiting funds to build a prison in the United States to house detainees from Guantánamo Bay, Cuba; eliminating all money for Vice President Joseph R. Biden Jr.’s cherished high-speed rail projects; cutting the operating budget of the Fish and Wildlife Service; providing money for private school vouchers for the District of Columbia; and significantly reducing the Internal Revenue Service’s budget, with language requiring more oversight of the potential targeting of political groups.

All of those requests — about half the to-do list, in all — were carried out, and yet Heritage Action demanded a “no” vote.

That ideological purity has lost its power.

“They’re going to have their various metrics,” said Representative Greg Walden of Oregon, chairman of the National Republican Congressional Committee. “What we need to be able to do is go home and explain what’s inside the bills and why they matter.”

Chris Chocola, president of the Club for Growth, said Wednesday that his group’s influence had not waned, but that the budget process had highlighted that “we’ve got work to do.”

“We’d love to put ourselves out of business,” he said, “but until you get a majority of economic conservatives, you’ve got to keep fighting.”

That will not sit well with Republicans now more willing to speak out against such groups.

“I hope they spend some time trying to win the United States Senate and working with us when we have a nominee to win the presidency,” Mr. Cole said. “But I don’t think condemning Republicans who are making amazing progress in a challenging environment is the appropriate thing to do.”

A version of this article appears in print on January 16, 2014, on page A18 of the New York edition with the headline: In Defeat for Tea Party, House Passes $1.1 Trillion Spending Bill. Order Reprints|Today’s Paper|Subscribe

Are Americans ready to pay taxes on Amazon.com?

By /NYT

 

WASHINGTON — Legislation that would force Internet retailers to collect sales taxes from their customers has put antitax and small-government activists like Grover Norquist’s Americans for Tax Reform and the Heritage Foundation in an unusual position: they’re losing.

 For years, conservative Republican lawmakers have been influenced heavily by the antitax activists in Washington, who have dictated outcomes and become the arbiters of what is and is not a tax increase. But on the question of Internet taxation, their voices have begun to be drowned out by the pleas of struggling retailers back home who complain that their online competitors enjoy an unfair price advantage.

Representative Scott Rigell, Republican of Virginia, calls them “the hardworking men and women who have mortgaged their homes to buy or to rent a little brick-and-mortar shop.”

And each time Mr. Norquist and others in the antitax lobby take a loss, they start to seem more vulnerable, Republican lawmakers acknowledge, with ramifications for the continuing fights on the deficit and the shape of the tax code.

“I have a lot of constituents saying to me, ‘Grover Norquist did not elect you,’ ” said Representative Steve Womack, Republican of Arkansas and the author of the Internet tax bill in the House. “Members that come to Washington and kowtow to special interests end up contributing to this very polarized government. These are tough decisions we have to make up here.”

The legislation cleared its final procedural hurdle Thursday evening on a bipartisan Senate vote, 63 to 30. Final Senate passage is scheduled for May 6, and that tally is likely to be even more strongly in favor. Earlier test votes won as many as 75 yeses. And House action, once seemingly unthinkable, may be unstoppable.

“I have some concern about the legislation,” said Representative Bob Goodlatte of Virginia, chairman of the House Judiciary Committee, which has jurisdiction on the issue, “but we also recognize the fairness issue — certain items being taxed in certain circumstances, other items being not — is a problem for brick-and-mortar businesses, so we’re going to try and solve that.”

The Marketplace Fairness Act would allow state governments to force Internet retailers to collect sales taxes from their customers and remit the proceeds to state and local governments, just as brick-and-mortar retailers have done for decades. The states would be required to provide free software that would be embedded in retail Web sites to do the calculations.

Mr. Norquist, whose organization maintains the antitax pledge that virtually every Republican in Washington has signed, calls it the “Let People in Alabama Loot People in New York Act.” To him, the bill is a money grab by cash-poor state and local governments that would get the power to tax consumers who do not have the power to vote them out of office.

“It reduces the pressure on governments to offer the best services at the lowest cost,” he said in an interview. “We think it’s a very, very bad idea.”

His group has suggested that a yes would violate the taxpayers’ pledge, although Mr. Norquist has been cautious about whether passage of the law would constitute a tax increase, since consumers are already supposed to pay sales taxes even if a merchant does not collect it.

The Heritage Foundation and its more overt political arm, Heritage Action, have made no such equivocations. It is making a yes vote a black mark for a lawmaker on Heritage’s conservative scorecard, urging its members to call their representatives and senators, “pretty much everything we can,” said Dan Holler, a spokesman for Heritage Action.

Many Republicans have just shrugged. Supporters of the bill include Tea Partyconservatives like Senator Ron Johnson, Republican of Wisconsin, and Republican leaders like Senator John Thune of South Dakota. They argue that the bill, which could generate as much as $24 billion in new tax revenues, is not a tax increase at all. It only ensures that taxes already owed are actually paid. Most states collect 4 to 7 percent on retail purchases.

“It’s obviously an issue that can be divisive for Republicans because a lot of the antitax groups are weighing in against it,” Senator Thune said. “But in states like mine where you’ve got a lot of smaller retailers trying to compete in smaller communities, people are going to do their business online, and that has grown dramatically over the last few years.”

The real pull has come from personal experiences back home, and the emergence of reliable Republican business voices who have provided a rare counterargument to the activists in Washington.

For Senator Roy Blunt of Missouri, it is a bridal shop in St. Louis where customers try on dresses, check the labels for the product code, and then order the same product online, free of sales tax.

For Representative Austin Scott, an ardent conservative Republican from Georgia, it’s Ken’s Trading Company, where the profit margin on a Leupold rifle scope is lower than the sales tax too many Georgians are avoiding by shopping for the same scope on their computers.

”We respect their opinion. I’m glad they’re there as conservatives,” Mr. Scott said of the antitax groups. ”But the fact of matter is, in the end we have a job to do.”

For opponents of the bill, the impotence of the antitax arguments has been a revelation.

”I don’t think any one group drives an issue. It’s the issue itself,” said Senator Kelly Ayotte, Republican of New Hampshire, whose state is one of five with no sales taxes. ”What does surprise me, put aside the groups for a minute, is that there are people who describe themselves as conservatives who are going to support this act, when regardless of how you look at it, whether your state has a sales tax or not, it’s going to put some fairly rigorous and onerous requirements on online businesses to collect taxes for other states. That’s counter to conservative principles.”

The Internet sales tax is not the first battle such groups have lost, but it might be one of the clearest. In 2010, just before all of the Bush-era tax cuts were first set to expire, President Obama and Senate Republican negotiators reached agreement to extend all of the tax cuts for two years, except one.

The estate tax had actually expired. Rather than have it reborn at the relatively high top rate of Bill Clinton‘s era, negotiators allowed it to come back at a considerably lower rate. It was still a tax increase from zero, but not as big as it could have been. Mr. Norquist blessed it.

He took his argument even further this year when all those tax cuts expired again. This time, Mr. Obama insisted that tax rates rise considerably on upper-income families’ wages, estates, capital gains and dividends. Almost all Republicans saw that as a tax increase, and a big one, but Mr. Norquist—seeing that passage was inevitable—again declared that the deal did not violate his group’s no-new-taxes pledge since letting all the tax cuts expire would be worse.

This time, Mr. Norquist and other conservatives are not mincing words. Heritage Action predicted that the Internet bill would usher in ”tax audits from hell” for online retailers who could be subject to scrutiny from taxing authorities all over the country at year’s end.

The Heritage Foundation e-mailed to members its 10 reasons to oppose the bill, contending ”it will hobble the Internet economy,” erode ”state sovereignty,” force ”small businesses to become tax collectors for other states” and unleash ”all the nation’s tax collectors on small businesses.”

Mr. Blunt grimaced at such assertions and recalled an interview he did with a television reporter in St. Louis. After the cameras were turned off, the reporter told him of his wife’s friend and her bridal store—which for many customers has turned into a showroom to try out the wares before buying them online.

”They use the parking lot. They use the sidewalk. They benefit from police protection, and then the local merchant who pays for all of that doesn’t get the sale,” he said, suggesting that the groups’ angry opposition in Washington could prove to be something of a watershed with Republicans.

Mr. Scott said he was in no way ready to renounce his support of the taxpayer pledge, but on this one, he has made his choice: ”I’m a co-signer of the pledge. I’m a co-signer of the legislation. We have to collect the taxes that are due.”